Core Viewpoint - The article emphasizes the need for Chinese biopharmaceutical companies to pursue high-quality international expansion and the application of AI in the healthcare sector, highlighting the challenges and opportunities in these areas [2][4]. Group 1: High-Quality International Expansion of Biopharmaceuticals - Chinese biopharmaceutical companies have accelerated their international expansion, with China supplying 30% of the global raw material drug capacity and holding about 30% of the global new drug pipeline [5]. - By 2025, the total value of China's innovative drug licensing transactions is expected to reach $135.6 billion, surpassing the U.S. and making China the largest market for innovative drug licensing [5]. - Challenges include limitations in the current international expansion models, risks of industry chain outflow, and increased international competition, which could threaten the sustainability of domestic innovation [5][6]. - The reliance on licensing deals may lead to premature outflow of core assets and hinder the establishment of a self-sustaining commercialization system [6]. - The outflow of talent and capital poses risks to the integrity of the industry chain, as international firms increasingly attract Chinese talent and companies to establish R&D centers abroad [6]. Group 2: Recommendations for High-Quality International Expansion - Strengthening the domestic market is crucial to create a dual-circulation ecosystem for innovative drugs, enhancing payment systems, and improving the accessibility of innovative drugs [7]. - A national-level strategic safety system for pharmaceutical globalization should be established, coordinating overseas registration, global clinical trials, and intellectual property protection [8]. - The industry should build a globally competitive innovation ecosystem, including international clinical trial platforms and a database for geopolitical and compliance risks [8]. - Companies need to shift from merely selling products to building capabilities, enhancing their global R&D, registration, and commercialization systems [8]. Group 3: Application of AI in Healthcare - AI has permeated various aspects of healthcare, including clinical management, hospital operations, and drug development, but it also faces challenges such as data privacy and algorithm bias [14]. - Recommendations include establishing cross-institutional data-sharing mechanisms, enhancing algorithm transparency, and creating a regulatory framework for AI in healthcare [15][16]. - The importance of maintaining the physician's role in the decision-making process is emphasized, with AI serving as a decision support system rather than a replacement for doctors [18]. Group 4: Future Trends in AI Healthcare - The potential for AI to significantly reduce the time required for drug development and approval processes is highlighted, with expectations for AI to play a major role in the pharmaceutical industry [19].

Policy Direction - The government work report emphasizes strong innovation and benefits for people's livelihoods, highlighting the strategic position of the healthcare sector in the national development plan[6] - The "14 major projects" related to the pharmaceutical industry are included in the 15th Five-Year Plan, with approximately 14 directly involving healthcare and pharmaceutical sectors[9] Industry Focus - The pharmaceutical industry is identified as a new pillar industry, with a focus on biomedicine and brain-computer interfaces, which are included in the national policy support system[7] - The report outlines a commitment to enhancing the quality of innovative drugs and medical devices, aiming for high-quality development in these areas[6] Healthcare System Improvements - The report proposes a 24 CNY increase in per capita financial subsidies for resident health insurance, aiming to improve the multi-tiered healthcare security system[6] - It emphasizes the need for public hospital reforms with a focus on public welfare and the optimization of medical procurement and pricing governance[7] Innovation and Digital Transformation - Industry representatives suggest focusing on digital transformation, innovative drug development, and the modernization of traditional Chinese medicine as key areas for future growth[14] - Recommendations include establishing a data asset management system and enhancing the role of AI in healthcare, particularly in disease prevention and management[14] Risk Considerations - There is uncertainty regarding the specific implementation timelines and progress of the proposed policies, which may be influenced by both domestic and international macroeconomic conditions[18]

Market Overview - The Hong Kong stock market continued to rise last Friday, with the Hang Seng Index and the Hang Seng China Enterprises Index closing at 25,757.29 points and 8,628.13 points, up 1.7% and 2.1% respectively [1] - The total turnover in the Hong Kong market was HKD 292.8 billion, a decrease of 9.0% from HKD 321.9 billion the previous Thursday, indicating a more cautious approach from some investors [1] - The healthcare, consumer discretionary, and consumer staples sectors rose by 3.7%, 2.9%, and 2.8% respectively, while materials fell by 2.1% [1] Company Performance - JD Logistics (2618 HK) and JD Group (9618 HK) led the blue-chip stocks with increases of 23.0% and 10.0% respectively, while China Hongqiao (1378 HK) and Henderson Land (12 HK) saw declines of 3.0% and 2.2% [1] - Weisheng Holdings (3393 HK) announced a positive profit forecast, expecting a year-on-year net profit growth of approximately 42%-50% to RMB 1.0 billion - 1.06 billion for FY25, exceeding previous market consensus [5] Industry Dynamics - The government work report for 2026 emphasizes expanding consumer demand through income increases and enhancing the supply of quality products and services, aiming to alleviate residents' concerns and unlock consumption potential [4] - The automotive sector saw significant gains, with Geely Group's chairman advocating for a qualitative development approach in the new energy vehicle industry, leading Geely Automobile (175 HK) to outperform peers with a 7.9% increase [4] - The pharmaceutical industry experienced a notable rebound, as the government work report identified biomedicine as a "new pillar industry," signaling strong policy support for its accelerated development alongside other key sectors [4]

Core Viewpoint - High-level technological self-reliance and strength is a strategic support for high-quality development, with the "14th Five-Year Plan" emphasizing the importance of technology and innovation [1] Group 1: Technology Talent Cultivation - The cultivation of technology talent is essential for fostering innovation, with the company providing specialized services to support the development of outstanding technology professionals [1] - The company has been a financial partner for the China International College Students Innovation and Entrepreneurship Competition for 11 consecutive years, helping to transform student ideas into marketable projects [2] Group 2: Scientific and Technological Innovation - The company focuses on financial innovation to support scientific and technological research, aiming to produce more excellent research outcomes [7] - A new "E-Innovation" program has been launched to provide comprehensive online support for technology talent, facilitating access to funding and resources for innovation [6] Group 3: Research Results Transformation - The company collaborates with Peking University to create a new ecosystem for incubating and financing technology, enhancing the commercialization of research outcomes [12] - Innovative financial products, such as technology transformation loans, are designed to meet the unique financing needs of technology enterprises [13] Group 4: Technology Industry Development - The company supports the development of technology industries through integrated financial services, focusing on key sectors like semiconductors [15] - A significant amount of funding has been allocated to support leading enterprises in the semiconductor industry, with a total of 62 billion yuan in equity support [15] Group 5: Ecological Operation of Science and Technology - The company has established social security funds to broaden the supply of patient capital, supporting key technological advancements [17] - The launch of technology indices aims to enhance the liquidity and refinancing capabilities of quality listed technology companies [18] Group 6: Commitment to High-Quality Development - The company is committed to promoting high-level technological self-reliance and strengthening new productive forces, aligning with national goals for modernization and development [19]

1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The government work report in 2026 emphasizes "new - quality productivity" and "artificial intelligence +", proposing to build emerging pillar industries and cultivate future industries. It also focuses on AI underlying computing power infrastructure [1][10]. - The overall position of convertible bonds should be maintained with prudent neutrality. It is expected that there will be better allocation opportunities after the equity and convertible bond markets fully digest the high valuations in the second quarter. Attention should be paid to individual bonds with strong conversion demands and conversion capabilities, and high - price and high - premium convertible bonds should be avoided unless the underlying stocks have sufficient short - term elasticity [3][27]. - The convertible bond market declined last week, and the valuations of low - rated and small - scale convertible bonds increased significantly. The market is in the process of digesting high valuations, and the valuations of high - price and newly issued convertible bonds have declined more significantly [25][40]. 3. Summary According to the Table of Contents 3.1 From the Two Sessions, Which Sectors in the Convertible Bond Market Are Worth Paying Attention To? - **Policy Focus**: The Two Sessions' policy orientation shows that emerging expenditure industries and future industries are still the policy focus. The government work report in 2026 emphasizes "new - quality productivity" and "artificial intelligence +", proposing to build emerging pillar industries such as integrated circuits, aerospace, biomedicine, and low - altitude economy, and cultivate future industries such as future energy, quantum technology, embodied intelligence, brain - machine interface, and 6G. It also focuses on AI underlying computing power infrastructure [1][10]. - **Integrated Circuit Sector**: There are many convertible bond targets in the integrated circuit sector, covering the upstream and mid - stream. However, some individual bonds are about to leave the non - call commitment period, and some are about to trigger the call, which may be a disturbing factor [12]. - **Aerospace Sector**: Convertible bond targets in the aerospace sector are concentrated in materials and parts, mainly involving core component manufacturing, complete machine matching, and operation services. The policy of "encouraging central and state - owned enterprises to take the lead in opening up application scenarios" may drive private aerospace entities [14]. - **Biomedical Sector**: The trading in the biomedical sector has cooled down. The conversion premium rate of the pharmaceutical sector is at the 63.70% quantile since 2023, and the trading congestion is relatively low. Attention can be paid to the performance realization of innovative drug - related targets [15]. - **Future Industries**: There are few targets in future industries. Future energy and embodied intelligence - related targets are relatively abundant. The 6G concept includes Ruike Convertible Bond and Hongtu Convertible Bond. Attention can be paid to the progress of convertible bonds in the pre - issuance stage [2][17]. 3.2 Convertible Bond Strategy: Maintain a Prudent and Neutral Position and Shift Elastic Allocation to Balance - **Market Trends**: The trading mainline of the equity market this week is concentrated on geopolitical conflicts and the Two Sessions. Geopolitical conflicts in the Middle East have strengthened the expectation of rising oil and gas prices, and some chemical, energy, and shipping sectors have shown obvious high - volatility rises. The technology - growth sectors that performed well at the beginning of this year have adjusted significantly this week [22]. - **Investment Strategy**: As the impact of geopolitical conflicts reaches a climax, participation in relevant sectors should focus on trading thinking. Although the technology - growth sectors have adjusted in the past two weeks, their long - term logic remains unchanged. Attention should be paid to the performance - realization directions during the performance disclosure period. Overall, the position should be maintained with prudent neutrality, and better allocation opportunities may appear after the second quarter [22][27]. 3.3 Market Review: The Convertible Bond Market Declined Weekly, and Valuations Rose - **Weekly Market Conditions**: Most major stock indexes declined last week. The CSI 300 index fell 1.07%, the CSI 500 fell 3.44%, the CSI 1000 fell 3.64%, the CSI 2000 fell 3.00%, and the CSI Convertible Bond Index fell 2.07%. Small - cap stocks and convertible bonds performed weakly overall. Different concepts showed different performances [36][37]. - **Valuation Performance**: The closing prices of equity - biased, bond - biased, and balanced convertible bonds all declined. The proportion of convertible bonds in the range above 150 decreased significantly. The median price decreased by 1.09%. The premium rates of low - rated and small - scale convertible bonds increased significantly, while the conversion premium rate of convertible bonds in the 120 - 130 (inclusive) parity range decreased by 3.06 percentage points [40]. 3.4 Terms and Supply: Three Convertible Bonds Announced Call, and the Total Newly - Promoted Scale Is Approximately 6.993 Billion - **Terms**: As of March 6, Zhonghuan Zhuan 2, Hengyi, and Anji Convertible Bonds announced early redemption; no convertible bonds announced non - early redemption; Fenggong, Hangxin, Liyang, Baichuan Zhuan 2, and other convertible bonds announced that they were expected to meet the call conditions. Qiaoyin, Hongtu, and Wentai Convertible Bonds proposed downward revision of the conversion price by the board of directors; Bairun Convertible Bond announced the downward revision result; Xianle Convertible Bond announced no downward revision; four convertible bonds announced that they were expected to trigger downward revision [4][56]. - **Primary Market**: Last week, Changgao, Xianghe, and Tonglian Convertible Bonds were issued, with a total scale of 173.5 million yuan, and no convertible bonds were listed. Two companies added board of directors' pre - plans, one company passed the shareholders' meeting, two companies passed the review by the issuance review committee, and no new companies were approved by the CSRC. As of March 6, five listed companies obtained approval for convertible bond issuance, with a planned issuance scale of 3.828 billion yuan; two companies newly passed the review by the issuance review committee, with a total scale of 1.79 billion yuan; two companies newly added board of directors' pre - plans, with a total scale of 1.375 billion yuan [5][59][70].

Investment Rating - The report maintains an "Increase" rating for the pharmaceutical sector [5] Core Insights - The pharmaceutical sector has experienced a decline of 2.78% this week, ranking 17th out of 31 sectors, while it has seen a slight increase of 0.1% year-to-date, ranking 24th out of 31 [9] - The 2026 government work report emphasizes the importance of the biopharmaceutical industry, categorizing it as a "new pillar industry," which indicates a strategic upgrade in its significance for economic growth and industrial upgrading [10][11] - The inclusion of brain-computer interfaces in the government work report marks a significant policy shift, enhancing market focus on related fields such as neural regulation and rehabilitation robotics [11] Company Dynamics - China Biopharmaceutical has entered an exclusive licensing agreement with Sanofi for the innovative drug Roflumilast, potentially earning up to $1.53 billion, including an upfront payment of $135 million [12] - Deking Pharmaceuticals has secured a global exclusive licensing agreement for ATG-201 with UCB, which includes an upfront payment of $80 million and potential milestone payments totaling approximately $1.1 billion [13] - East China Pharmaceutical has received approval to conduct clinical trials for DR30206, a fusion protein targeting multiple pathways for non-small cell lung cancer [14] - Yahui Pharmaceutical has achieved a commercial breakthrough with the approval of APL-1702 for treating cervical intraepithelial neoplasia [15] Investment Focus - The report suggests focusing on the innovative drug supply chain and the brain-computer interface sector as key investment opportunities [4][16]

Investment Rating - The report maintains an "Accumulate" rating for the pharmaceutical sector [5] Core Insights - The pharmaceutical sector has experienced a decline of 2.78% this week, ranking 17th out of 31 sectors, with a year-to-date increase of 0.1%, ranking 24th out of 31 [9] - The 2026 government work report emphasizes the importance of the biopharmaceutical industry, positioning it as a key pillar for economic growth and industrial upgrading, particularly highlighting the innovative drug sector as a core beneficiary [10][11] - The inclusion of brain-computer interfaces in the government work report marks a significant policy shift, elevating the field to a national industrial support framework, which is expected to enhance market focus on related technologies [11] Company Dynamics - China Biopharmaceutical has entered an exclusive licensing agreement with Sanofi for the innovative drug Roflumilast, with potential payments totaling up to $1.53 billion, including an upfront payment of $135 million [12] - Deking Pharmaceuticals has reached a global exclusive licensing agreement with UCB for ATG-201, with an upfront payment of $80 million and potential milestone payments totaling approximately $1.1 billion [13] - East China Pharmaceutical has received approval to conduct clinical trials for DR30206, a targeted therapy for non-small cell lung cancer [14] - Yahui Pharmaceutical has obtained approval for APL-1702, a product aimed at treating cervical intraepithelial neoplasia [15] Suggested Focus Areas - The report suggests focusing on the innovative drug supply chain and the brain-computer interface sector as key investment opportunities [4][16]

Group 1 - The report emphasizes the development of six emerging pillar industries and six future industries, including integrated circuits, aerospace, biomedicine, low-altitude economy, new energy storage, and intelligent robotics [13][16] - The total market value of integrated circuit-related companies on the North Exchange is 81.57 billion yuan, with 19 companies listed [18] - The aerospace and low-altitude economy sectors have a total of 16 related companies, with a combined market value of 79.26 billion yuan [22] Group 2 - The biomedicine sector includes 27 companies with a total market value of 80.00 billion yuan, highlighting the performance of companies like Deyuan Pharmaceutical, which reported a net profit of 236.93 million yuan, a year-on-year increase of 33.87% [28][30][32] - The new energy storage sector consists of 22 companies with a total market value of 105.24 billion yuan, featuring companies like Better Ray, which specializes in lithium battery anode materials [35][36] - The intelligent robotics sector comprises 22 companies with a total market value of 71.25 billion yuan, showcasing companies like Dingzhi Technology, which focuses on servo motors and related products [39]

Group 1 - In 2025, there were 116 new companies listed on A-shares and 119 on Hong Kong stocks, with sectors including AI chips, semiconductor materials, new energy vehicles, chain consumption, and innovative pharmaceuticals [2][3] - The article highlights the increasing presence of female founders and co-founders in these newly listed companies [3] Group 2 - Moore Threads, co-founded by Zhou Yuan, is a notable GPU startup that went public in December 2025 with an initial market value exceeding 300 billion RMB [5][7] - MiniMax, co-founded by Yuan Yeyi, became the fastest AI model company to complete an IPO in January 2026, with a market value of 2230.11 billion RMB [9][10] - Light Health Group, led by Yang Yin, transitioned from a crowdfunding platform to a digital health service provider, achieving a market value of 157.85 billion RMB after its IPO [15][18] - Aixin Yuan Zhi, founded by Qiu Xiaoxin, became the first Chinese edge AI chip company to go public, with a market value of 146.31 billion RMB [20][23] - Baiao Saitou, co-founded by Ni Jian, went public on the STAR Market with a market value of 346.35 billion RMB, focusing on biopharmaceuticals [25][26] - Muxi Co., Ltd., co-founded by Peng Li, is another GPU company that went public in December 2025, with a market value of 2135.41 billion RMB [30][32] - Baoji Pharmaceutical, co-founded by Wang Zheng, achieved a market value of 291.44 billion RMB after its IPO, focusing on gene-engineered drugs [36][38] - Yunji Technology, founded by Zhi Tao, became the first company in the robot service sector to go public, with a market value of 92.79 billion RMB [42][43] - Haibo Shichuang, with Xu Rui as the only female executive, is a leading provider of electrochemical energy storage solutions, listed on the STAR Market [45][46] - Xuan Zhu Biotech, led by Xu Yanjun, focuses on innovative drug development and went public with a market value of 228.60 billion RMB [48][51] Group 3 - The article emphasizes that the presence of women in entrepreneurial and management roles is growing, with many women becoming founders, partners, and core managers in various companies [53] - The narrative celebrates women's contributions to entrepreneurship, suggesting that their impact extends beyond traditional roles [54]

Investment Rating - The industry investment rating is "Positive" and is maintained [11] Core Insights - The financing ecosystem for China's biopharmaceutical industry is gradually entering a positive cycle, driven by the influx of funds from A/H listings and capital increases of innovative drug companies. This is expected to improve the willingness to invest in R&D, leading to a new cycle of prosperity in the innovative drug industry [2][41] - The IPO channels for innovative drugs are widening, with significant fundraising observed. In February 2026, the fundraising amount for H-share pharmaceutical companies reached 3 billion yuan, and the total for January-February 2026 was 3.8 billion yuan, indicating a positive trend [6][30] - The overall fundraising scale for pharmaceutical companies through capital increases is also on an upward trend, with A-share pharmaceutical companies raising 500 million yuan in February 2026, a year-on-year increase of 138% [7][32] - The investment amount in China's biopharmaceutical sector is showing signs of recovery, with a total of 510 million USD in February 2026, a year-on-year increase of 287% [8][35] - The upfront payments from external business development (BD) have become a significant new source of funding for R&D, with February 2026 seeing an amount of 860 million USD, a year-on-year increase of 627% [9][39] Summary by Sections Innovative Drug R&D Investment Climate - The investment climate for innovative drug R&D in China is improving, driven by increased cash flow and a willingness to invest in R&D [23][41] IPO and Fundraising Trends - The IPO market for innovative drugs is experiencing a resurgence, with a notable increase in fundraising amounts for both H-share and A-share pharmaceutical companies [6][30][31] Capital Increase Activities - The trend of capital increases among pharmaceutical companies is positive, with significant year-on-year growth in fundraising amounts [7][32] Biopharmaceutical Investment Recovery - The biopharmaceutical investment amounts are on the rise, indicating a potential recovery in the investment ecosystem [8][35] External BD Payments - External BD upfront payments are emerging as a major funding source for R&D, significantly surpassing traditional investment amounts [9][39]