Group 1 - The Hang Seng Biotechnology ETF (159615) has seen a 2.27% increase, marking a three-day rising streak with an active trading volume of 35.71% and a transaction value of 131 million yuan [1] - The Hang Seng Biotechnology Index, which the ETF tracks, rose by 1.67%, with notable increases in constituent stocks such as JD Health (up 12.22%) and Sihuan Pharmaceutical (up 8.49%) [1] - The ETF has accumulated a 2.72% increase over the past week, ranking first among comparable funds, and its latest scale reached 352 million yuan, a three-month high [1] Group 2 - According to Guojin Securities, China's innovative drugs are on the rise, entering the initial phase of innovation results realization, with significant opportunities for independent development and large-scale transactions in the future [2] - In the oncology field, two main directions are highlighted: the multidimensional iteration of ADCs (antibody-drug conjugates) and innovations in the combination of immune therapy molecular components [2] - The Hang Seng Biotechnology Index reflects the overall performance of the largest 50 biotechnology companies listed in Hong Kong, with top-weighted stocks including BeiGene, Innovent Biologics, and WuXi Biologics [2]

Group 1 - The Chinese traditional medicine index (930641) has shown a slight increase of 0.20% as of July 25, 2025, with notable gains from companies such as Zhenbao Island (603567) up 5.92% and Fangsheng Pharmaceutical (603998) up 1.67% [1] - The Chinese traditional medicine ETF (159647) has increased by 0.19%, with a recent price of 1.03 yuan and a one-month growth of 5.56% [1] - The National Medical Products Administration has approved the first secondary protection variety of traditional Chinese medicine, the Xia Liqi Capsule from Shijiazhuang Yiling Pharmaceutical Co., with a protection period of seven years [1] Group 2 - Chinese innovative drug companies are transitioning from quantitative to qualitative changes, with expectations of significant business development (BD) transactions in the coming years, leading to potential mergers and acquisitions [2] - The next 5 to 10 years are anticipated to be a period of explosive growth for Chinese innovative drugs, with domestic companies expected to emerge as globally competitive multinational corporations (MNCs) [2] - The traditional Chinese medicine ETF closely tracks the traditional Chinese medicine index, which reflects the overall performance of listed companies involved in the production and sales of traditional Chinese medicine [2] Group 3 - As of June 30, 2025, the top ten weighted stocks in the traditional Chinese medicine index account for 55.96% of the index, including companies like Pian Zai Huang (600436) and Yunnan Baiyao (000538) [3]

Economic Performance - China's GDP grew by 5.3% year-on-year in the first half of the year, indicating better economic performance compared to the same period last year [21] - The industrial added value for large-scale enterprises increased by 6.4% year-on-year, showcasing the resilience of the domestic economy [23] - Retail sales of consumer goods rose by 5% year-on-year, reflecting a recovery in consumer demand [23] Cultural and Technological Trends - Labubu has surpassed KAWS and other popular figures to become a leading global trend in art toys, with a stock price increase of 190% in the first half of the year [3] - The animated film "Nezha 2" achieved a global box office of 15.9 billion yuan, setting a record as the highest-grossing animated film in history [5] - DeepSeek has emerged as a leading AI tool, surpassing ChatGPT in monthly visits and driving significant interest in the AI sector, with a 55.3% increase in related stocks in the A-share market [6][9] Pharmaceutical Innovations - Chinese innovative pharmaceuticals are gaining global traction, with revenue from external licensing nearly matching the total for the previous year within just half a year [13] - The Hong Kong stock index for innovative pharmaceuticals has surged over 60% in the first half of the year, indicating strong market performance [13] - Global capital is reassessing Chinese companies, with Goldman Sachs introducing the concept of "Ten Giants" in China, predicting a 13% profit increase over the next two years [15] Economic Resilience - The manufacturing PMI has risen for two consecutive months, with 11 industries experiencing collective expansion, signaling a recovery in demand [19] - The new orders index has returned to above 50%, indicating a rebound in demand and increased factory activity [19] - The current global economic order is facing challenges from unilateralism and protectionism, particularly due to U.S. tariff policies [17]

Core Insights - Chinese innovative pharmaceutical companies are increasingly engaging in large-scale business development (BD) transactions, signaling a shift from being "followers" to "participants" and "contributors" in the global pharmaceutical landscape [1][6][10] Group 1: Major BD Transactions - Recently, major BD deals have been reported, including a $60 billion deal by 3SBio and a $53.3 billion strategic collaboration between CSPC and AstraZeneca [1][3] - In January, Innovent Biologics licensed its DLL3 ADC to Roche for $800 million upfront and potential milestone payments up to $1 billion [1][2] - In March, HAPO announced a global strategic partnership with AstraZeneca, receiving $175 million upfront and potential milestone payments up to $4.4 billion [2][3] Group 2: Market Trends and Growth - The total value of BD transactions for Chinese innovative drugs is projected to reach $52.3 billion in 2024, with an upfront payment of $4.1 billion, both setting historical records [3][5] - As of May 27, 2024, the total value of BD transactions for Chinese innovative drugs has already reached $45.5 billion, indicating a strong growth trajectory [3][5] Group 3: Policy and Regulatory Support - The Chinese government has implemented a series of reforms to support innovative drug development, including a significant reduction in drug approval times from an average of 3 years to 60 days [6][7] - The recent proposal to further reduce clinical trial approval times to 30 working days aims to enhance the efficiency of drug development [7][8] Group 4: Competitive Advantages - Chinese innovative drugs are becoming increasingly attractive to multinational pharmaceutical companies due to their cost-effectiveness and faster development timelines [10][11] - The average R&D cost for innovative drugs in China is significantly lower than in the U.S., with estimates suggesting costs are 20% to 30% of those in the U.S. [11][12] Group 5: Industry Positioning - China has emerged as a leader in the global pharmaceutical innovation landscape, with the number of innovative drugs entering clinical trials surpassing that of the U.S. [8][9] - The number of innovative drugs approved in China has increased dramatically, from 3 in 2015 to 39 in 2024, marking a twelvefold increase [7][8]

Core Viewpoint - A technological revolution in the global pediatric eczema treatment field is being led by Chinese pharmaceutical companies, exemplified by Shanghai Zedman Pharmaceutical Technology Co., Ltd. with its innovative non-hormonal eczema medication, Zeli Mei Cream, which sets a new benchmark for Chinese innovative drugs globally [1][4]. Company Summary - Shanghai Zedman Pharmaceutical Technology Co., Ltd. has developed Zeli Mei Cream, the world's first non-hormonal eczema medication suitable for children aged 2 to 12, addressing a significant gap in the safety of pediatric medications [4]. - The company has invested over 350 million yuan in the development of Zeli Mei and has secured 12 domestic and international patents [4]. - Zedman is recognized as a rising star among local innovative pharmaceutical companies, with its chairman, Dr. Chen Genghui, being a prominent figure in the AhR field and the inventor of the globally first innovative drug in this area [3][4]. Industry Summary - The Chinese innovative drug sector is transitioning from a follower to a leader in the global pharmaceutical landscape, with the value of domestic pharmaceutical companies accelerating [2]. - In 2024, the external licensing transaction value of Chinese innovative drugs is projected to reach $12.7 billion, with a growth rate exceeding 40% for three consecutive years [2]. - The success of Zeli Mei Cream is indicative of a broader trend in the Chinese pharmaceutical industry, where local companies are making significant breakthroughs across various therapeutic areas, including oncology and dermatology [3]. Market Demand - There are approximately 35 million children suffering from eczema in China, with the condition significantly impacting their physical and mental well-being [5]. - The treatment landscape for pediatric eczema has been limited, with about 65% of mild to moderate eczema patients relying on hormonal ointments, which can lead to adverse effects in 42% of cases [6][8]. - A significant majority (80%) of parents prefer non-hormonal medications for their children, highlighting a strong market demand for alternatives like Zeli Mei Cream [9]. Clinical Value - Zeli Mei Cream has demonstrated rapid efficacy, with clinical data showing an 83.9% response rate in children and significant improvement in eczema severity within eight weeks of treatment [8]. - The medication offers a safe alternative to traditional hormonal treatments, with most adverse reactions being mild and transient [8].

Group 1 - The Hang Seng Biotechnology ETF (159615) opened with a gap up, rising over 4% during the day, reaching a high of 1.008 yuan, marking a new high for the year [1] - The fund saw a turnover of 18.97% with a transaction volume of 61.0632 million yuan, indicating active market trading [1] - The Hang Seng Biotechnology Index surged by 3.83%, with constituent stocks such as Innovent Biologics rising over 16%, Zai Lab increasing by 7.66%, and Tigermed up by 6.42% [1] Group 2 - The National Medical Products Administration recently approved 11 new drugs for market launch, covering areas such as oncology and endocrinology, with several being the "first in China" or "first domestic" in their respective fields [1] - Among the 11 new drugs, 7 are classified as Category 1 drugs, representing the highest level of drug innovation in China's registration classification [1] - Guotai Junan Securities reported that the number of oral presentations for Chinese innovative drug assets at ASCO reached a historical high of 73, reflecting the growing demand for Chinese innovative drug assets from multinational corporations [2] Group 3 - The Hang Seng Biotechnology Index aims to reflect the overall performance of the largest 50 biotechnology companies listed in Hong Kong, with the top ten weighted stocks including Innovent Biologics, WuXi Biologics, BeiGene, and others [2]

Core Insights - The Chinese innovative drug industry is undergoing a significant transformation, moving from a catch-up phase to a leading position in certain areas, particularly in liver disease research [1][2] - At the recent EASL Congress 2025, 13 research teams from China presented findings on various aspects of liver disease, showcasing the country's advancements in this field [1] - The clinical trial results for the hepatitis B drug Hepalapide have shown promising outcomes, achieving sterilizing cure standards, which has garnered significant attention from experts [2] Industry Overview - The global transaction value involving Chinese innovative drug companies reached $51.9 billion in 2024, with upfront payments totaling $4.1 billion, indicating increasing international interest [4] - The proportion of molecules introduced by global pharmaceutical companies from Chinese innovative drug firms rose from 0% in 2019 to 31% in 2024, highlighting the growing importance of Chinese innovation in the global pharmaceutical landscape [4] - Hepalapide is expected to enter Phase III clinical trials, potentially becoming the first drug capable of clearing cccDNA, offering new hope for chronic hepatitis B patients [4] Government Support - The rapid development of Chinese innovative drugs is supported by a series of government policies since 2015, facilitating a shift from generic to innovative drug development [5] - Reforms in drug review and approval processes have accelerated the market entry of innovative drugs, while the establishment of various stock exchanges has provided crucial financing channels for unprofitable innovative drug companies [5] - The successful development of drugs like Hepalapide aligns with the goals set out in the "Healthy China 2030" initiative, indicating a strong market outlook for these innovations [5]

Core Insights - The recent investments by multinational pharmaceutical companies in China highlight the growing importance of the Chinese market for global players [1][4][5] - The establishment of new production facilities by Roche and AstraZeneca signifies a strategic move to enhance local production capabilities and supply chains [2][3] Investment Projects - Roche has launched a new biopharmaceutical production base in China with a total investment of 2.04 billion yuan, covering approximately 53 acres and 25,000 square meters, aimed at localizing the production of its innovative drug [2] - AstraZeneca's new small molecule drug factory in Wuxi has a total investment of 475 million USD (approximately 3.44 billion yuan) and will enhance production capacity for cardiovascular innovative drugs, expected to be operational by Q4 2028 [2] Market Dynamics - The Chinese pharmaceutical market is experiencing significant growth, driven by an aging population and increasing healthcare demands, with projections indicating that by 2035, nearly 30% of the population will be over 60 years old [4] - In 2024, AstraZeneca reported a revenue of 6.413 billion USD from the Chinese market, accounting for 12% of its global market share, while Novartis achieved 3.9 billion USD from China, reflecting a 21% year-on-year growth [4] Policy Support - The Chinese government is actively promoting foreign investment in the biopharmaceutical sector through policies aimed at facilitating the entry of foreign companies and expediting the approval process for innovative drugs [5] - The rise of Chinese innovative drugs and a favorable research environment are key factors attracting foreign investments, with 31% of new innovative drug candidates introduced by multinational companies in 2024 originating from China [5]