Core Viewpoint - The recent shift in market sentiment towards Hong Kong stocks is driven by two main themes: external macro liquidity turning points and internal industry fundamentals improving, particularly in the innovative pharmaceutical sector [2][4]. Group 1: External Catalysts - The macro liquidity environment is expected to change positively due to the end of the U.S. government shutdown, which will release previously locked liquidity from the TGA account, signaling a shift towards looser liquidity conditions [5][7]. - The anticipated resumption of non-farm employment data is likely to catalyze expectations for interest rate cuts, further improving the dollar liquidity environment [6][7]. - Hong Kong stocks are particularly sensitive to changes in dollar liquidity, making them a leading indicator for capital flows in response to the expected fiscal normalization and interest rate cuts [7][8]. Group 2: Internal Drivers - The innovative pharmaceutical sector in Hong Kong has shown resilience, with a reported revenue growth of 23.34% year-on-year in the first three quarters of 2025, despite pressures from centralized procurement and healthcare cost controls [9]. - Upcoming results from the Medicare negotiations and the first commercial insurance innovative drug price negotiations are expected to provide new growth opportunities for innovative drug companies [9][10]. - The diversification of the payment system, combining Medicare and commercial insurance, is anticipated to alleviate payment pressures and expand market potential for high-value innovative drugs [10]. - The Chinese biotech sector is entering a "2.0 era" of innovation output, with a significant pipeline of new drugs and indications expected to drive future performance [10]. Group 3: Dual Resonance - The convergence of external liquidity improvements and strong internal fundamentals positions the Hong Kong innovative pharmaceutical sector as a focal point for recovery [11]. - The sector's high sensitivity to financing conditions means that any easing of liquidity will likely lead to rapid valuation recovery [11][12]. - The solid performance metrics and upcoming catalysts provide a robust foundation for sustained growth in the sector, making it an attractive investment opportunity [12][13].