Report Summary 1. Report Industry Investment Rating No industry investment rating information is provided in the report. 2. Core Viewpoints - A shares are likely to maintain high - level fluctuations, and the bond market and gold will experience short - term volatility. The report suggests paying attention to investment opportunities in directions such as computing power, chips, artificial intelligence, batteries, rare earths, and innovative drugs [13]. - The high risk preference is unfavorable to the bond market, but the high absolute yield makes it have long - term allocation value. The gold price may fluctuate in the short term, but the long - term upward trend remains unchanged [14]. 3. Summary According to Related Content Stock Market - **US Stocks and Hong Kong Stocks**: In the past week (20251027 - 20251102), the Nasdaq, S&P 500, and Dow Jones Industrial Average rose by 2.24%, 0.71%, and 0.75% respectively, while the Nasdaq China Technology Index fell by 1.00%. The Hang Seng Index fell by 0.97% [3]. - **A Shares**: The wind all - A index rose by 0.41%. Among them, the CSI A100 and CSI 300 fell by 0.51% and 0.43% respectively, while the CSI 500, CSI 1000, CSI 2000, and wind micro - cap stocks rose by 1.00%, 1.18%, 0.95%, and 0.34% respectively. In terms of sectors, the Shanghai blue - chip and growth sectors fell, the Shenzhen blue - chip sector fell while the growth sector rose, and the North Securities 50 index rose by 7.52%. Among the 30 CITIC industries, 21 industries rose, with the leading industries being basic chemicals, electric power and new energy, and comprehensive finance, with a weekly increase of more than 3.0%. Semiconductor, battery, photovoltaic, and other ETFs led the gains, with a weekly increase of more than 5% [4]. Bond Market - **Domestic Bonds**: In the past week, the price of treasury bond futures rose, and the yields of treasury bonds of all maturities decreased. The 10 - year treasury bond futures contract rose by 0.62%, and the yield of the 10 - year active treasury bond decreased by 5.32 BP to 1.7954%. The central bank's open - market operations had a net investment of 12008 billion yuan. The bond market leverage level decreased, and the 5 - day average of inter - bank pledged repurchase volume decreased from 7.83 trillion yuan on October 24, 2025, to 6.71 trillion yuan on October 31, 2025 [5][7]. - **US Bonds**: In the past week, US bond yields increased, and the yield curve shifted upward as a whole. As of October 31, 2025, the 10 - year US bond yield increased by 9 BP to 4.11% [8]. Foreign Exchange Market - The US dollar appreciated, and the US dollar index rose by 0.80%. The US dollar appreciated against the euro, pound, and yen. The US dollar exchange rate against the offshore and onshore RMB slightly decreased [9]. Gold Market - Gold prices continued to fall. The London spot gold price fell by 2.26% to $4011.50 per ounce, and the COMEX gold futures price fell by 3.08% to $3995.70 per ounce. The domestic gold price also continued to fall, with the Shanghai spot gold falling by 1.51% to 921.50 yuan per gram and the futures falling by 1.65% to 920.48 yuan per gram [10]. Policy and Event Impact - The central bank's resumption of treasury bond trading does not necessarily mean an increase in liquidity injection. It is only a liquidity management tool, and only an increase in net treasury bond purchases represents an increase in liquidity injection [11]. - The meeting between Chinese and US leaders in South Korea eased the economic and trade relations between the two countries, which is conducive to improving investors' risk preference [12].

Core Insights - The Chinese stock market is experiencing a divergence, with the innovative drug sector showing strong performance following significant meetings and US-China tariff negotiations [1] - The Hong Kong innovative drug ETF (513120) has seen a year-to-date increase of 91.72%, focusing on high-quality biotech companies in the innovative drug, gene therapy, and cutting-edge biotechnology sectors [3] Group 1: Policy and Market Developments - The annual pharmaceutical procurement has sparked renewed interest in the pharmaceutical and biotech sectors, with negotiations for the 2025 National Drug Directory adjustments taking place from October 30 to November 2 [4] - This adjustment marks the eighth since the establishment of the National Medical Insurance Administration, introducing a commercial health insurance innovative drug directory, which represents a shift from a single basic insurance model to a collaborative payment model involving both insurance types [5] - A total of 535 drugs passed the formal review, with 310 generic names seeing a 24.5% increase compared to 2024, indicating a record high for submissions [4][5] Group 2: Financial Implications for Companies - The commercial insurance innovative drug directory allows pharmaceutical companies to apply for both basic insurance and commercial insurance, potentially opening up significant revenue streams for high-value innovative drugs [5][6] - For instance, the drug Masitide from Innovent Biologics, which is a high-priced prescription drug not included in basic insurance, could generate tens of billions in revenue if included in the commercial insurance directory [6] - The projected payment scale for commercial insurance for innovative drugs is expected to rise from 12.4 billion yuan in 2024 to 440 billion yuan by 2035, a 35-fold increase [6] Group 3: Company Performance and Market Sentiment - The innovative drug sector has seen a surge in business development (BD) collaborations, with over $100 billion in total licensing agreements in the first ten months of 2025, surpassing the total for 2024 [12][15] - Notable collaborations include a $12 billion upfront payment deal between Innovent Biologics and Takeda, and a $16.4 billion deal between Prigen and Kite Pharma [15] - Recent quarterly reports from companies like Innovent Biologics and Kelun Biotech show strong revenue growth, with Innovent reporting over 3.3 billion yuan in Q3 2025, a 40% year-on-year increase [16][17] Group 4: Investment Trends - The innovative drug ETF (513120) has attracted over 10 billion yuan in net inflows in the last ten days, with a total of 92.18 billion yuan year-to-date, indicating strong institutional interest [18] - The ETF's focus on high-quality biotech companies, with a weight of 88.9% in innovative drugs and chemical pharmaceuticals, positions it as a leading investment vehicle in the sector [23][24] - The market sentiment remains optimistic, with funds re-entering the sector during price corrections, reflecting confidence in the industry's future growth potential [19][20]

Group 1 - The overall outlook for the Hong Kong stock market remains cautious but optimistic, with a focus on sectors benefiting from policy support such as new energy, innovative pharmaceuticals, and AI technology [3][6] - The market experienced significant fluctuations in October, with the Hang Seng Index reaching a peak on October 2 before declining due to concerns over US-China trade tensions, ultimately closing below 26,000 points [4][13] - The macroeconomic environment shows a weakening fundamental backdrop, with domestic economic data indicating a continued bottoming phase, while policy focus is on technological innovation and expanding domestic demand [5][31] Group 2 - In October, the valuation levels of the Hong Kong stock market decreased, with the Hang Seng Index's PE ratio dropping from 13.18 to 12.76, indicating a market valuation above the five-year average [19][20] - Southbound capital inflows showed a significant decrease in October, with net purchases amounting to 92.5 billion HKD, although the overall trend remains positive, providing liquidity support to the market [25][30] - The performance of various sectors in October was mixed, with defensive sectors like energy and utilities rebounding while previously strong sectors like technology and pharmaceuticals faced corrections [14][19] Group 3 - The domestic economic outlook is closely tied to the performance of the Hong Kong stock market, with the majority of earnings coming from Chinese companies, highlighting the importance of monitoring China's economic indicators [31] - Key economic data for September showed a GDP growth of 4.8%, with retail sales growth slowing to 3.0%, indicating weakening consumer demand [32][33] - Investment in fixed assets continued to decline, with a year-on-year drop of 7.1% in September, primarily driven by a significant decrease in real estate investment [36][44] Group 4 - The "14th Five-Year Plan" emphasizes technological innovation and industrial upgrading, aiming to enhance domestic demand and improve the consumption environment [64] - The Federal Reserve's recent interest rate cut and cautious stance on future rate adjustments are critical factors influencing the Hong Kong market, as external economic conditions remain uncertain [65][66] - The overall economic environment in the US shows moderate expansion, but uncertainties persist, particularly regarding inflation and employment data, which could impact market sentiment [67][68]

Investment Rating - The investment rating for the pharmaceutical and biotechnology industry is "Positive" and the rating has been maintained [1] Core Views - The investment logic in the pharmaceutical sector is shifting from policy pressure to innovation-driven growth, with the "14th Five-Year Plan" directly supporting the development of innovative drugs and medical devices [8][26] - The industry is witnessing a transition from rapid following to original innovation, as demonstrated by Chinese companies showcasing their global competitiveness and pipeline value at the 2025 ESMO conference [8][26] - The recent approval of innovative drugs and the successful listing of companies on the STAR Market indicate a supportive capital market for innovative pharmaceutical enterprises [8][26] Industry Review - The pharmaceutical and biotechnology industry index increased by 1.89%, ranking 20th among 31 primary industries, underperforming the CSI 300 index which rose by 2.80% [5][16] - The sub-industries of medical research outsourcing and vaccines showed the highest gains, with increases of 5.26% and 4.19% respectively, while medical devices and traditional Chinese medicine experienced declines of 1.21% and 0.56% [5][16] - As of October 31, 2025, the industry’s PE (TTM, excluding negative values) was 30.67x, up from 30.08x in the previous period, indicating an upward valuation trend but still below the average [21] Company Dynamics - A total of 36 listed companies in the pharmaceutical and biotechnology sector experienced a net reduction in shareholder holdings amounting to 805 million yuan, with 4 companies increasing holdings by 120 million yuan and 32 companies reducing holdings by 925 million yuan [5][6] - Among the 501 tracked companies, 499 have disclosed their performance for the first three quarters of 2025, with 53 companies reporting a net profit growth of 100% or more, and 69 companies reporting growth between 30% and 100% [6] Investment Recommendations - Focus on companies with strong positions in innovative drugs and cutting-edge technology platforms, particularly those involved in ADC, bispecific/multispecific antibodies, and cell therapy, which can provide high potential for international market expansion [8] - Pay attention to the CXO industry, which is expected to see increased demand due to the recovery of innovative drug development and commercialization, especially for leading companies with strong service capabilities in new technology areas [8]

Market Overview - A total of 66 stocks hit the daily limit up, while 21 stocks faced limit down, resulting in a sealing rate of 76% [1] - The market showed signs of recovery with all three major indices closing in the green; Shanghai Composite Index rose by 0.55%, Shenzhen Component Index by 0.19%, and ChiNext Index by 0.29% [1] - The total trading volume in the Shanghai and Shenzhen markets was 2.11 trillion, a decrease of 210.7 billion from the previous trading day [1] Stock Performance - The only stock to achieve more than two consecutive limit ups was HeFu China, which reached a five-day limit up streak [3] - Pingtan Development achieved nine limit ups in 12 days, while Yingxin Development had eight limit ups in 11 days [1][12] - The sectors with the highest gains included Hainan, gaming, and film and television, while battery, non-ferrous metals, and rare earth permanent magnet sectors faced declines [1] Hot Sectors - The short drama concept continued to gain momentum, with companies like Yue Media and Huanrui Century achieving consecutive limit ups [5] - The gaming sector rebounded strongly, driven by better-than-expected Q3 reports and regulatory penalties for information disclosure violations [5] - The thorium-based molten salt nuclear power concept saw strong performance, with several stocks hitting limit up due to successful fuel conversion tests [6] Supply Chain Developments - Major memory chip manufacturers, including Samsung and SK Hynix, announced a pause in DDR5 DRAM contract pricing, leading to a significant rise in SK Hynix's stock [7] - The storage chip sector showed signs of recovery, with stocks like PuRan and XiangNong Chip reaching new highs [7] Innovation in Pharmaceuticals - A new "direct deamination" synthesis technology was published by a team from the University of Science and Technology of China, which could significantly reduce the cost of producing pharmaceutical intermediates [8] - This innovation has positively impacted the chemical sector, with stocks like MeiRui New Materials and BaiHeHua achieving limit ups [8] Future Market Outlook - The market is expected to continue its recovery trend, with a focus on low-priced stocks and new themes emerging [9] - The ability of the three major indices to reach new highs will depend on their ability to break through the short-term resistance levels [9]

Core Viewpoint - The passing of Wang Guobin, founder of Quanguo Fund and a prominent figure in value investing in China, is a significant loss for both the fund and the investment community [1][11]. Group 1: Wang Guobin's Contributions and Legacy - Wang Guobin had 31 years of experience in the securities industry and was a pioneer of the value investing philosophy in China, recognized as one of the most successful value investors in the A-share market [6][16]. - He founded Quanguo Fund in 2022, aiming to restart the public offering business and published his first book, "Investing in China" [6][18]. - Quanguo Fund's mission is to maximize long-term value for investors, continuing Wang's legacy of loyalty and trust in asset management [1][19]. Group 2: Industry Reactions and Tributes - The news of Wang Guobin's death prompted widespread mourning in the investment community, with many industry leaders expressing their shock and sorrow [1][12][13]. - Tributes highlighted his wisdom, energy, and the significant impact he had on the industry, with colleagues recalling his mentorship and insights [13][14][15]. Group 3: Quanguo Fund's Structure and Vision - Quanguo Fund was established with a registered capital of 100 million yuan, featuring a clear equity structure with major shareholders including Wang Guobin and Ren Li, each holding 35% of the shares [18]. - The fund implemented employee stock ownership plans to enhance long-term commitment among its staff, with nearly 20% of shares allocated to these plans [18]. Group 4: Investment Philosophy - Wang Guobin emphasized the importance of value investing, particularly during market volatility, advocating for a focus on objective realities and enduring wisdom [19][20]. - His investment approach combined value and growth investing principles, focusing on companies with clear business models, strong governance, and competitive advantages [20].

Core Insights - The Hong Kong stock market saw a net inflow of 54.72 billion HKD from northbound trading on November 3, with 13.04 billion HKD from the Shanghai Stock Connect and 41.68 billion HKD from the Shenzhen Stock Connect [1] Group 1: Stock Performance - The most net bought stocks included Xiaomi Group-W (01810), CNOOC (00883), and China Mobile (00941) [1] - The most net sold stocks were SMIC (00981), Alibaba-W (09988), and Hua Hong Semiconductor (01347) [1] Group 2: Individual Stock Analysis - Xiaomi Group-W (01810) received a net inflow of 10.29 billion HKD, with Citigroup estimating that its electric vehicle deliveries exceeded 40,000 units in October, bringing the year-to-date total to over 308,000 units, achieving 88% of its 2025 target of 350,000 units [5] - CNOOC (00883) saw a net inflow of 9.93 billion HKD, with OPEC+ announcing a production increase of 137,000 barrels per day in December, while also planning to pause production increases from January to March next year [5] - Kangfang Biopharma (09926) had a net inflow of 3.72 billion HKD, as its dual-specific antibody drug was included in the breakthrough therapy designation list, accelerating its clinical development [6] - Three-Sixty Biopharma (01530) received a net inflow of 3.25 billion HKD, with Pfizer starting two global Phase III clinical trials for its dual-specific antibody [6] - Innovent Biologics (01801) had a net inflow of 2.96 billion HKD, reporting a 40% year-on-year increase in total product revenue for Q3 2025 and forming a global strategic partnership with Takeda Pharmaceutical [7] Group 3: Market Trends - There is a continued reduction in holdings of semiconductor stocks, with SMIC (00981) and Hua Hong Semiconductor (01347) experiencing net outflows of 1.38 billion HKD and 628 million HKD, respectively [7] - China Mobile (00941) and Pop Mart (09922) received net inflows of 461 million HKD and 52.96 million HKD, respectively, while Tencent (00700) and Alibaba-W (09988) faced net outflows of 151 million HKD and 955 million HKD [7]

Group 1: Core Insights - The third quarter report of public funds highlights a significant performance divergence, with high-growth sectors continuing to be the main profit drivers for many funds, while traditional value sectors lag behind [1][6][10] - Major funds like Ruiyuan Growth Value and Galaxy Innovation Growth saw net value increases exceeding 50% in Q3, focusing on high-growth areas such as artificial intelligence, semiconductors, and optical modules [1][3][4] - Traditional value fund managers are facing challenges, with sectors like consumer goods and dividends showing weak performance, leading to a cautious outlook on these investments [1][7][10] Group 2: Fund Performance and Strategies - Ruiyuan Growth Value, with over 20 billion yuan in assets, reported a net value increase of over 50% in Q3, heavily investing in internet technology and high-growth sectors [3] - Xingquan Helun, with nearly 25 billion yuan, achieved a net value increase of 36.16%, focusing on optical modules and PCB, while maintaining a high position in the market [3] - The China Medical Health fund, with over 32 billion yuan, saw a net value increase of over 20%, driven by optimism in innovative drugs and medical devices [4] Group 3: Challenges in Value Investing - The consumer sector, particularly food and beverage, showed minimal growth, with the industry index rising only 2.44% in Q3, leading to underperformance for consumer-focused funds [7][8] - Fund managers like Xiao Nan and Liu Yan Chun, who focus on traditional sectors, reported modest gains, with Xiao Nan's fund increasing by 8.83% and Liu's by 9.09% in Q3 [8][9] - Concerns about the sustainability of growth in traditional sectors persist, with managers emphasizing the need for a recovery in domestic consumption to improve performance [10][11] Group 4: Market Dynamics and Future Outlook - The market's structural changes have made it increasingly difficult for fund managers to achieve stable excess returns, particularly in a concentrated market environment [12][14] - Some fund managers express caution regarding the rapid market gains, indicating a need for a more prudent investment approach amidst high valuations in popular sectors like AI [13][14] - The AI sector, while presenting significant opportunities, also carries risks due to high valuations and the potential for increased volatility in response to market sentiment and macroeconomic factors [14]

Core Viewpoint - Junshi Biosciences is positioned as a comprehensive innovative pharmaceutical company with capabilities spanning drug discovery, clinical research, large-scale production, and commercialization, aiming for a global footprint while being rooted in China [2] Group 1: Company Overview - Junshi Biosciences was established on December 27, 2012, and went public on July 15, 2020, focusing on the research and commercialization of monoclonal antibody drugs and other therapeutic proteins [7] - The company's main revenue sources include drug sales (90.67%), technology licensing and royalties (8.74%), and technical services (0.59%) [7] - As of September 30, 2025, Junshi Biosciences reported a revenue of 1.806 billion yuan, a year-on-year increase of 42.06%, while the net profit attributable to shareholders was -596 million yuan, reflecting a year-on-year growth of 35.72% [8] Group 2: Product Development and Pipeline - The company has developed a robust product pipeline, including its core product, Toripalimab, which is the first domestically approved PD-1 monoclonal antibody in China, with 11 approved indications and one supplemental NDA under review [2] - Toripalimab is also the first innovative biologic drug developed and produced in China to receive FDA approval, with approvals in multiple regions including the EU, the UK, and Australia [2] - Junshi Biosciences is advancing its self-developed Tifcemalimab, the first anti-BTLA monoclonal antibody to enter clinical development, with two Phase III registration trials ongoing [2] Group 3: Collaborations and Future Prospects - The company is collaborating with institutions such as Peking University and the Chinese Academy of Sciences to develop vaccines, including a monkeypox vaccine, which is currently in preclinical development [3] - Junshi Biosciences aims to explore early-stage pipelines, with multiple products expected to initiate critical registration clinical trials by 2025 [2]

Core Viewpoint - The popularity of innovative drugs is rapidly recovering, as evidenced by the significant trading volume and performance of the Hong Kong Stock Connect Innovative Drug ETF (520880) [1][3]. Group 1: Market Performance - On November 3, the trading volume of the Hong Kong Stock Connect Innovative Drug ETF (520880) exceeded 800 million yuan, surpassing the previous day's total and reaching a new high since September 12 [1]. - The ETF covers 37 innovative drug companies, with over 30 stocks showing gains, including leading performers such as Sihuan Pharmaceutical, CanSino Biologics, and Innovent Biologics [1]. - The ETF has attracted over 456 million yuan in October alone, indicating strong investor interest [1]. Group 2: Industry Developments - The innovative drug sector has seen positive developments, with 35 research projects selected for oral presentations at the ESMO 2025 conference, setting a new record [3]. - Significant collaborations, such as the 11.4 billion USD partnership between Innovent Biologics and Takeda, highlight the global market's recognition of the value of Chinese innovative drugs [3]. - The upcoming conclusion of the national medical insurance negotiations is expected to yield results in December, with the introduction of a "commercial insurance innovative drug directory" mechanism [3]. Group 3: ETF Characteristics - The Hong Kong Stock Connect Innovative Drug ETF (520880) passively tracks the Hang Seng Hong Kong Stock Connect Innovative Drug Select Index, which exclusively includes innovative drug companies and has a significant focus on large-cap leaders [3][4]. - The top ten holdings of the ETF account for 71.63% of its weight, showcasing a strong concentration in leading companies [4]. - As of the end of September, the ETF has achieved a year-to-date increase of 108.14%, outperforming other innovative drug indices [4][5].