Macro Highlights - The Central Urban Work Conference held in Beijing from July 14 to 15 emphasized that urbanization in China is transitioning from rapid growth to stable development, focusing on urban renewal as a key task for the current and future periods [1] Economic Data - The National Bureau of Statistics reported that China's GDP for the first half of the year reached 66,053.6 billion yuan, with a year-on-year growth of 5.3%. The primary industry increased by 3.7%, the secondary industry by 5.3%, and the tertiary industry by 5.5% [2] - In June, the sales prices of commercial residential properties in 70 large and medium-sized cities continued to decline, with first-tier cities seeing a month-on-month decrease of 0.3% for new homes and 0.7% for second-hand homes [2] Financial Regulations - The National Financial Supervision Administration released interim measures for the supervision of local asset management companies, limiting their financing balance with a single client to 10% of their net assets and 15% for a single group client [3] Industry Developments - The Ministry of Industry and Information Technology is soliciting opinions on the draft of mandatory national standards for mobile power supplies, which will impose stricter technical standards on products including power banks [4] - The Ministry of Commerce and the Ministry of Science and Technology adjusted the "Directory of Technologies Prohibited from Exporting and Restricted from Exporting," adding battery cathode material preparation technology to the restricted category [5] - The China Chain Store and Franchise Association issued a proposal to regulate the instant retail market, urging members to avoid price subsidy wars that disrupt market order and threaten sustainable development [6] Price Adjustments - Starting from July 15, domestic gasoline and diesel prices were reduced by 130 yuan/ton and 125 yuan/ton, respectively, translating to a decrease of 0.10 yuan per liter for 92-octane gasoline [7] Company News - Nvidia announced that the U.S. government has assured it will grant licenses, allowing the company to resume H20 chip deliveries [9] - Zhongji Xuchuang expects a net profit of 3.6 billion to 4.4 billion yuan for the first half of 2025, representing a year-on-year increase of 52.64% to 86.57% [9] - *ST Yazhen's stock was suspended due to a significant price deviation, with a resumption expected within three trading days [9] - Bertley and Jinding Private Equity established a partnership to invest in high-growth sectors including humanoid robots and smart transportation [9] - Sinochem International is planning an asset restructuring involving the acquisition of a subsidiary, with stock suspension expected for up to 10 trading days [10] - Siwei Technology anticipates improved gross margins in Q2 as product validation progresses [10] - Several companies, including Sitwei-W and Jinli Yongci, reported significant expected increases in revenue and net profit for the first half of 2025, with growth rates ranging from 47% to over 350% [11]

国家"团购"药品，关系着每一名患者的用药清单。 国家组织药品联合采购办公室7月15日公布了第十一批集采品种遴选情况，初步确定将对55种药品进行采购，涉及治疗领域主要包括抗感染、抗肿 瘤、抗过敏哮喘、糖尿病用药、心血管用药、神经系统药物等。 "新药不集采、集采非新药。"国家医保局有关司负责人介绍，7年来，国家层面已经开展10批药品集采，覆盖435种药品，第十一批集采将继续聚 焦上市多年、临床使用成熟的"老药"，更加关注群众多层次、多元化用药需求。 河北省柏乡县龙华镇卫生院药房工作人员在为患者取药。新华社记者 牟宇 摄 ——优化遴选条件，55种药品入选。 通过一致性评价的仿制药是集采"大户"，而满足"7家及以上"竞争格局则是集采遴选的第一个"门槛"，即参比制剂企业和通过一致性评价的仿制药 企业数量合计达到7家及以上。 "我们进行数据对比后，截至今年3月31日，共有122种药品满足初选条件。"国家组织药品联合采购办公室主任郑颐说。 这只是第十一批集采药品清单的"粗筛"，这些药品还需要满足医保和自费分组后达到"7家及以上"竞争格局、2024年采购金额大于1亿元等"细 筛"条件，并征求相关部门、临床医学和药学专家意见， ...

Core Viewpoint - The National Organization for Drug Procurement has announced the selection criteria for the 11th batch of centralized procurement, emphasizing the exclusion of new drugs from the procurement process and setting a procurement threshold of 100 million yuan, aiming to enhance market scale and ensure drug quality and safety [1][2]. Group 1: Selection Criteria and Process - The selection for the 11th batch of centralized procurement includes 122 varieties, with 55 ultimately included after a three-stage screening process that considers the medical insurance directory and market scale [1][2]. - New drugs under negotiation with the medical insurance directory will not be included in the procurement, protecting industry innovation [2]. - The procurement scope has been expanded to include varieties with annual procurement amounts exceeding 100 million yuan from provincial platforms, enhancing the scale effect [2]. Group 2: Quality Assessment and Regulation - The threshold for bidding qualifications has been raised, requiring companies to demonstrate quality control capabilities to mitigate quality risks [3]. - Regulatory oversight will be strengthened, with comprehensive checks on selected enterprises and product sampling to ensure compliance with quality standards [3]. - Real-world efficacy assessments will be expanded, supporting high-level hospitals in conducting clinical efficacy studies of selected drugs [3]. Group 3: Reporting and Volume Rules - Medical institutions can report quantities based on specific brands, aligning their needs with the procurement results for smoother clinical transitions [4]. - Institutions are required to report a total quantity not less than 80% of actual usage, with allowances for adjustments based on clinical demand fluctuations [4]. - The agreed procurement volume will be set between 60% and 80% of reported quantities, with special considerations for certain high-risk drugs [4]. Group 4: Bidding Rules and Competition - Bidding rules have been optimized to prevent excessive internal competition, with adjustments to how price differences are calculated [5]. - A "low-price declaration" will be required from the lowest bidding company to justify their pricing and ensure it is not below cost [5]. - Measures to prevent collusion in bidding processes will be introduced, including leniency for companies that report collusion [5].

Group 1: Product Overview - The company produces over 50 types of medicines, with more than 100 specifications, of which over 30 are pediatric drugs, covering the highest proportion of respiratory, digestive, anti-allergy, antibiotic, and nutritional supplements for children [1] - Pediatric drugs account for approximately 70% of the company's product mix, while adult drugs, including gynecological products, make up about 30% [1] Group 2: Market Potential - China's medical expenditure is expected to grow significantly, driven by increasing health awareness and a large base of approximately 250 million children aged 0-14, despite a declining birth rate [2] - The demand for pediatric medicines is stable, supported by parents' increasing focus on children's health, with certain segments like ADHD showing rising demand [2] Group 3: R&D Focus - The company has over 30 years of experience in pediatric drug R&D, continuously innovating in taste, dosage forms, and packaging to enhance competitiveness [2] - Future R&D will focus on pediatric medications, emphasizing dosage form innovation and expanding the pediatric population for existing drugs [4][5] Group 4: Sales Strategy - The company plans to enhance its sales channels, including increasing online sales and participating in national medical insurance negotiations [6] - The company is exploring acquisition opportunities primarily in the children's health sector, focusing on technology complementarity and channel synergy [7]

Group 1 - The company expects a net profit to be negative for the period from January 1, 2025, to June 30, 2025 [1] - The main reason for the expected loss is the intensified market competition due to the ongoing drug procurement policy, leading to a decrease in drug sales prices and a decline in market demand for certain products [1] - The company's operating revenue and gross margin are expected to decrease compared to the same period last year, contributing to the anticipated operating loss [1] Group 2 - The data related to the performance forecast is based on preliminary calculations by the company's finance department and has not been audited by the accounting firm [1] - The company had reported negative total profit, net profit, and net profit after deducting non-recurring gains and losses for the year 2024, with operating revenue below 300 million [2] - The company's stock was subject to delisting risk warning due to the negative financial results, and if certain conditions are met, the stock may face termination of listing [2]

Core Viewpoint - The recent price adjustment announcement by the Zhejiang Provincial Medical Insurance Bureau has put the phosphoric acid oseltamivir capsules produced by several pharmaceutical companies, including Dongyangguang Pharmaceutical, under scrutiny, impacting the company's path to a Hong Kong listing [2][3]. Company Overview - Dongyangguang Pharmaceutical's core product, "Kewai" phosphoric acid oseltamivir, once held a 90% market share in China but is now facing significant challenges due to intensified market competition and price complaints [3][4]. - The company reported a 10% decline in its domestic market revenue share for phosphoric acid oseltamivir in 2024, with profits plummeting by 97.6% year-on-year [3][9]. Financial Performance - The revenue from "Kewai" phosphoric acid oseltamivir accounted for 81.2%, 86.9%, and 64.2% of Dongyangguang's total revenue from 2022 to 2024, indicating a heavy reliance on this single product [9][12]. - The company's financial results showed operating profits of -7.93 billion RMB in 2022, 17.66 billion RMB in 2023, and 3.81 billion RMB in 2024, with net profits of -14.16 billion RMB, 10.14 billion RMB, and 2.48 million RMB respectively [9][10]. Market Dynamics - The overall market for antiviral drugs in China is projected to reach 6.7 billion RMB in 2024, with over 120 companies producing flu medications, leading to increased competition for Dongyangguang [7][8]. - The introduction of new antiviral drugs, such as Marbalozav, has further eroded the market share of Dongyangguang's oseltamivir, which is now at 54.8%, down from 64.8% in 2023 [7][8]. Strategic Initiatives - In response to the challenges, Dongyangguang is pursuing diversification in its product offerings, focusing on innovative drug development across various therapeutic areas, including diabetes and oncology [12][13]. - The company aims to consolidate its sales channels through a merger with its subsidiary, Dongyangguang Changjiang Pharmaceutical, to enhance its market position and operational efficiency [13][14].

Market Overview - Hong Kong stocks faced downward pressure with all three major indices falling over 1%, closing with the Hang Seng Index down 1.12% at 23,710.69 points and a total trading volume of HKD 181.93 billion [1] - Huatai Securities noted that despite rising interest in Chinese assets and a favorable environment for Hong Kong stock expansion, the market's significant decline presents relatively controllable risks, emphasizing the importance of sector rotation [1] - Guotai Junan International suggested that high-quality dividend sectors remain a stabilizing force in investment portfolios in the short term, while technological innovation is seen as a new driving force for economic growth and stock market increases in the medium to long term [1] Blue Chip Performance - Li Auto (02015) led the blue-chip decline, falling 4.14% to HKD 104.1, with a trading volume of HKD 1.561 billion, impacting the Hang Seng Index by 9.84 points [2] - Meituan's CEO Wang Xing reduced his stake in Li Auto, selling 5.737 million shares for over HKD 600 million, decreasing his holding from 20.94% to 20.61% [2] - Other notable blue-chip movements included China Hongqiao (01378) rising 3.39% and contributing 2.44 points to the index, while Alibaba Health (00241) fell 3.18%, impacting the index by 1.53 points [2] Sector Performance - Large technology stocks generally declined, with Alibaba down 2.26% and Tencent down 1.07% [3] - The pharmaceutical sector saw gains, with notable increases in stocks like Ascentage Pharma-B (06855) up 12.04% and Kintor Pharmaceutical-B (02171) up 11.47% [5][6] - Oil and gas stocks surged due to rising oil prices driven by Middle Eastern tensions, with Jixing New Energy (03395) skyrocketing 343.18% [3][4] - Gold stocks also saw afternoon gains, with Tongguan Gold (00340) up 7.47% as geopolitical tensions continued to influence market sentiment [4] Real Estate Sector - The real estate sector continued to face pressure, with companies like R&F Properties (02777) down 4.17% and Xincheng Development (01030) down 5.83% [6][7] - National statistics indicated a 10.7% year-on-year decline in real estate development investment for the first five months of 2025, with new housing sales also down [7] - Guosen Securities highlighted the ongoing weakness in real estate fundamentals, suggesting that future policy measures could provide opportunities for speculation in real estate stocks [7] Notable Stock Movements - Beijing Construction (00925) surged 220% after announcing a privatization offer at a premium of 250% [8] - Lehua Entertainment (02306) rose 16.42% due to market recognition of its new product WAKUKU [9] - SF Express (09699) reached a new high, increasing 4.59% after revising its delivery service agreements to reflect higher demand [10] - Perfect Medical (01830) issued a profit warning, with expected earnings down 33.5% to 35.1% year-on-year due to weak consumer confidence [11]

Core Viewpoint - The recent price adjustment announcement by the Zhejiang Medical Insurance Bureau has put the domestic flu treatment drug, Oseltamivir Phosphate, back in the spotlight, particularly affecting the "Kewai" brand capsules from Dongyangguang Changjiang Pharmaceutical, which have been suspended from the market due to non-compliance [1] Group 1: Market Position and Pricing - Dongyangguang once held a dominant position in the Oseltamivir market, with the "Kewai" series accounting for 66% of the company's total revenue and 99% of the Oseltamivir granule market share [2] - The listed price for "Kewai" capsules was as high as 9.86 yuan per capsule, nearly ten times higher than the winning bid price of less than 1 yuan from the 2022 national drug procurement [2] - The company utilized a dual-brand strategy to maintain high prices for "Kewai" outside of the procurement framework, despite participating in the bidding process with a different product [2] Group 2: Regulatory and Competitive Challenges - The regulatory environment has shifted, with the National Medical Insurance Bureau strengthening the enforcement of drug procurement, leading to a significant reduction in public hospitals' purchases of high-priced drugs [2] - The introduction of provincial-level drug procurement for Oseltamivir starting in 2023 has further pressured Dongyangguang, with average prices dropping to 2.97 yuan per bag across 20 provinces [3] - New competitors, such as Roche's Marboxil, have begun to capture market share, with Marboxil's share reaching 10.8% in 2024, while Oseltamivir's overall market share has decreased by 8% [3] - Dongyangguang's market share in Oseltamivir has fallen from 64.8% in 2023 to 54.8%, amidst increasing competition from over 120 pharmaceutical companies in the 6.7 billion yuan flu drug market [3] Group 3: Strategic Transition and IPO - In response to the pressure on its core product line, Dongyangguang has been diversifying into new areas, including insulin procurement and the development of leukemia drug Clifotinib, as well as entering the GLP-1 drug sector [4] - The company is at a critical juncture as it prepares for an IPO, having submitted its prospectus on June 11, with plans to privatize Dongyangguang Changjiang, which holds the "Kewai" brand [4] - The market is closely watching how Dongyangguang will navigate the transition to a "post-Kewai era" amid tightening policies, fierce competition, and capital market expectations [4]

Core Viewpoint - The Chinese government is optimizing the centralized procurement policy for drugs and medical supplies to ensure quality and affordability for the public, indicating potential issues with the quality of some procured drugs and the need for further exploration of the policy [1][2][3]. Group 1: Policy Optimization - The State Council is focusing on enhancing the evaluation of drug procurement policies and ensuring the quality of drugs and medical supplies [1][2]. - The 11th batch of drug procurement is expected to take place in 2025, with a target of 700 varieties to be procured [1]. - The introduction of a new pricing mechanism aims to prevent extreme low pricing that could harm consumer confidence and the survival of companies [3][4]. Group 2: Pricing Mechanism Adjustments - The new draft policy suggests a price difference limit of 1.8 times the lowest bid for the same drug, with a focus on avoiding abnormal low pricing [4]. - The extreme low prices observed in recent procurements have raised concerns about their sustainability and potential negative impacts on the pharmaceutical industry [3][7]. - The rapid increase in B-license companies, which do not produce drugs themselves, has led to concerns about quality and market stability [7][8]. Group 3: Quality Assurance - Discussions around the relationship between low prices and drug quality have intensified, especially following the disqualification of a company for failing to meet quality standards [6][7]. - The government emphasizes the need for a transparent regulatory mechanism to ensure drug quality while maintaining competitive pricing [5][6]. - The focus on quality is crucial as low prices could lead to reduced profit margins for manufacturers, potentially impacting their ability to maintain quality and innovate [7][8]. Group 4: Future Directions - The upcoming 11th batch of procurement is seen as a significant reform, reflecting lessons learned from previous rounds and aiming for a more balanced approach to pricing and quality [10][11]. - There is a call for a unified and transparent procurement platform to ensure fair pricing and quality assurance in drug procurement [10][11]. - The need to balance innovation and quality in drug procurement is highlighted, with suggestions to incorporate clinical benefits into the procurement evaluation criteria [11].

Group 1 - The company Fengyuan Pharmaceutical (601089) is focusing on research and development, planning to increase R&D investment continuously [1] - The company's self-developed innovative drug FY101 injection is currently in Phase I clinical trials, with a target enrollment of 62 participants, of which 6 have been enrolled so far [1] - The company has received approval for 11 formulation varieties and 1 raw material drug this year, with 40 varieties under review by the National Medical Products Administration as of June 13, 2025 [1] - The failure to win the bid for the tenth batch of collective procurement of compound α-keto acid will have some impact on future sales, but it will not significantly affect the company's production and operations [1] - The company aims to expand sales in retail markets and other channels, leveraging continuous R&D to launch new products [1] - The retail market coverage includes top 100 chain pharmacies, regional chains, independent pharmacies, and community clinics nationwide [1] Group 2 - Pengyang Fund, established in 2016, has an asset management scale of 119.899 billion yuan, ranking 53rd out of 210 [2] - The asset management scale for non-monetary public funds is 106.687 billion yuan, ranking 45th out of 210 [2] - The fund manages 179 public funds, ranking 37th out of 210, with 24 fund managers, ranking 59th out of 210 [2] - The best-performing public fund product in the past year is Pengyang Beizheng 50 Index A, with a latest net value of 1.4 and a growth of 67.13% over the past year [2] - The latest public fund product raised by the company is Pengyang Heli Bond A, which is a mixed secondary bond type, with a subscription period from June 3, 2025, to September 2, 2025 [2]