Investment Rating - The report maintains an "Outperform" rating for the Hong Kong stock market [4] Core Insights - The Hong Kong stock market has shown strong performance with the Hang Seng Index rising by 2.8% and the Hang Seng Tech Index increasing by 5.5% [1] - The healthcare and internet sectors are leading the market, with significant gains observed in the pharmaceutical sector (+11.9%) and the internet sector (+7.4%) [1][16] - Overall, 27 industries within the Hong Kong Stock Connect experienced an increase, while only 2 industries saw a decline [1] Market Performance - The Hang Seng Index closed at 24,826, reflecting a 2.8% increase for the week and a 26.8% increase year-to-date [12] - The Hang Seng Tech Index also performed well, increasing by 5.5% for the week and 56.6% year-to-date [12] - The small-cap stocks outperformed large-cap stocks, with the Hang Seng Small Cap Index rising by 3.6% compared to 3.3% for large-cap stocks [1] Fund Flow Analysis - The average daily fund inflow was +14.1 million HKD, with the pharmaceutical sector benefiting the most, attracting +4.8 million HKD per day [2] - A total of 24 industries saw fund inflows, while 6 industries experienced outflows, with the pharmaceutical, computer, and retail sectors leading in inflows [2] Earnings Forecast - The overall EPS forecast for the Hong Kong Stock Connect was revised upward by 0.2%, with the steel industry showing a notable increase of +12.6% [3] - 20 industries had their EPS forecasts revised upward, while 7 industries saw downward revisions [3] Sector Performance - The pharmaceutical sector led the industry performance with a weekly increase of 11.9%, followed by the comprehensive sector (+8.0%) and the computer sector (+7.9%) [16] - The real estate and construction materials sectors were the weakest performers, with declines of -0.2% and -0.8%, respectively [1][16]

Group 1 - The core viewpoint of the article highlights the explosive growth of the Hong Kong stock market in terms of equity financing, with a significant increase in both IPOs and refinancing activities in 2025 [1][2][5] - The total equity financing scale in the Hong Kong market has reached 2879.82 billion HKD in 2025, marking a 350.56% year-on-year increase [1][5] - The IPO market has seen 42 IPOs in the first half of the year, raising over 1070 billion HKD, which is approximately 22% more than the total amount raised in the previous year [2] Group 2 - The article notes that the financing scale in the Hong Kong market has reached new highs, driven by significant contributions from leading companies [3][6] - Major IPO projects include companies like CATL, which raised 410 billion HKD, accounting for over 30% of the total IPO fundraising in 2025 [7] - In refinancing, leading companies such as BYD and Xiaomi have raised over 400 billion HKD each, together accounting for more than 50% of the total refinancing amount [7] Group 3 - The article identifies a trend where thriving industries are actively seeking capital, particularly in sectors like technology hardware, capital goods, and automotive components [8][9] - The "technology + consumption" dual-driven characteristic is evident in the current equity financing landscape, focusing on emerging consumer sectors and advanced technology fields [11] - The competitive landscape and pressures from international markets are prompting these industries to accumulate more capital through the stock market [12]

Core Insights - The Hong Kong stock market has seen a significant surge in equity financing this year, with total financing reaching 2879.82 billion HKD, a year-on-year increase of 350.56% [1][2] - The IPO market has been particularly strong, with 42 IPOs completed in the first half of the year, raising over 1070 billion HKD, which is approximately 22% more than the total for the previous year, making it the largest globally [1][2] Financing Scale - In 2023 and 2024, the Hong Kong market experienced relatively weak financing, with IPOs raising 463.34 billion HKD and 881.47 billion HKD respectively, both under 1 billion HKD [2] - Since the second half of 2024, the market has become active again due to several key policies, with 2025 seeing a total equity financing of 2879.82 billion HKD, surpassing the total for 2023 and 2024 combined [2] - The rapid growth in financing is attributed to a significant increase in placement issuance, which has reached 1569.85 billion HKD in 2025, exceeding the combined total of 1206 billion HKD from 2023 and 2024 [2] Leading Companies Driving Growth - Major companies have played a crucial role in boosting the equity financing scale, with three companies in the top 10 IPO projects raising over 100 billion HKD each, including Ningde Times at 410 billion HKD [3] - The top 10 fundraising projects include seven A-share companies, indicating strong participation from A+H companies in the IPO market [3] - In the top 10 refinancing projects, BYD and Xiaomi have raised over 400 billion HKD each, accounting for more than 50% of the total refinancing amount in 2025 [3][4] Industry Trends - A notable trend in the Hong Kong financing landscape is the urgent need for capital in thriving industries, particularly in technology hardware, capital goods, and automotive sectors [5] - The financing activities are heavily driven by emerging sectors such as new energy, artificial intelligence, and biomedicine, reflecting a dual focus on technology and consumer markets [5][6] - These industries are facing intense competition and pressures to expand internationally, prompting a strategic move to accumulate more capital through the market [6]

Market Overview - US stock index futures are all up, with Dow futures rising by 0.29%, S&P 500 futures up by 0.22%, and Nasdaq futures increasing by 0.20% [1] - European indices also show positive movement, with Germany's DAX up by 1.18%, UK's FTSE 100 up by 0.24%, France's CAC 40 up by 1.24%, and the Euro Stoxx 50 up by 1.09% [1] - WTI crude oil is up by 0.20%, priced at $68.47 per barrel, while Brent crude oil is up by 0.16%, priced at $70.26 per barrel [1] Corporate Insights - Bank of America has raised its S&P 500 year-end target from 5600 to 6300, with a 12-month target of 6600, citing strong corporate resilience despite economic challenges [2] - Goldman Sachs suggests the Federal Reserve may lower interest rates in September, three months earlier than previously expected, due to moderate inflation and a cooling job market [2] - The Mannheim used car value index has seen a significant increase, with a 1.6% month-over-month rise and a 6.3% year-over-year increase, attributed to tariffs affecting new car sales [3] - Apple is undergoing a major management change as COO Jeff Williams retires, with Sabih Khan set to take over amid challenges such as tariff costs and slowing iPhone growth [6] - Google is focusing its AI investments on infrastructure, with a commitment of approximately $75 billion for data center development [7] - Starbucks' China business is attracting bids with a valuation of up to $10 billion, with several private equity firms interested in acquiring stakes [8] - WPP has issued a profit warning, lowering its 2025 revenue forecast by 3% to 5% due to client losses, including a significant contract with Mars worth $1.7 billion [9] - Merck is nearing a $10 billion acquisition of Verona Pharmaceuticals, focusing on respiratory drug development [10]

Investment Rating - The report maintains a "Buy" rating for Innovent Biologics [12]. Core Insights - The first-generation immune checkpoint inhibitors (IO therapies) are facing patent expirations between 2028 and 2032, creating a significant demand for second-generation IO therapies, which are projected to have a market size of approximately $200 billion [4][7]. - The first-generation PD-1 inhibitors, represented by Keytruda (pembrolizumab) and Opdivo (nivolumab), achieved global sales of $46 billion in 2023, with an expected increase to $52.5 billion in 2024, reflecting a year-on-year growth of 18% [7][20]. - IBI363, developed by Innovent Biologics, demonstrates Best-in-Class potential through its unique PD-1 monoclonal antibody/IL-2 fusion design, showing promising results in treating both hot and cold tumors [9][68]. Summary by Sections Second-Generation IO Therapies - The second-generation IO market is categorized into three segments: replacement of first-generation IO, addressing resistance in first-generation IO, and targeting cold tumors, with a total potential market size estimated at $200 billion [7][49]. - The report highlights the urgency for multinational corporations (MNCs) to secure their positions in the next-generation cornerstone cancer therapies as first-generation patents expire [4][7]. IBI363 Molecular Design - IBI363 employs a unique PD-1 monoclonal antibody and IL-2 fusion design, achieving dual activation of effector T cells by "releasing the brake" and "pressing the accelerator" [8][56]. - The drug features a globally innovative α-biased IL-2 design, which reduces peripheral toxicity while enhancing therapeutic efficacy [57][62]. Clinical Performance of IBI363 - IBI363 has shown significant clinical benefits in various tumor types, including melanoma, colorectal cancer, and non-small cell lung cancer (NSCLC), with promising long-term overall survival (OS) trends [9][68]. - In clinical trials, IBI363 demonstrated a confirmed objective response rate (ORR) of 36.7% and a disease control rate (DCR) of 90% in squamous NSCLC patients, with a median progression-free survival (mPFS) of 9.3 months [69].

Investment Rating - The report maintains an "Outperform" rating for the Hong Kong stock market [4] Core Views - The market is experiencing high volatility with significant sector differentiation, particularly with innovative drugs performing strongly while the automotive sector has seen notable declines [1][2] - Overall, the Hang Seng Index increased by 0.4%, while the Hang Seng Technology Index decreased by 0.9% [1] - The report highlights that 19 industries within the Hong Kong Stock Connect saw gains, while 11 experienced losses, with the most significant increases in the comprehensive, pharmaceutical, and defense sectors [1] Summary by Sections Market Performance - The Hang Seng Index closed at 23,893, reflecting a weekly increase of 0.4% and a year-to-date increase of 19.1% [12] - The small-cap stocks outperformed mid and large-cap stocks, with the Hang Seng Small Cap Index rising by 4.5% [1] Fund Flow - There was a significant outflow of funds from the automotive sector, with an average daily outflow of HKD 17.7 billion, while the pharmaceutical sector saw an inflow of HKD 4.8 billion [2] - The overall average daily fund intensity for Hong Kong Stock Connect components was -8.0 billion HKD, indicating a shift from the previous week’s positive inflow [2] Earnings Forecast - The report indicates a substantial upward revision in earnings per share (EPS) expectations, particularly for the automotive sector, which saw a 24.3% increase [3] - In total, 26 industries had their EPS forecasts revised upward, while only 3 experienced downward revisions [3] Sector Performance - The comprehensive sector led with a 19.2% increase, followed by pharmaceuticals at 8.5% and defense at 8.1% [16] - The automotive sector, however, faced a decline of 4.4%, reflecting ongoing challenges within the industry [16]

Investment Rating - The report maintains a "Positive" investment rating for the industry [8]. Core Insights - IL-25 is identified as a novel target in the Type II inflammation pathway, showing upregulation in atopic dermatitis (AD), psoriasis, and contact dermatitis, indicating its involvement in the progression of these skin inflammatory diseases [2][5][27]. - The drug SM17, developed by Chinese Antibody, is a first-in-class (FIC) IL-17RB monoclonal antibody targeting IL-25, demonstrating promising proof-of-concept (PoC) data in Phase Ib trials for atopic dermatitis, with superior itch relief compared to existing therapies [6][35][42]. Summary by Sections IL-25 as a Target - IL-25, a member of the IL-17 cytokine family, plays a crucial role in host defense and inflammatory diseases, inducing the production of IL-4, IL-5, and IL-13, while inhibiting Th17 differentiation [5][17]. - The upregulation of IL-25 in various skin inflammatory diseases suggests its potential for multi-indication exploration [27]. SM17 Clinical Data - In the Phase Ib trial, 75% of patients in the high-dose group achieved at least a 75% improvement in the Eczema Area and Severity Index (EASI-75) by week 12, compared to 0% in the placebo group, indicating a significant difference of 75% [6][35]. - The high-dose group also showed that 91.7% of patients had a significant reduction in the Peak Pruritus Numeric Rating Scale (PP-NRS) score, with no responders in the placebo group [7][38]. - SM17 demonstrated rapid and deep itch relief, outperforming existing AD therapies while maintaining comparable skin lesion improvement [41][43]. Competitive Landscape - Currently, only two IL-25-targeting candidates, SM17 and XKH001, are in clinical development, indicating a relatively early stage of research for this target compared to more established pathways like IL-17 and IL-4 [6][33]. - The competitive landscape for IL-25 and IL-17RB-targeting drugs is evolving, with several candidates in various stages of development [34].

M&A Dynamics - From June 3 to June 8, there were 63 merger and acquisition (M&A) events involving listed companies, with 16 classified as significant M&A events[9] - Out of the total M&A events, 9 were completed, including 1 significant M&A[9] Policy Updates - The People's Bank of China emphasized the need to optimize systems for listings, M&A, and equity incentives based on technological innovation characteristics[7] - The Shanghai Stock Exchange plans to encourage listed companies to increase dividend payouts and enhance market value management tools[7] Major M&A Events - Notable M&A transactions included Baota Industrial acquiring 100% of Electric Power Investment New Energy for CNY 80,927,000[13] - A total of 4 M&A events involved state-owned enterprises as acquirers during the reporting period[13] M&A Failures - There were 3 failed M&A attempts, including a significant transaction by Guangdong Hongyuan due to a lack of consensus on the final transaction plan[15][17] - The failed transactions involved a total value of CNY 19,800,000 for one of the deals[17] Control Changes - Three companies reported changes in actual control, including Jinzi Ham and Diou Home, with the changes occurring between May 30 and June 5, 2025[19] Market Performance - The restructuring index underperformed the Wind All A index by -0.12% during the reporting period[21] - Over a mid-term view, the restructuring index showed fluctuations within a positive range compared to the Wind All A index[21] Risk Factors - Economic recovery in China is slower than expected, which may increase market uncertainty[26] - Geopolitical risks and uncertainties regarding U.S. policies towards China could negatively impact A-share liquidity[26]

Investment Rating - The report maintains an "Outperform" rating for the Hong Kong stock market [4] Core Insights - The Hong Kong stock market has shown a positive trend with the Hang Seng Index and Hang Seng Tech both increasing by 2.2% this week, indicating a strong performance in the innovation drug and internet sectors [1][12] - There has been a significant inflow of funds into Hong Kong stocks, particularly in the media and pharmaceutical sectors, with an average daily fund strength of +7.4 million HKD, a notable increase from the previous week [2] - Earnings per share (EPS) expectations for the Hong Kong stock market have been revised upward by 0.3%, with the electronics sector leading the revisions [3] Summary by Sections Market Performance - The Hang Seng Index closed at 23,793, reflecting a weekly increase of 2.2% and a year-to-date increase of 18.6% [12] - The performance of various sectors shows that the innovation drug sector rose by 6.1%, while the internet sector increased by 3.5% [1] Fund Flow Analysis - A total of 23 sectors experienced fund inflows, with media and pharmaceuticals seeing the highest inflows of +1.9 million HKD and +1.4 million HKD per day, respectively [2] - The sectors that faced outflows included transportation and home appliances, each with a daily outflow of -0.1 million HKD [2] Earnings Forecast - The overall EPS forecast for the Hong Kong stock market has been adjusted upward by 0.3%, with the electronics sector seeing a 1.1% increase in EPS expectations [3] - The steel sector, however, faced a significant downward revision of -7.7% in EPS expectations [3]

Market Overview - The US stock market experienced declines ahead of the Memorial Day holiday, with the Dow Jones falling 256 points or 0.61% to close at 41,603 points, marking four consecutive days of losses[10] - European markets also weakened, with the Stoxx 600 index dropping 0.93% due to renewed trade tensions following Trump's tariff threats against the EU[10] Currency and Commodities - The US dollar index decreased by 0.8%, reflecting an 8.6% decline year-to-date, while gold prices rose by 2.1% to $3,394.50 per ounce amid increased safe-haven demand[27][28] - Oil prices saw a slight increase, with NY crude oil rising 0.5% to $61.53 per barrel, as market confidence in a potential US-Iran nuclear deal weakened[28] Fixed Income - US Treasury yields fell significantly, with the 10-year yield dropping to 4.51%, a decrease of 1.8 basis points, as investors sought safety amid escalating trade tensions[32] - Asian investment-grade bonds remained strong, with Chinese investment-grade bond spreads narrowing by 2-5 basis points, driven by demand from major companies like Alibaba and Tencent[32] Sector Performance - In the Chinese A-share market, the Shanghai Composite Index fell 0.94% to 3,348 points, with over 4,200 stocks declining, while the healthcare sector showed resilience[16] - The Hong Kong market displayed mixed results, with the Hang Seng Index rising 0.24% and healthcare stocks leading gains, while technology stocks faced pressure[12] Key Corporate Developments - Trump's threats of a 50% tariff on EU imports and pressure on Apple to shift production to the US contributed to market volatility, impacting major tech stocks like Apple, which fell 3.02%[10][12] - Xpeng Motors' new MONA series is expected to significantly boost sales, with projections of 600,000 units contributing to a 10% market share in the 100,000-150,000 RMB price range[8]