Summary of Conference Call Notes Industry Overview - The A-share brokerage sector has experienced a lagging performance, with a year-to-date increase of only 3% until last week, followed by a recovery of approximately 8%, resulting in a cumulative increase of about 11%, which still trails behind the overall market index's strong performance [1][3] - In contrast, Hong Kong's Chinese brokerage firms have shown robust performance this year, with an increase exceeding 60%, significantly outpacing A-shares. This is attributed to the clear valuation advantage of Hong Kong brokers, which were valued at 0.5-0.6 times before recovery and have now improved to 0.9-1 times, attracting more capital allocation [1][3] - There is a notable structural difference in the brokerage sector this year, with large Chinese brokerages outperforming smaller thematic firms, indicating a shift in investment logic from expectations to actual performance and valuation support [1][3][4] Market Trends and Predictions - The overall market trend remains upward, with sector rotation occurring. The brokerage industry has entered a dual phase of performance and valuation recovery, supported by stable trading and margin financing data, policy support, economic stabilization, and improved expectations driving capital participation [1][5] - A small slow bull market is expected in 2025, with equity asset returns projected between 5%-15%, which will attract external capital into the market. Resident savings are gradually entering the market, albeit in a gradual manner [6][7] Trading and Financing Data - Despite trading and margin financing data reaching historical highs, the number of listed companies has significantly increased from over 2,000 in 2015 to more than 5,000 now, with total market capitalization growing from approximately 46 trillion to nearly 100 trillion. This indicates a stable upward market trend [8] - Brokerages have reduced performance volatility through bond investments and derivatives, with the recovery in the equity market boosting related business activities [8] Hong Kong Market Impact - The Hong Kong market is performing strongly in 2025, with bullish trends in trading volume, IPOs, refinancing, and derivatives markets. The market share of Chinese brokerages in Hong Kong is continuously increasing, significantly benefiting leading firms [9] Future Performance Expectations - The performance recovery of the brokerage sector is expected to be sustainable, with high certainty for 2025 and growth potential for 2026 as long as the overall market continues to rise. Current average valuation levels are at 1.66 times, which is relatively high compared to historical levels, but the current valuation percentile is low, suggesting a focus on high-quality brokerages valued around 1-1.1 times [10][12] Wealth Management and Local State-Owned Brokerages - Local state-owned brokerages are actively expanding their business, with relatively low current market response, but their valuation around one time is worth considering. All business lines benefit from the development of the capital market, including fund products and private equity, positively impacting wealth management [11] Investment Opportunities - High-quality securities firms, especially during adjustment periods, present excellent investment opportunities. It is recommended to focus on these firms during market developments, as they possess fundamental and valuation support, which will make them stronger in future market trends [12]

Group 1: Fertilizer Industry - The international and domestic fertilizer price gap is widening due to increased global planting area, particularly in South America and India, while new industry capacity is limited [1] - Geopolitical conflicts have impacted overseas supply and fertilizer transportation, further supported by high industry concentration and domestic leading companies reducing production to maintain prices [1] - The growth in crop planting area driven by food security concerns is expected to continue boosting fertilizer demand, benefiting domestic leading companies with improved profitability [1] Group 2: Healthcare Industry - The healthcare industry is expected to see a clear trend of performance and valuation recovery in the second half of 2025, with increasing differentiation among companies [2] - Emphasis on innovation-driven strategies, internationalization, self-control, and outpatient marketing model reforms will be key focus areas for investment in the second half of the year [2] - The innovative drug sector is anticipated to benefit from strong domestic policy support and overseas achievements, leading to steady growth in the sector [2] Group 3: Coconut Water Market - The terminal market size for coconut water is projected to reach approximately 7 billion yuan in 2024 and nearly 20 billion yuan by 2029, indicating a CAGR of about 20% over the next five years [3] - China's per capita coconut water consumption in 2024 is expected to be 0.08 liters per person, significantly lower than that of the US, UK, and Thailand [3] - Supply chain and distribution channels are identified as core competitive barriers, with companies possessing relevant advantages likely to succeed in the long term [3]

Group 1 - The Hang Seng Index and Hang Seng Tech Index experienced fluctuations, with the Hang Seng Healthcare Index rising by 2.88% and the Hang Seng Healthcare Index ETF (159557) increasing by 2.82% with a turnover rate exceeding 3% [1] - Notable stocks in the healthcare sector included Federated Pharmaceutical, which rose over 8%, along with other companies like CSPC Pharmaceutical and Kangzheng Pharmaceutical also showing gains [1] - The upcoming American Society of Clinical Oncology (ASCO) annual meeting from May 30 to June 3, 2025, is expected to showcase over 70 research results from Chinese pharmaceutical companies, highlighting innovative drug candidates with potential for best-in-class status [1] Group 2 - Citic Securities indicated a clear trend of performance and valuation recovery in the healthcare industry, with a focus on innovation-driven strategies and internationalization, as well as reforms in outpatient marketing models for the second half of the year [2] - The A-share pharmaceutical sector and Hong Kong's innovative drug sector are currently at five-year low positions, with public fund holdings in the pharmaceutical industry reaching their lowest point since Q2 2020 in Q4 2024, but showing signs of recovery in Q1 2025 [2] - The global pharmaceutical investment and financing scale has shifted from a downward trend to a low-level oscillation upwards, with many growth-oriented pharmaceutical companies currently having PEG levels below 1, indicating potential for performance and valuation improvements [2] Group 3 - China’s innovative drug licensing out (Lisence out) total amount is projected to exceed $50 billion in 2024, reaching $51.9 billion, a year-on-year increase of 27.4%, accounting for 30% of the global total in similar transactions [3] - The record licensing amount for SSGJ-707 is expected to accelerate the trend of Chinese pharmaceutical companies expanding internationally, with a noticeable increase in the number and value of licensing out agreements in recent years [3]