Core Viewpoint - The pharmaceutical sector is experiencing a strong rally, with the Medical Innovation ETF (516820.SH) rising by 2.02% on August 29, driven by significant gains in constituent stocks such as WuXi AppTec (603259) up 4.74%, Baillie Gifford (688506) up 4.23%, and Heng Rui Medicine (600276) up 4.11% [1] Fund Flows - The Medical Innovation ETF has seen continuous net inflows over the past four days, with a peak single-day net inflow of 35.09 million yuan, totaling 59.14 million yuan [1] - Leveraged funds are increasingly positioning themselves in the sector, with a financing net purchase amount of 2.22 million yuan on the previous trading day and a latest financing balance of 47.20 million yuan [1] Market Dynamics - There is a market rotation of funds from high-valued sectors to reasonably valued tracks, indicating a potential expansion of the pharmaceutical market from innovative drugs to lower-valued medical devices [1] - Core assets at the bottom are gradually rebounding, with many of the top ten constituent stocks having valuations below the historical 20th percentile, highlighting a significant margin of safety [1] Economic Context - Weak U.S. economic and employment data may accelerate the Federal Reserve's rate cuts, which could enhance global liquidity and favor technology stocks, presenting a good opportunity for investment [1] - Investors who missed the initial rally in the pharmaceutical sector can use the Medical Innovation ETF (516820) to position themselves ahead of a potential recovery [1]

Core Viewpoint - The market is experiencing a rotation from high valuation sectors to reasonably valued sectors, with a notable rebound in core assets in the medical innovation space [1] Group 1: Market Performance - On August 21, the market showed a "high-low cut" trend, with medical devices, traditional Chinese medicine, and vaccines leading in gains [1] - The Medical Innovation ETF (516820.SH) rose by 1.28%, with key stocks such as Pizhou Pharmaceutical (600436) up 4.84%, Mindray Medical (300760) up 3.73%, and Yuyue Medical (002223) up 2.43% [1] Group 2: Investment Opportunities - Funds are shifting towards undervalued sectors, with core assets in medical innovation gradually rebounding [1] - The top ten component stocks in the Medical Innovation ETF are mostly valued below the historical 20th percentile, indicating a significant safety margin [1] - Investors who missed the first half of the medical sector rally can position themselves in the Medical Innovation ETF (516820) to capitalize on the recovery [1]

Group 1 - Pharmaceutical stocks showed strength in the market, with the Medical Innovation ETF (516820.SH) rising by 0.78% and key stocks like WuXi AppTec (603259) increasing by 3.36% [1] - WuXi AppTec reported double-digit growth in both revenue and net profit for the first half of the year, reaching historical highs for the same period, and raised its full-year revenue guidance from 41.5-43 billion to 42.5-43.5 billion [1] - The company announced its first interim dividend of approximately 1 billion, with total dividends and buybacks for the year expected to reach nearly 7 billion [1] Group 2 - Market funds are shifting from high valuation sectors to reasonably valued tracks, with core assets gradually rebounding, particularly in the medical innovation sector [2] - The top ten component stocks in the medical innovation sector are mostly valued below the historical 20th percentile, indicating a significant margin of safety [2] - Investors who missed the first half of the pharmaceutical market rally can position themselves in the Medical Innovation ETF (516820) to capitalize on the recovery [2]