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].