Core Viewpoint - The recent quarterly reports of public funds indicate a significant growth in the scale of pharmaceutical-themed funds, highlighting the strong performance and potential of the innovative drug sector in China [1][3][5]. Fund Performance - As of July 14, five pharmaceutical-themed funds reported their Q2 results, showing varying degrees of growth in scale. Notably, the Longcheng Pharmaceutical Industry Select Mixed Fund saw its scale increase by over 30 times, from 0.36 billion to 11.32 billion [3][4]. - Other funds reported the following scales: Longcheng Health Mixed at 4.93 billion (up 7.24%), Longcheng Pharmaceutical Technology at 4.9 billion (up 17.37%), Longcheng Healthcare Mixed at 3.52 billion (up 3.83%), and Yongying Pharmaceutical Health at 1 billion (up 57.82%) [3][4]. Top Holdings - Yongying Pharmaceutical Health Fund underwent a complete overhaul of its top ten holdings, which now include companies like Shutaishen and Rejing Biology [4]. - The Longcheng Pharmaceutical Industry Select Fund saw minor adjustments, adding three new stocks while removing others, maintaining a relatively stable portfolio [4]. Market Outlook - The innovative drug sector is experiencing strong momentum, with several leading stocks hitting their upper limits. For instance, stocks like Laimei Pharmaceutical and Lianhuan Pharmaceutical saw significant gains [5]. - The recent policy announcement from the National Medical Insurance Administration regarding the adjustment of the national basic medical insurance drug catalog is expected to further boost the innovative drug sector [5][6]. - Analysts emphasize that the upgrade of China's innovative drugs is not optional but essential, with a focus on companies that possess strong technological capabilities and can continuously create clinical value [5][6].