Core Viewpoint - The innovative drug sector is experiencing fluctuations, with the ChiNext innovative drug ETF (589720) dropping over 3%. However, there has been a net inflow of over 110 million yuan in the past 10 days, indicating a buying opportunity as the sector's cost-effectiveness becomes apparent after significant adjustments [1]. Group 1: Market Trends - The innovative drug sector has undergone substantial adjustments in the past two months, leading to improved cost-effectiveness for investments [1]. - Recent slight corrections in the pharmaceutical sector are seen as potential bottom-fishing opportunities, driven by a recovery in capital market financing and an increase in the scale of innovative drug transactions abroad [1]. - The demand for domestic innovative drug research and development is showing signs of recovery, supported by the recent interest rate cuts in the U.S. which may lead to performance recovery in the CXO industry [1]. Group 2: Future Outlook - The innovative drug sector is expected to primarily focus on business development (BD) expectations, with the re-establishment of BD being a key factor for the sector's recovery [1]. - Data indicates that BD typically accounts for about 40% of the annual total in the fourth quarter, suggesting significant potential for growth during this period [1]. - Major products within the sector continue to hold strong expectations, contributing to the overall positive outlook [1]. Group 3: ETF Insights - The ChiNext innovative drug ETF (589720) focuses on innovative drug companies listed on the ChiNext board, tracking a representative index of 30 high-quality companies [1]. - The ETF is primarily composed of high-growth biotech firms and features a 20% limit on daily price fluctuations, making it more aligned with the sector's volatility [1].

Core Viewpoint - The innovative drug sector has rebounded strongly after a two-month lull, with the Guotai Innovation Drug ETF (589720) rising over 4%, leading the market [1] Group 1: Market Performance - The innovative drug sector experienced a significant adjustment, with the Guotai Innovation Drug ETF (589720) declining nearly 18% from September 4 to October 30 [1] - Recent volatility in the innovative drug sector is attributed to market style shifts and short-term capital flow factors [1] Group 2: Future Outlook - The innovative drug sector is expected to remain driven by BD (business development) expectations, with the re-establishment of BD anticipated to be key for the sector's recovery [1] - Historically, BD accounts for approximately 40% of annual transactions in the fourth quarter, indicating potential for growth [1] - After substantial adjustments, the cost-effectiveness of investments in the innovative drug sector is becoming more apparent [1] Group 3: Investment Opportunities - Recent pullbacks in the pharmaceutical sector may present bottom-fishing opportunities, as capital market financing is recovering and the demand for domestic innovative drug R&D is rebounding [1] - The CXO industry is expected to see performance recovery, aided by the recent interest rate cuts in the U.S. [1] - Investors are encouraged to focus on the clinical progress of authorized innovative drug pipelines overseas [1] Group 4: ETF Focus - The Guotai Innovation Drug ETF (589720) targets innovative drug companies on the Sci-Tech Innovation Board, tracking a representative index of 30 high-quality companies [1] - The ETF primarily focuses on high-growth biotech firms, with a 20% limit on daily price fluctuations, making it more aligned with sector volatility [1]