Macroeconomic and Strategy Research - The U.S. job market remains resilient, with initial jobless claims unexpectedly dropping to the lowest level since June, indicating a strong employment situation [2] - The U.S. government has postponed the deadline for "reciprocal tariffs" to August 1, imposing tariffs ranging from 25% to 40% on 14 countries, leading to a stalemate in tariff negotiations with major economies [2][3] - Domestic CPI growth turned positive in June, driven by rising energy prices, while PPI continues to face downward pressure due to weak demand [2][3] Fixed Income Research - The overall interest rates have slightly increased, with the yield curve flattening, influenced by expectations of new real estate policies and regulatory pressures on local banks [4][5] - The central bank has net withdrawn nearly 800 billion yuan in the open market, leading to a slight rise in funding prices, while maintaining a generally loose monetary environment [5][6] - The primary market saw limited supply pressure, with a total issuance of 62 bonds amounting to 621.7 billion yuan, indicating a stable funding environment [5][6] Industry Research - The pharmaceutical and biotechnology sector is experiencing a surge in performance forecasts, with significant announcements such as Merck's $10 billion acquisition of Verona and the approval of new drugs [8][9] - The Shanghai Composite Index rose by 1.40%, with the pharmaceutical sector increasing by 0.88%, indicating positive market sentiment towards the industry [10] - The report suggests focusing on investment opportunities related to innovative drugs and the supply chain, particularly in sectors benefiting from policy optimization and improving overseas demand [10]

Investment Rating - The industry is rated as "Positive" for the next 12 months, indicating an expected increase in performance relative to the CSI 300 index [7][71][82]. Core Insights - The report highlights a concentrated period of semi-annual performance forecasts, suggesting a focus on pipeline realization, performance growth, and business collaborations in innovative drugs and related industry chains [7][70]. - Recent policy adjustments by the National Medical Insurance Administration are expected to catalyze innovation and development within the industry [14]. - Notable acquisitions and drug approvals, such as Merck's $10 billion acquisition of Verona and the approval of new drugs like the Bcl-2 inhibitor by Ascentage Pharma, are significant developments [2][27][14]. Industry Data - As of July 10, 2025, the SW pharmaceutical industry has a TTM price-to-earnings ratio of 28.55, with a valuation premium of 144% compared to the CSI 300 index [5][61]. - The report notes a general upward trend in various sub-sectors, with the medical services sector leading at a 1.56% increase [5][54]. - The report also provides insights into the pricing trends of raw materials, such as vitamins and traditional Chinese medicine, indicating fluctuations and year-on-year changes [15][17]. Company Announcements - Ascentage Pharma's Bcl-2 inhibitor has received conditional approval from the NMPA for treating chronic lymphocytic leukemia [27]. - WuXi AppTec anticipates a revenue increase of approximately 20.64% for the first half of 2025, with a significant net profit growth of about 44.43% [28]. - Gan & Lee Pharmaceuticals expects a net profit increase of 100.73% to 114.12% for the same period [29].