Core Viewpoint - The innovative drug ETF Tianhong (517380) has experienced a decline of 2.56% as of June 26, with a current scale exceeding 5 billion yuan, making it the largest innovative drug ETF across the Shanghai, Shenzhen, and Hong Kong markets [1][2]. Fund Performance - The ETF has seen net inflows for 3 out of the last 5 days, indicating continued investor interest despite recent market fluctuations [2]. - The innovative drug sector in both Hong Kong and A-shares experienced a brief correction in mid-June after a period of significant gains [2]. Market Analysis - Analysts suggest that the development and commercialization of innovative drugs is a long-term process, and as research capabilities gain recognition, the sector may experience substantial growth [2]. - Recent reports indicate that the innovative drug sector underwent a phase of correction due to geopolitical tensions and prior market sentiment-driven rapid increases [2]. Future Outlook - According to Xiangcai Securities, the domestic innovative drug industry is expected to reach a turning point by 2025, shifting from capital-driven growth to profit-driven growth, presenting opportunities for both performance and valuation recovery [3]. - The supply-demand dynamics in the innovative drug sector are improving, with innovation becoming the core driving force, suggesting a favorable investment environment [3]. - As of June 25, the top ten constituents of the Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drug 50 Index account for 60.17% of the index, including high-quality A-share companies like Innovent Biologics and BeiGene [3].

Group 1 - The A-share innovative drug concept showed slight weakness after opening, while the Hong Kong pharmaceutical and biotechnology sector performed positively [1] - The Tianhong Innovative Drug ETF (517380) saw a rise of 0.30% after initially dropping nearly 0.9%, with a premium rate of 0.07% [1] - Major weighted stocks in the ETF, such as WuXi AppTec, Hengrui Medicine, and Innovent Biologics, performed well, while BeiGene saw declines [1] Group 2 - Chinese innovative drugs are at a critical turning point from quantitative to qualitative change, with broad prospects for growth [2] - Domestic pharmaceutical companies are shifting their business development (BD) focus from inward introduction to outward licensing [2] - The innovative drug sector has experienced rapid growth in product revenue and external licensing over the past three years, with significant BD transactions occurring this year [2]

Group 1 - The innovative drug sector showed strong performance today, with notable gains from companies such as Innovent Biologics rising over 13%, and Tigermed, Ascentage Pharma-B, and Kelun Pharmaceutical increasing over 3% [1] - The Tianhong Innovative Drug ETF (517380) rose by 1.88% in early trading, reaching a 250-day high in net value, influenced by the overall market trend [1] - The upcoming 2025 American Society of Clinical Oncology (ASCO) annual meeting in Chicago is expected to further boost investment enthusiasm in innovative drugs, with a record number of presentations from Chinese experts [1] Group 2 - The Tianhong Innovative Drug ETF (517380) has a core holding that includes leading innovative drug companies such as Hengrui Medicine, BeiGene, Innovent Biologics, Kelun Pharmaceutical, China National Pharmaceutical Group, Hansoh Pharmaceutical, and CXO companies like WuXi AppTec and Kelun [2] - Historically, the Tianhong Innovative Drug ETF has shown strong excess returns, with a cumulative increase of over 25% this year, outperforming the second-best industry ETF by more than 10 percentage points [2] Group 3 - Investors optimistic about the pharmaceutical sector may consider focusing on linked funds, specifically Class A (014564) and Class C (014565) [3]