Market Overview - In July 2025, all major A-share indices rose, with the ChiNext Index showing the highest increase of 8.14% and the Shanghai 50 Index the lowest at 2.36% [2] - The total margin balance in the Shanghai and Shenzhen markets reached 1,978.497 billion yuan, an increase of 133.858 billion yuan from the previous month [2] Company Research: Zhongchong Co., Ltd. (002891) - In the first half of 2025, Zhongchong Co., Ltd. reported revenue of 2.432 billion yuan, a year-on-year increase of 24.32%, and a net profit of 203 million yuan, up 42.56% [14] - The company has made significant progress in its overseas business, achieving revenue of 1.575 billion yuan from international markets, a growth of 17.61% [14] - The pet food segment, particularly the staple food category, saw substantial growth, with revenue reaching 783 million yuan, a remarkable increase of 85.79% [15] Industry Research: Pharmaceutical and Biological Sector - The pharmaceutical and biological sector experienced a significant increase of 13.93% in July 2025, driven by innovative drugs and CXO segments [5] - Key policies supporting the high-quality development of innovative drugs were introduced, which are expected to positively impact the pharmaceutical and medical device sectors [4] - The cumulative revenue of the pharmaceutical manufacturing industry for the first half of 2025 was 1,227.52 billion yuan, reflecting a year-on-year decline of 1.2% [4] Industry Research: Machinery Equipment Sector - The machinery equipment sector outperformed the market with a 9.82% increase from July 6 to August 5, 2025 [7] - The sales of excavators in the first half of 2025 showed a growth rate exceeding 20%, indicating strong domestic demand [7] - The upcoming World Robot Conference is expected to catalyze investment opportunities in humanoid robots [8] Industry Research: Metals Sector - The steel market is expected to experience limited upward momentum due to recent price adjustments, with short-term prices likely to fluctuate [10] - Copper prices are supported by tight supply despite recent adjustments due to U.S. tariffs [10] - The aluminum market may see price increases if actual inventory demand performs well in the upcoming months [11]

Core Viewpoint - The Hong Kong Stock Connect Medical ETF (trading code: 520510) is set to be listed on the Shanghai Stock Exchange on August 7, 2025, providing investors with a convenient tool to access the Hong Kong medical sector [1] Group 1: ETF Details - The ETF supports T+0 trading, filling a gap in the Hong Kong Stock Connect medical sector [1] - It tracks the Hong Kong Stock Connect Medical Theme Index (932069.CSI), which covers three major sub-sectors within the medical industry [1] Group 2: Index Composition - The ETF has over 30% weight in CXO holdings, leading among all market indices [1] - AI medical holdings account for over 20%, positioning the ETF to benefit from trends such as anti-involution, innovative drug exports, and the AI technology revolution [1]

Group 1 - The core viewpoint of the articles indicates that the Hong Kong stock market, particularly key indices like the Hang Seng Index, experienced a collective adjustment due to disappointing U.S. non-farm payroll data, which has heightened expectations for a more accommodative monetary policy from the Federal Reserve [1] - The innovative drug sector faced significant declines, with the Hang Seng Pharmaceutical ETF (159892) dropping over 3%, while companies like Kangfang Biotech, Boan Biotech, and Tigermed saw notable losses; however, the Hang Seng Biotechnology Index tracked by the ETF still recorded a remarkable increase of over 100% in the past year as of last Friday's close [1] - Looking ahead, two potential directions for investment are highlighted: 1. The overseas expansion of innovative drugs, with ongoing significant business development (BD) and merger and acquisition transactions expected to further catalyze the innovative drug market [1] 2. The recovery of upstream CXO (Contract Research Organization) sector, as leading CXO companies are reporting strong performance during the semi-annual earnings disclosure period, suggesting that they may continue to benefit from the gradual recovery of global innovative drug demand [1] Group 2 - The articles mention the existence of the Hang Seng Pharmaceutical ETF Connect (Class A: 016970, Class C: 016971) [2]

Investment Rating - The industry rating is "Positive" for the next 12 months, indicating an expected increase in performance relative to the CSI 300 index [5][61]. Core Insights - Recent collaboration between Heng Rui Medicine and GSK is expected to boost sentiment in the innovative drug sector, highlighting investment opportunities in pipeline realization, performance growth, and business collaborations [5][60]. - The 11th batch of centralized procurement is underway, suggesting a focus on pharmaceutical and medical device sectors that may benefit from optimized procurement rules [5][60]. - The report emphasizes the importance of monitoring performance reversals in related sectors, particularly in CXO companies, which have shown strong performance amid improving overseas demand and recovering orders [5][60]. Industry News - The Central Committee of the Communist Party and the State Council issued a plan for the implementation of a childcare subsidy system, which may impact the healthcare sector positively [14]. - The National Healthcare Security Administration released guidelines for the immediate settlement of basic medical insurance funds, aiming to enhance efficiency in fund disbursement [14]. Company Announcements - Heng Rui Medicine signed a collaboration and licensing agreement with GSK, which includes a $500 million upfront payment and potential milestone payments totaling approximately $12 billion for successful project developments [28]. - WuXi AppTec reported a 20.64% year-on-year increase in revenue for the first half of 2025, with net profit rising by 101.92% [29]. - CSPC Pharmaceutical announced an exclusive licensing agreement with Madrigal for the development of SYH2086, with potential total payments of up to $2.075 billion [30]. - Tigermed announced the acquisition of a stake in Japan's MICRON for approximately ¥484 million (about 23.48 million RMB) [31]. Market Review - For the week of July 25 to July 31, 2025, the Shanghai Composite Index fell by 0.90%, while the Shenzhen Component Index dropped by 1.64%. In contrast, the pharmaceutical and biological sector rose by 2.74%, with most sub-sectors showing positive performance [52]. - As of July 31, 2025, the price-to-earnings ratio (TTM) for the pharmaceutical and biological industry was 30.83, with a valuation premium of 161% compared to the CSI 300 index [57].

Investment Rating - The report maintains an "Outperform" rating for multiple leading innovative drug companies and CXOs in the healthcare sector [2]. Core Insights - The report emphasizes a sustained positive outlook on the innovative drug industry and its supply chain, highlighting the importance of increasing allocations to leading companies in this space [4][6]. - The performance of the Hong Kong stock picks portfolio showed an average increase of 27.1% in July 2025, outperforming the Hang Seng Healthcare Index, which rose by 22.8% [5][9]. - Major business development (BD) and merger & acquisition (M&A) activities in the innovative drug sector are ongoing, with significant deals reported, indicating a robust market environment [6][35][36]. Summary by Sections Investment Focus - The report lists several companies with an "Outperform" rating, including 恒瑞医药 (Hengrui Pharmaceuticals), 迈瑞医疗 (Mindray), 药明康德 (WuXi AppTec), and others [2]. Performance Analysis - The July 2025 Hong Kong stock picks portfolio included companies like 信达生物 (Innovent Biologics) and 百济神州 (BeiGene), with top performers showing significant gains, such as 映恩生物 (DualityBio) at +48.0% [5][10]. - The healthcare sector in Hong Kong saw notable gains, with companies like 华检医疗 (IVD Medical) and 加科思-B (Jacobio Pharmaceuticals) leading the way [6][34]. Market Trends - The report highlights a recovery in the global innovative drug sector, with leading CXO firms like 药明合联 (WuXi XDC) and 药明康德 (WuXi AppTec) reporting strong earnings growth [7][37]. - Optimized centralized procurement policies and steady progress in innovative drug reimbursement are noted, with over 100 drugs applying for inclusion in the innovative drug reimbursement list [7][38][39]. Company-Specific Insights - 石药集团 (CSPC) and 中国生物制药 (Sino Biopharmaceutical) are newly added to the top picks, with strong potential in their respective innovative drug pipelines [4][32]. - The report discusses the promising clinical pipelines of companies like 三生制药 (3SBio) and 信达生物 (Innovent Biologics), indicating robust growth prospects [18][23].

Core Viewpoint - The Hong Kong Stock Connect Innovative Drug ETF (159570) has seen significant inflows and growth, indicating strong investor interest in the innovative drug sector [1][5]. Group 1: ETF Performance - The Hong Kong Stock Connect Innovative Drug ETF (159570) opened with a surge, rising over 2% with a trading volume exceeding 900 million yuan, and net inflows surpassing 770 million yuan in the last two days [1]. - As of July 30, the ETF's latest scale exceeded 11.9 billion yuan, setting a new historical record and leading in scale and liquidity among its peers [1]. Group 2: Index Composition - The majority of the constituent stocks of the Hong Kong Stock Connect Innovative Drug ETF showed positive performance, with Lepu Biopharma rising over 5% and CSPC Pharmaceutical Group increasing over 3% [3]. - The index will be revised to exclude Contract Research Organizations (CROs), ensuring it reflects a 100% purity of innovative drugs, which are directly linked to drug commercialization success [5][6]. Group 3: Major Transactions - CSPC Pharmaceutical Group entered into a significant exclusive licensing agreement with Madrigal Pharmaceuticals, potentially worth up to 2.075 billion USD for the oral GLP-1 receptor agonist SYH2086 [6]. - China National Pharmaceutical Group's subsidiary is expected to receive a milestone payment of 300 million USD for a technology transfer related to a PD-1/VEGF dual antibody [7]. Group 4: Industry Drivers - The innovative drug sector is driven by three main factors: accelerated internationalization, supportive policies, and technological breakthroughs [8]. - Internationalization is highlighted by the increasing presence of domestic innovative drug data at international conferences and a rise in overseas business development transactions [8]. - Recent supportive policies for the innovative drug industry include measures to encourage investment and optimize procurement, indicating a new development cycle for the sector [8]. - Technological advancements in areas such as ADC, GLP-1, and immune-oncology are leading to significant innovations and market opportunities [8].

而展望2025年及后续几年： 1）需求端随着全球步入降息周期，已逐步复苏，业绩端陆续兑现； 2）供给端因部分头部企业放缓扩产进程，中小企业部分关停，产能持续去化，行业整体趋向动态平衡 发展； 3）业绩端，2025年部分企业大订单高基数影响已基本消化出清，CXO行业将进入平稳增长阶段。 从外部宏观环境来看，情况也有所缓解，估值陆续修复。2025年4月受关税政策冲击，部分出海CXO公 司出现较大幅度回撤。从业务层面看，CRO业务属服务类业务，不受商品关税影响；CDMO特别是商 业化项目直发美国市场的占比较少，预计影响有限。供应链的转移非一朝一夕能够落地的。目前看出海 CXO仍然是增长确定性更强的，同时部分企业已积极采取措施以规避风险，如剥离美国受限业务，以 欧洲、东南亚作为国际化产能新方向等。随着中美关税的边际缓和，CXO企业已逐步迎来估值修复。 另外，可关注内需修复及行业出清后集中度提升。国内创新药支持政策频出，行业需求有望逐步回暖。 同时H股市场的回暖、科创板第五套标准的重启、创新药BD的火热等均为早期研发的需求复苏提供新 动能。此外国内CXO企业经历几年需求遇冷、价格竞争，倒逼企业降本增效，成本结构的改善具 ...

医疗板块器械、CXO齐发力，迈瑞医疗大涨超4%，药明康德续涨逾2%。A股最大医疗ETF（512170） 盘中涨逾1%，价格创2024年11月13日以来新高，实时成交超5亿元。今日有望实现日线11连阳，续创上 市6年来最长连阳纪录！ 近期制药、医疗板块利好频发，催化密集。 药明康德交出"史上最强"半年报。上半年营业收入、净利润、在手订单均创下历史新高，第二季度单季 营收首次站上百亿元台阶。公司启动首次中期分红10亿元，并上调全年收入增速预期至13%-17%。 A股"吃药"行情继续！7月30日早盘，创新药、中药联袂拉涨，全市场首只也是目前唯一跟踪制药指数 的药ETF（562050）盘中摸高1.37%，成份股华润双鹤一度涨停，科伦药业、达仁堂涨超5%居前。 把握中国龙头药企价值重估机遇，配置工具关注国内首只药ETF（562050）。聚焦A股50大龙头药企， 重仓创新药，兼顾高壁垒仿制药及中药，且完全不含医疗和CXO。 把握CXO、医疗器械拐点向上机遇，可以关注A股最大医疗ETF（512170）。聚焦"医疗器械+医疗服 务"，与AI医疗高相关，覆盖6只CXO龙头股。场外联接基金（A类 162412 / C类 0123 ...

Core Viewpoint - The Hong Kong medical ETF (159366) has seen significant gains, driven by the booming market for innovative drugs and medical devices, with a notable increase of over 25% in the past month and a continuous rise for five consecutive days [1][4]. Group 1: ETF Performance - The Hong Kong medical ETF (159366) rose by 1.96% to 1.564, reflecting strong market interest [2]. - Over the past 5 days, the ETF has increased by 11.40%, and over the past 20 days, it has risen by 23.54% [2]. - The ETF is noted for having the highest concentration of CXO companies in the market, focusing on AI drug development, CXO, and medical devices [6]. Group 2: Company Developments - MicroPort Medical announced that Shanghai Shenda Capital has become a strategic shareholder, indicating the active role of merger funds in supporting local biopharmaceutical leaders [4]. - The strategic investment aims to enhance MicroPort Medical's position as a leader in high-end medical device innovation in China [4]. Group 3: Industry Insights - The National Healthcare Security Administration recently held a forum to discuss support for innovative drugs and medical devices, highlighting the significant policy, research, manufacturing, and market advantages of China's innovative drug and device sector [4]. - CXO leader WuXi AppTec reported a net profit of 8.56 billion yuan, a year-on-year increase of 101.9%, with a strong order backlog indicating robust growth potential [5]. - Market analysts suggest focusing on sectors with stable growth, particularly medical devices and pharmaceuticals, as the impact of centralized procurement is gradually diminishing [6].

Market Performance - The ChiNext Index rose by 1.86% and the Sci-Tech Innovation Index increased by 1.78%, with the Double Innovation Leader ETF (588330) showing high elasticity, surging by 2.56% to reach a year-to-date high of 0.640 yuan, marking a nine-day consecutive gain [1] Sector Performance - Major stocks in the optical module sector led the gains, with Tianfu Communication rising over 13%, Zhongji Xuchuang increasing by more than 9%, and Xinyi Sheng up over 8% [3] - The pharmaceutical and biological sector also saw significant increases, with Tigermed up over 8%, and Zhifei Biological and Kanglong Chemical both rising by over 6% [3] - The photovoltaic sector performed well, with Daqo New Energy increasing by over 5% and Trina Solar rising by more than 4% [3] Fund Flow - Significant capital inflow was observed in the Double Innovation direction, with net inflows of 12.596 billion yuan in electronics, 8.284 billion yuan in pharmaceuticals, 7.267 billion yuan in communications, and 3.748 billion yuan in power equipment, ranking as the top four among 31 first-level industries [4][6] Industry Highlights - In the optical module sector, the Shanghai Municipal Economic and Information Commission issued measures to expand AI applications, which may have catalyzed the surge in major optical module stocks [7] - In the pharmaceutical sector, three major positive factors were noted: WuXi AppTec's strong performance boosting the CXO sector, a major business development deal by Hengrui Medicine, and favorable policies from the National Medical Insurance Administration [7] - In the power equipment sector, the photovoltaic industry is becoming a representative sector against "involution," with initial success in price adjustments across the supply chain [7] Investment Outlook - Future market trends suggest a focus on "rotation and rebound," with growth sectors expected to follow cyclical sectors. The technology (AI, chips) and new energy sectors are anticipated to regain cost-effectiveness [8] - The Double Innovation Leader ETF (588330) is highlighted for its characteristics: diversified cross-market allocation, a focus on strategic emerging industries, and high elasticity for capturing technology market trends [8]