Investment Rating - The report maintains an "Accumulate" rating for the pharmaceutical and biotechnology industry [5]. Core Insights - The initial review of the commercial insurance innovative drug directory has been approved, indicating a continuous expansion of payment space [2][21]. - The report highlights the importance of focusing on companies with strong R&D capabilities and existing commercialized innovative drug products, such as BeiGene, Hengrui Medicine, Innovent Biologics, and Kangfang Bio [2][25]. Summary by Sections Market Review - Last week, the A-share pharmaceutical and biotechnology index rose by 3.08%, outperforming the CSI 300 index by 0.77 percentage points, but underperforming the ChiNext index by 2.76 percentage points, ranking 10th among 31 sub-industries [1][15]. - The Hong Kong Hang Seng Medical Health Index increased by 7.12%, outperforming the Hang Seng Index by 5.51 percentage points [1][15]. Company R&D Progress - Recent IND applications include Hengrui Medicine's HRS-4729 injection and HRS-7172 tablets, as well as clinical applications for Kangnuo's CM536 injection and Sanofi's SSS50 injection [28]. Key Company Profit Forecasts and Valuation - Hengrui Medicine: EPS forecast for 2024 is 0.99 CNY, with a PE ratio of 64, rated as "Accumulate" [4]. - Yuyue Medical: EPS forecast for 2024 is 1.80 CNY, with a PE ratio of 20, rated as "Buy" [4]. - Mindray Medical: EPS forecast for 2024 is 9.62 CNY, with a PE ratio of 24, rated as "Buy" [4]. - United Imaging Healthcare: EPS forecast for 2024 is 1.53 CNY, with a PE ratio of 84, rated as "Buy" [4]. Payment Perspective Strategy - The report emphasizes the need to select investment opportunities structurally, focusing on the core contradiction between payment willingness and ability [3][25]. - It identifies three key payment channels: hospital payments, out-of-pocket payments, and overseas payments, recommending companies like Hengrui Medicine, Mindray Medical, United Imaging Healthcare, and Yuyue Medical [3][25]. Innovative Drug Directory Insights - A total of 121 drugs passed the initial review for the commercial insurance innovative drug directory, with 79 drugs appearing in both the basic medical insurance and commercial insurance directories, providing a "double insurance" effect [2][22]. - The report notes that targeted therapies, particularly PD-(L)1 monoclonal antibodies, dominate the applications for the commercial insurance directory [2][23].