Core Viewpoint - The public fund industry in China is undergoing a significant fee reform, highlighted by the successful early fundraising of the Oriental Red Medical Innovation Mixed Fund (QDII), which is the first floating management fee fund in the medical sector, reflecting investor confidence in the market and the asset management capabilities of Oriental Red [1][2]. Group 1: Fund Performance and Management - The Oriental Red Medical Innovation Mixed Fund (QDII) has gained recognition for its management capabilities, with the fund manager's income linked to investor returns, marking a shift towards prioritizing investor benefits over mere scale [2][4]. - Fund managers Jiang Qi and Gao Yi have extensive backgrounds in the medical and financial sectors, contributing to the fund's strong performance and investor trust [2][3]. - The Oriental Red Medical Upgrade Stock Initiation Fund, managed by Jiang Qi, has shown impressive results, with a net value growth rate of 102.43% over the past year [3]. Group 2: Industry Impact and Future Outlook - The introduction of floating fee structures is expected to have a profound impact across the industry, incentivizing fund managers to enhance their research and risk management capabilities, thereby fostering a culture of long-term value investment [4][5]. - The successful fundraising of the Oriental Red Medical Innovation Mixed Fund (QDII) indicates strong investor confidence in the long-term prospects of the medical industry and the asset management capabilities of Oriental Red [5]. - The collaboration between Oriental Red Asset Management and partners like Pudong Development Bank and Oriental Securities aims to provide long-term investment options and enhance investor engagement, contributing to the high-quality development of the asset management industry [5].

Core Viewpoint - The innovative drug sector is experiencing a significant resurgence in 2025, with a notable performance from funds focused on this area, indicating a shift from previous market pessimism to optimism driven by strong fundamentals [1][2]. Group 1: Fund Performance and Strategy - The Oriental Red Medical Upgrade Stock Fund managed by Jiang Qi achieved a year-to-date return of 82.35% as of August 22, 2025, significantly outperforming its benchmark [1]. - Jiang Qi emphasizes the importance of fundamental changes in the market, asserting that the long-term returns are based on the transformation of fundamentals rather than short-term market fluctuations [1]. - The fund's strategy includes a diversified approach across various pharmaceutical sub-sectors, allowing it to capture upward trends in niche markets [1][6]. Group 2: Market Insights and Future Outlook - Jiang Qi predicts a potential differentiation in the innovative drug market, with capital favoring truly innovative companies in the medium to long term [2]. - The innovative drug sector is characterized by a long-cycle market driven by fundamentals, with several sub-fields such as ADC, dual antibodies, and gene therapy showing promising results [2]. - The year 2024 is seen as a critical turning point for innovative drug companies, with expectations for significant market entries and growth in the coming years [9][10]. Group 3: Investment Philosophy and Methodology - Jiang Qi employs a unique classification system for the pharmaceutical industry, dividing it into 18 sub-industries and further refining high-growth areas based on growth potential and technological innovation [6]. - The investment strategy is guided by two main principles: policy direction and growth rate, focusing on sectors benefiting from national strategic shifts and those with a compound annual growth rate of 20% or more [6]. - Jiang Qi's approach to valuation is tailored to different types of companies, emphasizing the need for appropriate metrics based on the company's stage and market position [8]. Group 4: Regulatory Environment and Industry Dynamics - The introduction of measures to support the high-quality development of innovative drugs is expected to significantly impact the industry, particularly through the establishment of a "commercial insurance innovative drug catalog" [10]. - The current market environment is seen as favorable for innovative drug companies, with expectations for a shift in resources towards those with strong commercialization capabilities [10]. - Jiang Qi remains optimistic about the valuation of many Chinese innovative drug companies, suggesting that their potential for profit in the coming years could be substantial [10].

Core Viewpoint - The innovative drug sector has shown strong performance this year, bringing the pharmaceutical industry back into the spotlight, with a focus on the potential for significant growth in the coming years [1][4]. Group 1: Fund Management and Strategy - The "Oriental Red Medical Innovation Mixed Fund" is managed by experienced professionals, including Jiang Qi, who has a strong background in both buy-side and sell-side research [1]. - Jiang Qi employs a "combination" strategy in the pharmaceutical sector, focusing on growth stocks, undervalued transformation targets, blue-chip stocks, and companies with stable cash flow, adjusting asset allocation based on market conditions [1][5]. Group 2: Performance and Future Outlook - The "Oriental Red Medical Upgrade Stock Initiation Fund" has demonstrated significant excess returns since its inception, with an A-class share net value growth rate of 71.72% compared to a benchmark decline of 6.17% [2]. - Jiang Qi believes that the innovative drug sector is at the beginning of a rapid growth phase, with many companies expected to transition from losses to profitability in the next five years [2][4]. Group 3: Market Dynamics and Investment Opportunities - The innovative drug industry is anticipated to enter a phase of explosive growth, with 2025 seen as a pivotal year for capital market developments [4]. - Despite the strong performance of innovative drugs, the overall market allocation to this sector remains limited, indicating that excess returns are likely to persist [5][6]. Group 4: Long-term Growth and Challenges - The pharmaceutical industry is characterized by its "long slope, thick snow" nature, where new growth points can be identified at any time, driven by technological advancements [7]. - The development of commercial insurance is expected to positively impact the innovative drug sector by allowing for better pricing and extending product life cycles [7]. Group 5: Technological Impact and Market Trends - AI applications in the pharmaceutical industry are primarily focused on drug discovery and development, with the potential for significant long-term benefits [8]. - The performance of innovative drug stocks in the Hong Kong market has outpaced that in the A-share market, largely due to differences in market liquidity rather than company quality [8][9]. Group 6: Investment Philosophy and Patience - Jiang Qi emphasizes the importance of patience in holding investments in innovative drugs, as the sector is expected to undergo substantial changes driven by fundamental developments [10][12]. - The focus should be on identifying companies with solid fundamentals and the potential for global clinical operations, as these will likely yield significant returns in the long run [10][11].