Summary of Conference Call Records Industry Overview - The focus is on the **Chinese innovative pharmaceutical industry** and its strategies for 2025, emphasizing a dual approach of "left hand innovation drugs, right hand new technology" [1][2]. Core Insights and Arguments - The **2025 strategy** aims to leverage strong liquidity favoring the technology sector while recognizing the innovative drug sector's potential due to market awareness of industry changes [1][2]. - **Cross-border acquisitions** by multinational pharmaceutical companies, such as Kelun-Biotech and Baillie Gifford, indicate a structural advantage for Chinese innovative drugs, driven by a surge in business development (BD) activities [1][4]. - The **global innovative drug industry** is now driven by new technologies, particularly in oncology, with Chinese companies showing competitive strength in areas like Antibody-Drug Conjugates (ADC) and bispecific antibodies [1][6]. - The transition of the Chinese innovative drug market from a "supermarket" model to becoming a global innovation source supplier is crucial, requiring the replacement of certain U.S. biotech products and subsequent BD transactions for funding [1][7][8]. - The development path for Chinese innovative drugs includes three stages: **business development (BD), clinical trials, and commercialization**, with future expansions into small nucleic acids and other new technology fields [1][10][11]. Market Dynamics - The **2025 market performance** of innovative drugs and new technologies has been volatile, with rapid shifts in various sectors, necessitating a clear understanding of underlying logic to avoid missing investment opportunities [2][3]. - The **recent surge** in the innovative drug sector since February 2025 is attributed to significant BD transactions that have shifted market perceptions and created opportunities [5][6]. - Current market adjustments in the innovative drug sector have led to differing opinions on whether this indicates a peak or a temporary pause, highlighting the need for a higher-level understanding of the industry's evolution [7][9]. Challenges and Opportunities - The Chinese innovative drug market faces challenges, including a lack of major industry catalysts and competition for capital from other sectors like AI [13]. - Anticipated catalysts in the fourth quarter, such as data from major conferences and potential spending by multinational companies, are expected to positively influence market expectations [13][14]. Long-term Outlook - Investors are advised to focus on the long-term value of Chinese innovative drugs beyond immediate BD transactions, as successful clinical trials and market entry will enhance valuations over time [9]. - The industry's evolution is projected to take **5 to 10 years**, with a gradual shift towards replacing global biotech functions and achieving a more significant international presence [11][12]. Additional Insights - The relationship between innovative drugs and new medical technologies is characterized by a cyclical interaction, where advancements in one area can stimulate growth in the other [15].

Core Viewpoint - Hansoh Pharmaceutical reported double-digit growth in revenue and net profit for the first half of 2025, driven by the sales of innovative drugs and collaborative products [2][4]. Financial Performance - The company's revenue for the first half of 2025 was approximately 7.43 billion RMB, representing a year-on-year increase of about 14.3% [3]. - Sales revenue from innovative drugs and collaborative products was around 6.15 billion RMB, up approximately 22.1%, accounting for about 82.7% of total revenue [2][3]. - Net profit for the period was approximately 3.13 billion RMB, reflecting a year-on-year growth of about 15% [3]. Product Performance - The oncology segment contributed the most to revenue, generating approximately 4.53 billion RMB, which is about 60.9% of total revenue [4]. - The company has seven innovative drugs generating sales revenue in China, with key products including the first original third-generation EGFR-TKI inhibitor and a new second-generation TKI for chronic myeloid leukemia [4]. Business Development - Hansoh Pharmaceutical has been actively pursuing business development (BD) opportunities, including licensing agreements with multinational pharmaceutical companies [5][7]. - In June 2025, the company granted exclusive overseas rights for the GLP-1/GIP dual receptor agonist HS-20094 to Regeneron, with a potential total amount exceeding 2 billion USD [5]. - The company has secured high-value BD orders, including a global exclusive licensing agreement with Merck for HS-10535, with a potential total exceeding 2 billion USD [7]. Research and Development - The company is advancing over 70 innovative drug clinical trials across more than 40 projects, with 8 new candidate drugs approved for clinical trials in the first half of 2025 [8]. - R&D expenditure for the first half of 2025 was approximately 1.44 billion RMB, a year-on-year increase of 20.4%, representing 19.4% of total revenue [8]. Market Position - As of August 18, 2025, Hansoh Pharmaceutical's stock closed at 37.06 HKD per share, with a market capitalization of 220.4 billion HKD [9].

Group 1 - Xinda Biologics announced the official launch of its dual receptor agonist, Masitide, for weight management, which is the first GCG/GLP-1 dual receptor agonist approved for long-term weight control in adults in China [1] - Clinical data shows that Masitide can achieve a weight reduction of 21%, over 80% reduction in liver fat content, and significant improvements in cardiovascular and metabolic indicators [1] - The GLP-1 weight loss drug market has seen significant growth, with Novo Nordisk's semaglutide generating $16.5 billion in revenue and Eli Lilly's tirzepatide generating $14.7 billion in the first half of 2025 [1] Group 2 - The trend in GLP-1 weight loss drug development is shifting towards multi-target, long-acting, and oral formulations, with many domestic innovative pharmaceutical companies actively participating [2] - The popularity of GLP-1 drugs has been fueled by endorsements from high-profile individuals, leading to increased public interest and demand for these medications [3] - The market for GLP-1 drugs in China is estimated to be between 40 billion to 50 billion yuan, with significant potential for generic drugs as original patents expire [5] Group 3 - The competitive landscape for GLP-1 weight loss drugs is evolving, with various products entering the market, and companies need to adapt their commercialization strategies to succeed [6][9] - Regulatory requirements for GLP-1 products in China are stringent, necessitating large-scale clinical trials, which poses challenges for many companies [7] - Partnerships and business development (BD) opportunities are emerging as companies seek to expand their market presence internationally, with notable agreements already in place [8]

Summary of Conference Call Notes Industry Overview Steel Industry - The steel sector has experienced two rounds of market fluctuations from November to December last year and from March to April this year, influenced by anti-involution and production cut expectations. However, adjustments occurred at the end of Q2 due to the lack of concrete production cut documents. Future attention is needed on potential production cuts due to declining demand in the northern regions by year-end [1][4] - Environmental investments in the steel industry are significant, with some companies completing ultra-low emission transformations. However, about 20% of companies, mainly small and medium-sized private enterprises, have not met standards, leading to unfair competition. The handling of non-compliant capacity, estimated at around 200 million tons, is a critical future market variable [1][8][10] - Domestic real estate pressures have led to a decline in steel demand, but global emerging market demand is growing, making exports an important direction. It is essential to avoid excessive competition in exports to alleviate domestic demand pressure [1][11] Pharmaceutical Industry - The innovative drug market experienced two phases of growth from late February to late June this year, driven by Hong Kong stock valuation recovery and BD expectations. After July 1, the market quickly returned, with expectations for continued activation of the industry chain, contingent on successful BD implementation [1][13][14] - Key catalysts for the pharmaceutical industry include internationalization through overseas sales growth and product transfer methods. PD-1 and VGF dual antibodies, as well as PD-1 and interleukin combinations, are central themes, with domestic companies actively advancing these areas [1][15][19] - The long-term outlook for the Chinese pharmaceutical industry remains optimistic, driven by high-educated engineers' R&D capabilities, which enhance overseas BD potential [1][18] Key Points and Arguments Steel Industry - The steel sector's profitability remains positive, with high production enthusiasm despite pressures. The likelihood of production cuts may increase as demand in northern regions declines towards year-end [5] - The anti-involution movement is expected to strengthen in the short term, with significant price declines in coking coal and iron ore, which have contributed to steel profitability [6] - Environmental investment costs are substantial, with each ton of steel requiring an investment of 400 to 500 yuan, increasing production costs by 100 to 200 yuan. Non-compliant companies have a cost advantage of 150 to 200 yuan per ton, creating unfair competition [9] Pharmaceutical Industry - Notable companies in the PD-1 iteration include Kangfang and Sanofi, with others like Huahai and Shenzhou Cell also advancing. The interleukin field is progressing rapidly with companies like Aosaikang and Huiyu [16] - Key companies to watch in the innovative drug market include Gree, Innovent, Borui, Hengrui, and Ganli, with promising product data [17] - The current trends in the pharmaceutical industry include sustained long-term growth, the emergence of leading companies, and the realization of internationalization through BD and global commercialization [19] Other Important Insights - The steel industry must focus on the treatment of non-compliant capacity, which could significantly impact market dynamics as the anti-involution movement deepens [10] - The pharmaceutical sector's growth is expected to continue, driven by successful BD implementations and the activation of the entire industry chain [14][19]