Group 1: China Biopharmaceutical (1177 HK) - The company announced a proposed acquisition of 95.09% of Lixin Pharmaceutical for a transaction price of up to $951 million, with a net payment of approximately $501 million after accounting for Lixin's estimated cash and bank deposits of $450 million on the closing date [1][2] - The acquisition will integrate Lixin's four differentiated technology platforms and eight clinical-stage drug candidates, including PD-1/VEGF bispecific antibody and GPRC5D ADC, which have licensing agreements with Merck and AstraZeneca totaling $4 billion [2] - The target price has been raised to HKD 8.00 based on the acquisition and cost reduction efforts, reflecting a potential upside of 17.3% [1][2] Group 2: Flat Glass (6865 HK) - The company expects a significant quarter-on-quarter increase in earnings for 1H25, with a projected profit of RMB 230-280 million, and a midpoint increase of 41% for 2Q25 [3] - The photovoltaic glass industry has seen substantial production cuts since June, with inventory accumulation slowing down, and prices are expected to bottom out and recover starting in August [3] - The target price has been slightly adjusted to HKD 11.45 due to the weaker-than-expected price trends, maintaining a buy rating [3] Group 3: Securities Industry - The securities industry is experiencing strong growth in earnings, with a projected year-on-year increase of 65%-80% for the first half of 2025, averaging a growth of 72% [6][7] - The brokerage business is expected to rebound significantly due to a low base from the previous year, with self-investment income being a major driver of profit growth [6] - The sector's valuation remains attractive, with the A-share securities industry index trading at a price-to-book ratio of 1.38, indicating potential for further valuation increases supported by strong earnings growth [6]

Core Viewpoint - China National Pharmaceutical Group announced the acquisition of 95.09% equity in Lixin Pharmaceutical for up to $951 million, with a net payment of approximately $501 million after accounting for cash and bank deposits [1] Group 1: Acquisition Details - The acquisition price is set at no more than $951 million, equivalent to approximately 6.8 billion RMB [1] - After excluding estimated cash and bank deposits of about $450 million, the net payment for the acquisition will be around $501 million, or approximately 3.6 billion RMB [1] - Lixin Pharmaceutical will become a wholly-owned subsidiary of China National Pharmaceutical Group following the completion of the transaction [1] Group 2: Technology Platforms and Pipeline - Lixin Pharmaceutical has four differentiated technology platforms that will enhance the self-research capabilities of China National Pharmaceutical Group [1] - The platforms include specific antibody development for tumor microenvironment antigens, antibody development for difficult drug targets, a new generation of antibody-drug conjugates, and conditionally activated immune cell connectors [1] - Lixin has eight candidate drugs in clinical stages, with significant licensing agreements totaling $4 billion for PD-1/VEGF bispecific antibody and GPRC5D ADC [1] Group 3: Clinical Trials and Market Potential - The LM-108 monoclonal antibody, a leading candidate in the pipeline, shows first-in-class potential and has demonstrated excellent efficacy in clinical trials [1] - The median progression-free survival (mPFS) for LM-108 in various patient groups reached 8.1, 13.2, and 6.9 months [1] - The global peak sales potential for LM-108 is estimated to reach $8 billion [1] Group 4: Financial Outlook - The acquisition is expected to generate licensing revenue in the short term, with a projected increase in adjusted net profit by 6-10% for 2025-2027 [2] - The DCF target price has been raised to HKD 8.0, maintaining a buy rating due to the anticipated contribution from Lixin's rich pipeline [2]