Summary of Conference Call Notes Industry Overview - The focus remains on the innovative drug sector, benefiting from business development (BD) transactions and data catalysts, with companies like Heng Rui continuing to push forward despite recent large transactions not meeting expectations [1][2] - The CRO (Contract Research Organization), CDMO (Contract Development and Manufacturing Organization), and upstream supply chain are benefiting from anticipated interest rate cuts in the U.S. and recovering order performance [1][2] - Medical devices, particularly high-consumption and equipment sectors, are showing signs of reversing performance difficulties, with Q3 expected to show improvement [1][2] Key Investment Strategies - Emphasis on the innovative drug line, with catalysts from the ESMO conference and BD transactions, alongside Q3 performance improvements [1][5] - Attention to the impact of basic drug directory policies and adjustments in traditional Chinese medicine companies, which may provide short-term catalysts [1][5] - Portfolio adjustments in October 2025 included increasing positions in companies like Changchun High-tech, Xianju Pharmaceutical, Betta Pharmaceuticals, and Tengke Pharmaceuticals, as well as companies showing performance inflection points [1][6] Core Recommendations - Recommended stocks based on three criteria: vertical extension capability in the supply chain, realization capability, and systematic early-stage R&D platform capability [9] - Specific recommendations include Changchun High-tech, Betta Pharmaceuticals, Amgen Pharmaceuticals, and Xiansheng Pharmaceuticals [9] - Notable mentions include Amgen, WuXi Biologics, and Miaomei Helian, expected to benefit from strong Taiji business, recovery in monoclonal antibody business, and high growth in ADC projects, with significant earnings growth anticipated in 2025 [1][19] Sector-Specific Insights - The innovative drug sector is viewed as the strongest and most fundamentally sound segment, with a focus on recovery from previous difficulties and policy changes [3][4] - CROs are showing early signs of recovery, with significant performance from WuXi and similar companies [3][4] - Medical devices are also recovering, with various companies performing well across different segments [4] Company-Specific Developments - **Betta Pharmaceuticals**: Notable for strong financial performance and ongoing business development, including an IPO process in Hong Kong expected to bring positive momentum [10] - **Amgen Pharmaceuticals**: Recently introduced strategic investment from Haizheng Pharmaceuticals, enhancing future growth prospects [11] - **Miaomei Helian**: Positioned as a leader in the ADC CRDMO sector, with significant growth expected from backend projects [20] - **Tianyu Co.**: Anticipated to maintain strong growth due to a diverse product pipeline and CDMO business expansion [25] - **Lianbang Pharmaceuticals**: Focused on innovative drugs, with several promising projects in clinical trials expected to drive future growth [26][27] Market Performance - The recommended portfolio showed an average increase of 5.5 percentage points in September, outperforming the broader pharmaceutical sector by 7.2 percentage points [6] - Specific stocks like Changchun High-tech and WuXi Biologics saw significant price increases of 26% and 23%, respectively [6] Conclusion - The innovative drug sector remains a key focus for investment, with several companies showing promising signs of recovery and growth potential. The overall sentiment is positive, with expectations for continued performance improvements in Q3 and beyond, driven by strategic investments and favorable market conditions [1][2][5]