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Affected by the overnight plunge in U.S. stocks, Asian markets generally suffered heavy losses this morning.

The Nikkei 225 index plunged more than 2,000 points during the session, a drop of more than 5%, hitting a new low in nearly six months. Since peaking on July 10, it has fallen by more than 6,300 points in less than a month, with a cumulative decline of nearly 15%.

In response to the stock market crash, Japanese Finance Minister Shunichi Suzuki made an urgent statement, saying that stock prices are determined by the market based on various factors such as economic conditions, and he is closely monitoring stock market fluctuations with a sense of urgency.

In addition, the South Korean Composite Index opened sharply lower in the morning and fell by more than 3%, hitting a new low in nearly two months; the Asian Emerging Markets Index also fell by more than 2%; the Hang Seng Index, Hang Seng Technology Index, etc. also fell by more than 2%.

The A-share market also opened low, technology growth stocks strengthened during the session, the Science and Technology Innovation 50 Index and the ChiNext Index were once in the green, and trading volume in the two markets showed a trend of further shrinking.

On the market, pharmaceutical, pork, defense and military, and pre-prepared food sectors led the gains, while public transportation, communication equipment, nonferrous metals, and petroleum sectors led the declines. Qiming Information performed a "ground-to-sky" board, with six daily limits in nine trading days.

Pharmaceutical stocks welcome favorable policies

After a brief adjustment yesterday, pharmaceutical stocks surged across the board again today, with CXO concepts leading the way in daily limit increases. The sector index rose by more than 4%, hitting a one-and-a-half-month high, and half-day trading volume exceeded yesterday's full-day trading volume.Ruizhi Pharmaceutical took only about 12 minutes to reach its 20% daily limit; Baihua Pharmaceutical also reached its daily limit in only about 4 minutes, and has reached its daily limit three times in the past four trading days, with its share price hitting a six-month high; Puli Pharmaceuticals and others also reached their daily limit or rose by more than 10%.

Diet drugs, innovative drugs, hepatitis concepts, immune management, etc. also soared, with many stocks such as Shutaishen and Duorui Pharmaceuticals hitting the 20% daily limit. Hehua Holdings, Shuangcheng Pharmaceutical, and Haisen Pharmaceuticals also closed the board in batches.

Pharmaceutical stocks in the Hong Kong stock market followed the rise, with the Gene and Oncology Index, Hang Seng Innovative Drug Index, and China Hong Kong Biotechnology Index rising against the trend. Junshengtai Pharmaceutical-B surged nearly 30%, Immune Onco-B once rose more than 50% during the session, and Lepu Bio-B and Dingdang Health all strengthened.

The top 30 ETF funds in terms of growth are all related to medicine, among which biotechnology ETF, medical ETF, medical innovation ETF and innovative drug industry ETF all increased by more than 2%, ranking at the top of the growth rate.

On the news front, the General Office of the State Council issued the "Guiding Opinions on Improving the Long-term Mechanism for Basic Medical Insurance Participation" (hereinafter referred to as the "Guiding Opinions"), which requires clarifying the responsibilities of all parties and implementing participation in accordance with the law; improving policies and measures to encourage continuous participation; improving service quality and strengthening perceived participation.

The Guiding Opinions put forward the following key measures: first, to improve policy measures, including further relaxing household registration restrictions on participation in basic medical insurance at permanent residence and place of employment, and promoting the linkage between residents' medical insurance premiums and economic and social development levels and per capita disposable income of residents; second, to optimize management services, including establishing a national insurance database, realizing "one person, one file" management, and carrying out concentrated publicity activities for national basic medical insurance participation in September each year; third, to strengthen departmental coordination, clarify the main responsibilities of relevant departments in insurance work, do a good job in population information data comparison, social insurance business coordination and linkage, and "one thing at birth" service for newborns, mobilize and guide social forces to participate in medical assistance in accordance with the law, promote the coordinated development of basic medical insurance and commercial insurance, and promote information sharing.

In addition, on July 30, Shanghai issued the "Several Opinions on Supporting the Innovation and Development of the Full-Chain of the Biomedicine Industry", aiming to support the innovation and development of the full-chain of Shanghai's biomedicine industry, focusing on key links such as innovative research and development, review and approval, and promotion and application of biomedicine products.

AVIC Securities said that in the long run, as the volume-based procurement of drugs and consumables continues to advance, companies with high safety margins, strong innovation capabilities, rich product pipelines and a good competitive landscape are expected to continue to benefit in the long term. It is recommended to continue to focus on innovative drugs and innovative drug industry chains, high-end medical devices, offline chain pharmacies, and medical consumption with scarcity and consumer attributes, while exploring second-tier blue-chip stocks with relatively low valuations.

Commercial spaceflight is growing rapidly

The commercial aerospace concept continued to strengthen, and the sector index rose from a drop of more than 1% to a rise of more than 1% in the morning. Tengda Technology hit the daily limit for the 10th consecutive day, and its stock price hit a new historical high; Aerospace Morning Light hit the daily limit for the 6th consecutive day, hitting a new high in 8 and a half years; Daye shares hit the daily limit for 3 consecutive days, and StarNet Yuda hit the daily limit for 2 consecutive days.

In recent years, my country's commercial aerospace sector has made continuous breakthroughs and is entering a stage of rapid development. Local governments have introduced support policies based on local characteristics, such as Beijing's "Action Plan for Accelerating the Innovation and Development of Commercial Aerospace (2024-2028)" and Shanghai's "Shanghai Action Plan for Promoting the Development of Commercial Aerospace and Building a Highland of Space Information Industry (2023-2025)".

In addition, Hainan Province, Anhui Province, Hubei Province and other places have also included commercial space in their 2024 government work reports, all aiming to seize the commanding heights of the aerospace information industry, attract more commercial aerospace companies to settle down, and accelerate the breakthrough of the entire chain in commercial aerospace and other fields.

Data from the China Business Industry Research Institute shows that from 2019 to 2023, the scale of my country's commercial aerospace market will grow from 800 billion yuan to 1900 billion yuan, with a compound annual growth rate of 23.3%; the market size is expected to continue to maintain rapid growth in 2024 and is expected to reach 230 billion yuan.

Investors should note that recently, many commercial aerospace concept stocks have issued risk warning announcements for abnormal stock price movements. Tengda Technology, which has been on the board for 10 consecutive days, has issued 5 announcements in a row to warn of risks. The company's main business is the research and development, production and sales of stainless steel fastener products such as bolts, nuts, screws, washers, etc. Fasteners are a general term for components used to connect and fasten various parts. They have a wide range of applications and are called "industrial rice." From the sales model, the company currently adopts the method of mainly selling through traders and supplemented by direct sales to end users. So far, the company has no direct supply to commercial aerospace customers.

Aerospace Morning Light, which has been on the board for six consecutive days, also announced today that the company's products used in the commercial aerospace field are mainly metal hoses used to support launch missions. In 2023, this part of the revenue will be about 27 million yuan, accounting for a relatively small proportion of the revenue. The company's revenue structure will not change significantly in the short term.

Guotai Junan believes that commercial aerospace is positioned as a new growth engine and has been repeatedly mentioned in many policies, which shows the government's attention. The commercial aerospace industry is in the stage of transitioning from the introduction stage to the growth stage, and strong policy support is expected to promote the rapid development of the commercial aerospace industry.

Editor: Peng Bo

Proofreader: Peng Qihua