Group 1 - The Chinese innovative pharmaceutical industry has developed global competitiveness over the past decade, with collaborations from overseas MNCs validating the R&D capabilities of domestic companies, indicating a positive long-term industry trend [1] - There is a significant supply-demand mismatch in the self-medication drug sector, with only 9% market share for oral drugs for psoriasis in 2023, while 75% of patients have a demand for transitioning to oral therapies; it is expected that the share of oral drugs will increase to 33% by 2034 [1] - New molecular entities (NME) such as Tyk2 inhibitors are noteworthy due to their superior efficacy and safety [1] Group 2 - The medical device sector is showing signs of a turning point due to improved anti-corruption measures, optimized centralized procurement policies, and the availability of funding for equipment purchases, presenting opportunities for high-growth segments and companies in distress [1] - The CXO industry is benefiting from the overseas interest rate reduction cycle and the recovery of domestic innovative drugs, establishing a trend of bottom recovery with impressive profit performance [1] Group 3 - The Guotai Healthcare ETF (159377) tracks the innovative pharmaceutical index (399275), which saw a daily fluctuation of 20%; this index selects listed companies involved in biomedicine, medical devices, and related services from the ChiNext market to reflect the overall performance of the healthcare industry [1] - The innovative pharmaceutical index covers areas such as innovative drug R&D, biotechnology, and medical device manufacturing, highlighting the high growth potential and innovation capability of the healthcare industry in China [1]

Group 1 - The Hong Kong stock market's pharmaceutical sector has seen significant investment interest this year, particularly in the innovative drug segment, with the Hong Kong Stock Connect Innovative Drug ETF (Southern, 159297) showing remarkable performance [1] - As of November 11, the scale of the Hong Kong Stock Connect Innovative Drug ETF (Southern, 159297) increased from 335 million to 1.355 billion, reflecting a growth rate exceeding 300%, indicating strong market recognition of the long-term value of the innovative drug sector [1] - The ETF closely tracks the National Index of Hong Kong Stock Connect Innovative Drugs, which includes leading companies like BeiGene, Innovent Biologics, and CanSino Biologics, enhancing its representation of the innovative drug industry [1] Group 2 - The innovative drug industry is crucial for advancing medical progress and improving human health, with companies categorized into two types: pure Biotech firms and BioPharma companies [2] - As of mid-2025, over 70% of Biotech companies are expected to achieve positive revenue growth, with approximately 66% surpassing 100 million in revenue, and nearly 15% exceeding 1 billion [2] - China's BioPharma sector is transitioning from single R&D to full industry chain integration, becoming a significant player in the global biopharmaceutical field, with a notable increase in overseas licensing amounts exceeding 92 billion in the first three quarters of 2025 [2] Group 3 - Looking ahead, the innovative drug sector is expected to maintain its momentum despite recent sentiment fluctuations, with ongoing business development (BD) activities supporting sustained industry vitality [3] - The trend of "innovation + internationalization" in the innovative drug industry remains unchanged, with improved fundamentals observed in the industry chain, including positive trends in financing data, orders, and performance [3]

Group 1 - The core viewpoint indicates that the innovative drug sector is experiencing fluctuations, with the Medical Innovation ETF (516820.SH) down by 1.05% in early trading on November 11. Some constituent stocks showed mixed performance, with Haikang (002653) leading gains at 0.84% and Kanglong Chemical (300759) leading losses at 2.36% [1] - The Medical Innovation ETF has seen continuous net inflows over the past six days, with a maximum single-day net inflow of 44.28 million yuan, totaling 74.16 million yuan, and an average daily net inflow of 12.36 million yuan [1] - The negotiation for the 2025 National Basic Medical Insurance Drug Catalog and the price negotiation for commercial insurance innovative drug catalog has been completed, with 120 domestic and foreign companies participating, including 127 off-catalog drugs in the basic medical insurance drug catalog negotiations and 24 drugs in the commercial insurance innovative drug catalog price negotiations [1] Group 2 - Recent developments in innovative drug business development (BD) have led to rapid advancement in overseas Phase III clinical trials, with a recovery in sentiment within the innovative drug sector. The industry trend remains unchanged, and after a short-term adjustment, the sector's elasticity has further increased [2] - There is a positive trend observed in investment and financing data, orders, and performance within the innovative drug industry chain, indicating a recovery in the sector [2] - The expectation of interest rate cuts in the U.S. is likely to enhance global liquidity and the trend of technology stocks, providing an opportunity for investors who missed the initial rally in the pharmaceutical sector to invest in core pharmaceutical assets through the Medical Innovation ETF (516820) [2]

（文章来源：每日经济新闻） 兴业证券表示，近期创新药板块情绪回落，随着BD持续落地，当前板块景气度可持续，"创新+国际 化"创新药产业趋势不变，短期调整后创新药板块弹性进一步提升。 科创创新药ETF国泰（589720）聚焦科创板创新药企业，跟踪汇聚30家代表性优质公司的上证科创板创 新药指数，以高成长biotech为主，产品20%涨跌幅限制使其更贴合板块波动。 近期，创新药延续回调态势，科创创新药ETF（589720）近两个月跌近15%。回调期间，资金逢低买 入，连续5日净流入额超2.6亿元，近10日净流入额超3.5亿元。 ...

Overall Situation - The pharmaceutical sector experienced a revenue decline of 2% and a net profit drop of 1% in the first three quarters of 2025, with a further decline in net profit of 3% in Q3 2025 [1][2] - The innovative drug segment showed strong revenue growth in Q3 2025, particularly in Bio-Pharma, CXO, and upstream sectors, while overall revenue growth has remained flat or slightly declining since Q1 2023 [1][3] Performance by Sub-Sectors - **Pharma**: Revenue decreased by 1% YoY in Q3 2025, with a significant drop in net profit by 13% [2] - **Bio-Tech**: Revenue surged by 61% YoY in Q3 2025, indicating strong performance despite a net profit decline of 32% [2] - **Bio-Pharma**: Revenue growth of 18% YoY in Q3 2025, with net profit increasing by 151% [2] - **CXO**: Revenue growth of 10% YoY in Q3 2025, with net profit up by 51% [2] - **Upstream**: Revenue increased by 13% YoY in Q3 2025, with net profit rising by 49% [2] - **Medical Devices**: Revenue grew by 11% YoY in Q3 2025, while net profit increased by 8% [2] - **IVD**: Revenue declined by 11% YoY in Q3 2025, with a net profit drop of 17% [2] - **High-value Consumables**: Revenue growth of 8% YoY in Q3 2025, with net profit up by 3% [2] - **Low-value Consumables**: Revenue decreased by 6% YoY in Q3 2025, with a net profit decline of 19% [2] Future Outlook - **Innovative Drugs**: Q3 2025 is expected to be the most challenging quarter for many Pharma companies, but upcoming clinical data releases and new drug approvals in 2026 are anticipated to drive revenue and profit growth [3] - **CXO**: The sector is expected to recover, with external demand for CDMO services improving and domestic CRO demand stabilizing [5] - **Upstream Research Services**: Revenue growth is expected to continue as industry demand accelerates [6][7] - **Medical Devices**: The sector is projected to see continued improvement in Q4 2025, with inventory levels returning to normal and potential growth in high-value products [8] Investment Insights - The focus is shifting back to the fundamentals of the innovative drug industry, with a need for tangible actions from multinational corporations (MNCs) to validate their partnerships [4] - Investment opportunities may arise from companies with strong collaborations with MNCs, as their clinical pipelines gain recognition and valuation [4] - A diversified index-based approach is recommended for participating in the pharmaceutical sector, with specific ETFs focusing on innovative drugs and medical devices [9][10]

Core Viewpoint - Wang Guobin, the general manager and founder of Quan Guo Fund Management Co., Ltd., has passed away, and the chairman, Ren Li, will take over his responsibilities [1][4]. Group 1: Company Overview - Quan Guo Fund was established in 2022, and as of November 3, 2025, it has a fund management scale of 23.787 billion yuan, with six funds under management and five fund managers [5]. - Wang Guobin held a 35% stake in Quan Guo Fund and was also a representative of the Shanghai Municipal People's Congress [1][4]. Group 2: Wang Guobin's Background - Wang Guobin previously worked at Dongfang Securities, where he served as the general manager of the securities investment business headquarters and vice president [3]. - In 2005, he founded Dongfang Hong Asset Management, which became the first broker-based asset management company in China to obtain a public fund license in 2010 [4]. Group 3: Industry Insights - Wang Guobin highlighted that China has become one of the fastest-growing economies in terms of innovation over the past decade, driven by the maturation of the post-80s and post-90s generations [4][5]. - He emphasized the advantages of China's large population and engineering talent, with nearly 20 million graduates annually, predominantly engineers, which supports potential innovation [5].

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical industry [7] Core Insights - The pharmaceutical sector has shown resilience with a 1.2% increase in the CITIC Pharmaceutical Index, outperforming the CSI 300 Index by 1.6 percentage points during the week of October 27-31, 2025 [3][54] - The overall revenue growth for the pharmaceutical sector in Q1-Q3 2025 was -2%, with a net profit decline of -1%. However, Q3 2025 showed signs of improvement with a 0% revenue growth and a -3% net profit growth compared to Q2 2025 [4][17] - The report highlights that the innovation drug sector and related industries are expected to continue their upward trajectory, driven by strong performance in Q3 and upcoming catalysts such as major conferences and policy changes [5][25] Summary by Sections 1. Weekly Market Review - The CITIC Pharmaceutical Index increased by 1.2% during the week, ranking 13th among CITIC's primary industry classifications [3][54] - The top-performing stocks included HeFu China (+49.0%), NuoSiGe (+36.7%), and SanSheng GuoJian (+33.1%) [70] 2. Q3 Performance Overview - The pharmaceutical sector's overall revenue growth for Q3 2025 was 0%, with the highest revenue growth seen in Bio-Tech, Bio-Pharma, and home-use devices [4][17] - The net profit growth for Q3 was -3%, with Bio-Pharma, CXO, and upstream sectors showing the best performance [4][17] 3. Investment Recommendations - The report suggests focusing on high-quality innovative drug leaders and the CXO sector, which have shown strong performance and are expected to continue to do so [5][25] - Recommended stocks for the upcoming month include SanSheng Pharmaceutical, Xinda Biologics, and Kangfang Biologics [5][25] 4. Subsector Analysis - **Bio-Pharma/Biotech**: Significant growth in Q3 with multiple innovative drugs approved, expected to continue in Q4 and 2026 [25] - **Pharma**: Facing challenges but potential for recovery with upcoming policy changes [26] - **CXO**: Strong performance with a 10% revenue increase and 51% net profit growth in Q3, expected to benefit from macroeconomic improvements [31] - **Upstream**: Revenue of 4.4 billion yuan in Q3, showing a 13.1% year-on-year growth, with positive outlook for Q4 and 2026 [30]

Market Overview - The market experienced a decline on October 31, 2025, with all three major indices closing lower: Shanghai Composite Index down 0.81%, Shenzhen Component Index down 1.14%, and ChiNext Index down 2.31% [1] Sector Performance - Biopharmaceuticals, chemical pharmaceuticals, and cultural media sectors showed the highest gains, while insurance, small metals, and semiconductors faced the largest declines [1] ETF Performance - Innovation drugs, film and television, and software-related ETFs performed well, likely driven by relevant news [2] Biopharmaceutical Sector - The National Medical Insurance negotiation began on October 30, 2025, introducing a "commercial insurance innovative drug catalog" mechanism, which includes innovative drugs with high clinical value that are not yet part of the basic medical insurance catalog [2] - According to Industrial Securities, the ongoing business development (BD) in the innovative drug sector is expected to sustain the current industry prosperity, with a focus on "innovation + internationalization" [2] Cultural Industry - Cultural enterprises reported a net profit of 909.3 billion yuan in the first three quarters, a year-on-year increase of 14.2%, with an operating income profit margin of 8.30% [2] - The cultural industry is experiencing a transformation driven by AI-generated content (AIGC), which is expected to create new opportunities in the industry [3] Software Industry - The software and information technology service industry in China saw a revenue of 1,111.26 billion yuan in the first three quarters, reflecting a year-on-year growth of 13.0% [4] - Longjiang Securities highlighted the importance of achieving complete autonomy in key areas, particularly in the domestic operating system and chip industries, as a response to global technological competition [4]

Group 1 - The 2025 National Medical Insurance negotiation has officially introduced the "Commercial Insurance Innovative Drug Directory" mechanism, which aims to include innovative drugs that are not yet part of the basic medical insurance directory but have high clinical value and significant patient benefits [2] - A total of 535 drug generic names have passed the formal review for the basic drug directory, while 121 drug generic names have passed for the commercial insurance innovative drug directory, with 79 of them applying for both directories [2] - The introduction of the commercial insurance innovative drug directory is expected to open up broader market opportunities for innovative drugs in the context of a growing number of "global new" drugs emerging in China [2] Group 2 - The innovative drug industry is currently benefiting from three core positive factors: performance realization, policy support, and improved market environment [3][4] - The performance realization is driven by high-demand business development (BD) transactions, as domestic innovative drug companies have accumulated a wealth of quality patents since 2016, which can effectively complement the needs of large pharmaceutical companies facing patent expirations [3] - Continuous policy support includes the inclusion of 37 high-priced innovative drugs in commercial insurance to supplement the Class C directory of medical insurance, and the optimization of priority review and approval processes, which shortens clinical review to 30 working days [3] Group 3 - The market environment has improved since mid-June 2025, with the A-share market entering a "slow bull" phase, enhancing overall risk appetite and providing strong support for the innovative drug sector [4] - The innovative drug industry is expected to see significant growth opportunities driven by continuous breakthroughs in international markets, ongoing policy benefits, and the steady improvement of R&D capabilities among Chinese innovative drug companies [5] - The Science and Technology Innovation Drug ETF (589720) has outperformed the Hang Seng Hong Kong Stock Connect Innovative Drug Index since the "924 market" began, indicating strong investment potential in this sector [6]

Core Viewpoint - The innovative drug industry trend remains unchanged, with sufficient adjustments made currently, and it is expected that innovative drugs will rise again after the third quarter reports [1] Group 1: Industry Trends - The CXO sector is performing well, benefiting from potential performance catalysts and high prosperity, with the overseas CXO industry entering a phase of accelerated recovery [1] - There is a clear recovery trend in macro-level BD transactions and mergers and acquisitions, while micro-level new molecular businesses maintain high prosperity [1] - The medical device sector is experiencing a policy turning point, with stock prices, valuations, and allocations at the bottom, and the fundamentals are expected to improve [1] Group 2: Investment Recommendations - It is recommended to focus on innovative drugs, the innovative drug industry chain (export-oriented CXO), and medical devices as the main lines for medium to long-term investment [1] Group 3: ETF Performance - The Guotai Innovation Drug ETF (589720) focuses on innovative drug companies on the Sci-Tech Innovation Board, tracking 30 representative quality companies in the Shanghai Stock Exchange Sci-Tech Innovation Drug Index, primarily featuring high-growth biotech [1] - Since the "924 market" last year, the Sci-Tech Innovation Drug Index has outperformed the Hang Seng Hong Kong Stock Connect Innovative Drug Index, with respective gains of 117.04% and 109.62% during the market rebound period from September 24, 2024, to September 30, 2025 [1] - The Sci-Tech Innovation Drug Index may help better share the elasticity of the Sci-Tech Innovation Board when market risk appetite rebounds [1]