Group 1 - The current trend of Chinese innovative drugs "going global" is positive, with many companies leveraging their R&D capabilities to explore international markets, leading to a significant increase in BD transactions, which have surpassed $100 billion by October 2023, exceeding the total for 2024 [1] - The capital market plays a crucial role in supporting the globalization of Chinese innovative drug companies, with 12 biotech IPOs completed in Hong Kong this year, raising a total of $1.3 billion, and refinancing activities reaching $4.1 billion [1] - The listing of the antibody-drug conjugate (ADC) company, InnoCare Pharma, on the Hong Kong Stock Exchange marks a significant milestone, with over $6 billion in business development results, focusing on cancer and autoimmune diseases [1] Group 2 - Several A-share innovative drug companies are seeking listings in Hong Kong, indicating a sustained trend of "A+H" listings, with InnoCare Pharma announcing plans for an A-share listing on the Shanghai Stock Exchange [2] - The founder and CEO of InnoCare Pharma, Zhu Zhongyuan, emphasizes that the biotech industry is accelerating, with the gap between China and the U.S. in biotechnology significantly narrowing, leading to the emergence of excellent biotech companies in China [2] - Innovative technologies such as Payload, Platform, CAR-T, and next-generation TCE are expected to gradually materialize, attracting more investment as Chinese biotech companies are well-positioned for future developments [2]

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical industry [7] Core Insights - The pharmaceutical sector has shown resilience with a 1.2% increase in the CITIC Pharmaceutical Index, outperforming the CSI 300 Index by 1.6 percentage points during the week of October 27-31, 2025 [3][54] - The overall revenue growth for the pharmaceutical sector in Q1-Q3 2025 was -2%, with a net profit decline of -1%. However, Q3 2025 showed signs of improvement with a 0% revenue growth and a -3% net profit growth compared to Q2 2025 [4][17] - The report highlights that the innovation drug sector and related industries are expected to continue their upward trajectory, driven by strong performance in Q3 and upcoming catalysts such as major conferences and policy changes [5][25] Summary by Sections 1. Weekly Market Review - The CITIC Pharmaceutical Index increased by 1.2% during the week, ranking 13th among CITIC's primary industry classifications [3][54] - The top-performing stocks included HeFu China (+49.0%), NuoSiGe (+36.7%), and SanSheng GuoJian (+33.1%) [70] 2. Q3 Performance Overview - The pharmaceutical sector's overall revenue growth for Q3 2025 was 0%, with the highest revenue growth seen in Bio-Tech, Bio-Pharma, and home-use devices [4][17] - The net profit growth for Q3 was -3%, with Bio-Pharma, CXO, and upstream sectors showing the best performance [4][17] 3. Investment Recommendations - The report suggests focusing on high-quality innovative drug leaders and the CXO sector, which have shown strong performance and are expected to continue to do so [5][25] - Recommended stocks for the upcoming month include SanSheng Pharmaceutical, Xinda Biologics, and Kangfang Biologics [5][25] 4. Subsector Analysis - **Bio-Pharma/Biotech**: Significant growth in Q3 with multiple innovative drugs approved, expected to continue in Q4 and 2026 [25] - **Pharma**: Facing challenges but potential for recovery with upcoming policy changes [26] - **CXO**: Strong performance with a 10% revenue increase and 51% net profit growth in Q3, expected to benefit from macroeconomic improvements [31] - **Upstream**: Revenue of 4.4 billion yuan in Q3, showing a 13.1% year-on-year growth, with positive outlook for Q4 and 2026 [30]

Core Viewpoint - The A-share market experienced fluctuations this week, with small-cap stocks performing relatively well while the STAR 50 index saw a decline of 3.19% for the week. The AI hardware sector faced significant adjustments, indicating a potential shift in market leadership towards AI applications as November begins [1][2]. Market Performance - The AI hardware sector's sharp decline on Friday was unexpected for many investors, marking a notable day of losses for the leading sector of the current bull market [1][2]. - Historical trends suggest that the last few days of the third-quarter earnings report period often lead to market adjustments and significant volatility in leading sectors [2]. Sector Analysis - Some core stocks in the AI hardware sector did not meet investor expectations, particularly in the case of CPO [2]. - Despite the recent downturn, the overall impact on the market is expected to be short-term, with mid-term performance dependent on other sectors [2]. November Outlook - The Shanghai Composite Index has broken out of its previous trading range, indicating a potential upward trend in early November [2]. - Historical data from 2019 to 2024 shows that five out of six years experienced a rebound at the beginning of November, with only one instance of a minor decline of 1.55% [4]. Support Levels - The market is expected to find support around 3930 points, with two key support levels identified: the high point of 3936 from October 9 and the gap from October 24 [4][5]. AI Hardware Sector Sentiment - The current sentiment in the AI hardware sector is negative, with reports indicating that institutional investors' technology positions have surpassed 40% and warnings about potential overvaluation in the TMT sector [6][7]. - The lack of strong performance from core stocks, such as Nvidia's $5 trillion market cap not boosting A-share AI hardware stocks, has contributed to the sector's decline [6]. AI Applications Sector - In contrast to the AI hardware sector, the AI applications sector (including media, entertainment, and software services) has begun to show strength, suggesting that market funds are still focused on AI as a primary theme [9]. - Key stocks like Kingsoft Office and 360 have performed well, serving as indicators for the potential of a sustained rally in the AI applications sector [9][10]. Year-End Market Characteristics - Historically, entering November often leads to a period of performance vacuum in the market, with active funds seeking to create speculative stocks [11]. - Potential themes for speculative stocks include zodiac-related concepts, Hainan free trade zone topics, and emerging hotspots [12]. Pharmaceutical and Liquor Sectors - The pharmaceutical sector, particularly innovative drugs, may be more appealing to market funds compared to liquor, especially following recent U.S.-China trade discussions [15]. - The innovative drug sector index has recently broken through a month-long consolidation, which could boost confidence in the sector [16].

Investment Focus - The report emphasizes that market volatility is expected to persist until the outcomes of China-U.S. negotiations become clear, suggesting investors should buy on dips. However, a rally occurred before the leaders' meeting, leading to profit-taking adjustments afterward. The pullback is viewed as a technical correction with limited downside, representing a staged opportunity for accumulation during weakness [1][8]. Market Trends - Recent closures of private funds managed by prominent asset managers indicate that bubbles have formed in certain popular sectors, making it difficult to find stocks with long-term return potential. This suggests a need for time to digest previous gains before new investment opportunities arise. The report highlights that more certain allocation opportunities are found in large-cap blue-chip stocks that have lagged in performance [2][9]. Policy and Regulatory Environment - The upcoming Five-Year Plan emphasizes the development of a stronger financial system and the role of capital markets in supporting technological innovation. Key policy priorities include enhancing direct financing, expanding market structures, and increasing support for technology-driven companies in IPOs and M&A. Additionally, new guidelines for public mutual fund performance benchmarks aim to standardize practices and improve investor protection [3][10]. Capital Rotation and Trading Activity - A shift in capital has been observed, with small- and mid-cap stocks outperforming large caps due to corrections in technology leaders and high-dividend blue chips. Trading volumes in A-shares and Hong Kong equities have rebounded, indicating a shift in market focus towards policy expectations. Notably, A-share turnover increased from RMB 1.8 trillion to RMB 2.3 trillion, while Hong Kong turnover rose to HKD 280 billion [4][11]. Sector Analysis - The manufacturing PMI for October fell to 49, indicating weakening production and export demand. As the economy softens, the market is expected to focus on policy signals from the December economic meeting, particularly regarding demand-side stimulus. The report continues to favor large-cap blue chips, especially those benefiting from domestic demand policies. Within the financial sector, insurance stocks have performed well, while brokerages are suggested for attention due to their earnings leverage [5][13]. Technology Sector Insights - The report notes that the recent correction in the technology sector may provide a second entry window for investors, particularly in Hong Kong tech stocks. If the weakness continues, it is recommended to focus on subsectors with smaller prior rebounds that align with the upcoming Five-Year Plan, such as domestic computing infrastructure, to capture tactical recovery opportunities [15].

Core Viewpoint - The emergence of DeepSeek in 2025 is expected to trigger a revaluation of Chinese assets, particularly in the Hong Kong stock market, which is anticipated to continue its upward trend into 2026 due to multiple favorable factors including the ongoing AI wave and the full implementation of China's 14th Five-Year Plan [1] Group 1: Valuation Potential - The current valuation of the Hong Kong stock market is not high, especially in the technology sector, providing ample room for upward adjustment [1][2] - As of October 23, 2025, the Hang Seng Index PE (TTM) is at 11.9 times, and the Hang Seng Tech PE is at 23.3 times, both indicating low valuation compared to global indices [2] - The valuation of Hong Kong stocks is significantly lower than that of major global indices, suggesting a strong potential for recovery [2] Group 2: Industry Attractiveness - The technology sector in Hong Kong shows higher valuation attractiveness compared to A-shares, with lower PE and PB historical percentiles [3] - The majority of Hong Kong industries have lower valuation percentiles compared to their U.S. counterparts, particularly in real estate, utilities, and consumer sectors [3] Group 3: Capital Inflow - The Hong Kong market is expected to see a significant inflow of capital, with predictions of over 1.5 trillion yuan from southbound funds in 2026 [12][21] - External capital outflows have stabilized, and there are signs of potential foreign capital inflow back into Hong Kong stocks, driven by a low allocation of foreign capital to Chinese equities [12][13] - Domestic institutional investors are increasingly gaining pricing power in the Hong Kong market, with substantial inflows from public funds and insurance capital expected [21][22] Group 4: Scarcity of Quality Assets - The scarcity of quality assets in the Hong Kong market is a key driver for the ongoing bull market, with significant interest in sectors like technology, new consumption, and innovative pharmaceuticals [29][30] - The current economic environment is pushing domestic funds towards scarce assets, particularly in the context of a transitioning economy [32][34] Group 5: Focus on Technology - The technology sector is expected to be the main focus in 2026, driven by advancements in AI and supportive government policies [41][42] - The valuation of Hong Kong technology stocks is attractive, and they are likely to attract both domestic and foreign capital due to their growth potential [43] - The innovative pharmaceutical sector is also gaining traction, with significant advancements in drug development and commercialization expected to drive performance [47][48]

Market Overview - A-shares experienced a rally followed by a pullback, with the Shanghai Composite Index breaking through 4000 points for the first time in 10 years before adjusting [1] - Daily trading volume exceeded 2 trillion yuan, with weekly trading volume surpassing 10 trillion yuan [1] - Margin trading saw significant increases, with over 41.3 billion yuan added, bringing the total margin balance to a historical high of 2.48 trillion yuan [1] Sector Performance - The electronics sector received over 9 billion yuan in net financing, while power equipment and communications sectors saw net inflows of over 6.3 billion yuan and 5 billion yuan, respectively [1] - Major inflows were noted in the power equipment sector, with over 49.5 billion yuan in net inflows from institutional investors, while the electronics sector experienced a net outflow of over 16.2 billion yuan [1] - The forestry sector surged, with the index rising over 48% to reach a 6.5-year high, driven by the publication of the "15th Five-Year Plan" [2] Policy Impact - The "15th Five-Year Plan" emphasizes green development, aiming for carbon neutrality and ecological safety, which has positively influenced market sentiment [2] - The new energy sector saw a broad rally, with various sub-sectors like energy storage and hydrogen energy reaching historical highs [2] - Key sectors highlighted for investment include communication infrastructure, semiconductor manufacturing, and industrial software, driven by policy support [3]

Market Overview - The A-share market is experiencing a high-level adjustment, with the Shanghai Composite Index closing at 3954.79 points, down 0.81%, and the Shenzhen Component Index at 13378.21 points, down 1.14% [2] - The total trading volume in the Shanghai and Shenzhen markets was 231.78 billion yuan, a decrease of approximately 100 billion yuan compared to the previous trading day [2] North Exchange Performance - The North Exchange 50 Index rose by 1.89% yesterday and has accumulated a 7.52% increase this week, significantly outperforming the major indices in the Shanghai and Shenzhen markets [2][6] - Notable stocks in the North Exchange include Fujida, which increased by 39.40% this week, and other companies like Better Battery and Tianma New Materials, which rose over 20% [6] - A total of 27 companies listed on the North Exchange reported revenues exceeding 1 billion yuan in the first three quarters, indicating strong performance across both established and emerging firms [6] Innovation Drug Sector - The innovation drug sector in A-shares saw a collective recovery, with companies like Sanofi and Shuyou Shen reaching a 20% limit-up, and others like Kangzhi Pharmaceutical and Zexin Pharmaceutical rising over 15% [3] - The Shenwan Pharmaceutical and Biological Index increased by 2.42%, leading all industry sectors [3] - According to CITIC Securities, government policies have been supportive of the development of innovative drugs and medical devices, focusing on research support, commercial health insurance directories, price formation mechanisms, and application support [3] AI Sector Dynamics - The AI sector showed significant internal differentiation, with hardware directions like AI servers experiencing declines, while downstream application sectors, particularly cultural media, saw substantial gains [4] - Institutional investors' positions in technology stocks reached 40.16% by the end of the third quarter, indicating a high level of investment in this sector [4] - The potential for a significant style shift in the market is increasing, as the current high level of institutional holdings in technology stocks may lead to changes in investment strategies [4] TMT Sector Insights - The TMT sector has grown to encompass over 1,000 companies, with a free float market capitalization exceeding 25%, allowing for increased capital inflow [5] - The next five years are expected to be crucial for advancing towards a technology-driven economy, potentially solidifying market consensus on technology growth trends [5] Future Outlook for North Exchange - The North Exchange is expected to maintain high trading activity and market attention due to steady new stock issuances and more merger and acquisition projects [7]

10月的最后一个交易日，A股继续回调。 在科技股的领跌下，双创指数跌幅较大。与此同时，市场资金转向创新药等领域。整体来看，市场呈现出指数跌多、 个股涨多的态势，共计3760只个股飘红。 受访人士表示，本周市场走出"先扬后抑"的行情，这是典型的预期兑现后的回落表现。在短期技术压力以及四季度机 构兑现盈利需求的双重影响下，科创方向等热门赛道大幅回调。接下来的两个月，市场将进入"业绩真空期"，市场风 格可能会转换为"弱现实、强预期"，投资者可关注机器人等板块。 科技股集体重挫 今日A股全天走低，沪指收跌0.81%报3954.79点，创业板指收跌2.31%报3187.53点，深证成指、沪深300、上证50跌幅 均超过1%，科创50更是跌逾3%，北证50逆市涨近2%。 近两日市场均呈现"放量回落"的态势。从交易量能来看，今日市场成交额为2.35万亿元，较昨日的2.46万亿元略有减 少。在杠杆资金方面，热度依然较高。截至10月30日，沪深京两融余额约为2.5万亿元。 | | 东财概念指数 | | | 东财行业指数 | | | | A股市场核心指数 | | | | --- | --- | --- | --- | --- | ...

Group 1: Innovation Drug ETFs Performance - On October 31, innovation drug-themed ETFs collectively surged, with the top ten ETFs all being innovation drug-themed, each rising over 5% [1][2] - The top performers included the Science and Technology Innovation Drug ETFs from Huatai and Guotai, both exceeding 7% gains [2][3] - The Hong Kong Stock Connect Innovation Drug ETFs also showed strong performance, with gains over 5% [2][3] Group 2: Market Activity and Trends - On October 31, 11 ETFs had trading volumes exceeding 10 billion yuan, including several bond ETFs and cross-border ETFs like the Hong Kong Stock Connect Innovation Drug ETF [1][6] - On October 30, several industry ETFs, including securities, Hong Kong innovation drug, and medical ETFs, saw significant net inflows [8][9] - The previous trading day, broad-based ETFs experienced substantial net inflows, with those tracking the CSI 500 seeing over 1.1 billion yuan [8][9] Group 3: Decline in Communication Equipment ETFs - On October 31, communication equipment ETFs and communication ETFs led the decline, both dropping over 5% [4][5] - Specific ETFs such as the 5GETF and semiconductor equipment ETFs also experienced declines exceeding 4% [4][5] Group 4: Investment Opportunities in Innovation Drugs - The investment outlook for innovation drugs remains positive, with potential catalysts in the fourth quarter that could reactivate market sentiment [10] - The biotech sector in China is positioned as a key choice for multinational pharmaceutical companies due to its engineering talent and cost advantages [10] - The trend of domestic brands expanding internationally, particularly in sectors like automotive and innovation drugs, is expected to open up further market opportunities [10]

Core Insights - The article highlights a significant resurgence in IPO activity in both the Shanghai Stock Exchange's Sci-Tech Innovation Board and the Hong Kong Stock Exchange, with a total of seven companies going public on the same day, marking a long-awaited exit opportunity for investors [3][4][12]. Group 1: IPO Highlights - On October 28, three companies listed on the Sci-Tech Innovation Board: Xian Yicai, Heyuan Bio, and Bibet, with opening gains of 361.48%, over 200%, and 175% respectively [3][4]. - In Hong Kong, four companies, including Dipu Technology and Eight Horse Tea, also made their market debuts, with Dipo Technology seeing an opening increase of over 110% [3][5][6]. - The total market capitalization for these companies reached significant figures, with Xian Yicai surpassing 160 billion yuan and Dipo Technology reaching 175 billion HKD [3][4]. Group 2: Company Backgrounds - Xian Yicai, founded by Wang Dongsheng, aims to break foreign monopolies in silicon wafer production and became the first unprofitable company to be accepted under the new listing rules [4][9]. - Heyuan Bio, established by Dr. Yang Daichang, focuses on plant-based recombinant protein technology and was the first company to pass the new listing standards after a lengthy wait [4][10]. - Bibet, a biopharmaceutical firm founded by Qian Changgeng, specializes in innovative drug development for various diseases and has already launched one product [4][10]. - Dipo Technology, founded by Zhao Jiehui, has gained significant attention for its AI and data applications in enterprises, achieving a record subscription rate for its IPO [6][10]. - Eight Horse Tea, originating from a century-old tea family, has expanded to over 3,500 stores and has previously attempted to list on A-shares [6][10]. Group 3: Investment Landscape - The IPOs have attracted a multitude of venture capital and private equity investors, with Xian Yicai having nearly 60 institutional investors and raising over 10 billion yuan [9][10]. - Bibet has also seen substantial backing from various investment firms, including notable names in the industry [9][10]. - Dipo Technology and Eight Horse Tea have secured investments from prominent venture capital firms, indicating strong investor confidence in their business models [10][11]. Group 4: Market Trends - The article notes a significant increase in IPO activity in the A-share market, with a 442.86% year-on-year rise in the number of IPOs in the first nine months of 2025 [12]. - The Hong Kong Stock Exchange has also seen over 60 companies go public in the first three quarters of the year, raising a total of 182.9 billion HKD, positioning it as a leading global market for IPOs [12][13]. - The overall sentiment in the venture capital and private equity community is optimistic, with a strong push to capitalize on the current IPO window [12][13].