[Today’s headlines]

Li Keqiang: The package of policies to stabilize the economy determined by the State Council executive meeting will have detailed implementation rules before the end of May

On the 25th, the State Council held a national teleconference on stabilizing the economy. Li Keqiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, delivered an important speech. Li Keqiang said that it is necessary to ensure that the policies determined by the Central Economic Work Conference and the government work report are basically implemented in the first half of the year, and the implementation rules of the package of policies to stabilize the economy determined by the State Council executive meeting will be released before the end of May.

On the 26th, the State Council will send inspection teams to 12 provinces to carry out special inspections on the implementation of policies and supporting facilities. The main economic indicators for the second quarter of each region will be announced by the national statistics department in accordance with laws and regulations, seeking truth from facts and by province, and the State Council will notify the relevant work situation.

Fed meeting minutes: All Fed officials support the start of the plan to shrink the balance sheet, and most Fed officials support a 50 basis point rate hike in the next few meetings

After raising interest rates three times, the Fed may suspend interest rate hikes. The last interest rate hike will be on September 22, when the inflation data for August has been announced (on September 13). Monthly inflation data. That may explain why Atlanta Fed President Bostic also hinted earlier this week that the Fed might pause rate hikes in September. After the September rate hike, the Fed will “pause rate hikes” into a review period. Therefore, September is a major time point. Given the advance of the market, August may usher in the dawn.

Market expectations for the Fed’s actions before September are also changing. The 50 basis points rate hike at the June and July meetings is no longer a sure thing. The market reflects that the cumulative rate hike in June and July is less than 100 basis points. Confidence in the 50 basis point rate hike in July has loosened, and the expectation of a 50 basis point rate hike in September lower. June and July have been tricky months for the Fed because market expectations are always changing.

【General Outlook】

Nasdaq rose 1.51%, Hong Kong stocks ADR index fell slightly

As of the close overnight, the three major indexes rose collectively. The Dow Jones rose 191.66 points to close at 32120.28 points, or 0.60%; the Nasdaq rose 170.29 points to close at 11434.74 points, or 1.51%; the S&P 500 rose 37.25 points, It closed at 3978.73 points, an increase of 0.95%. The ADR index of Hong Kong stocks fell, on a proportional basis, to close at 20,164 points, down 7.45 points or 0.04% from the close in Hong Kong.

【Hot spot preview】

1. The State Office issued the “Key Tasks for Deepening the Reform of the Medical and Health System in 2022”

Among them, it is proposed to expand the scope of centralized procurement of pharmaceutical consumables, and strive to achieve a total of more than 350 generic names of drugs purchased by the state and local governments in each province. At the national level, a batch of high-value spinal medical consumables has been purchased in a centralized manner. For pharmaceutical consumables with large consumption and high purchase amount other than the state-organized procurement, guide each province to implement or participate in alliance procurement to implement at least one centralized procurement with volume, so as to improve the online procurement rate of drugs and high-value medical consumables. Implement the policy of retaining the balance of medical insurance funds for centralized procurement of pharmaceutical consumables, improve the assessment of the retention of the balance, and incentivize the rational use of selected products. Research and improve the rules and plans for the collection and use of specific drugs such as antibiotics. Strengthen the price monitoring of medical consumables.

Comments: There is pressure on the rebound of the medical device sector.

2. Dongfeng Co., Ltd. raises the reform knife again, and Dongfeng shares will be split

It is reported that Dongfeng Motor Co., Ltd. is negotiating with Dongfeng Motor Group (00489) to transfer its equity interest in Dongfeng Motor Co., Ltd. After the transaction is completed, Dongfeng Motor Co., Ltd. will be separated from Dongfeng Co., Ltd., and the controlling shareholder will become Dongfeng Motor Group. Direct management of the automotive group. “The diversion and adjustment of personnel has already begun, and there will be many more actions in the future.” A person familiar with the matter said. On the evening of May 25, Dongfeng Co., Ltd. announced that the company received a notice from the controlling shareholder Dongfeng Co., Ltd. yesterday that Dongfeng Co., Ltd. is planning the transfer of the company’s shares, which may lead to changes in the company’s control. Trading in the company’s shares has been suspended this morning and will continue to be suspended tomorrow.

3. After the “12 consecutive declines” in monthly sales, the heavy truck industry is expected to pick up in June

According to the latest statistics from the China Automobile Association, in April this year, the monthly sales volume of my country’s heavy truck industry was only 44,000 units, a year-on-year decrease of 77%. Since May last year, the monthly sales volume of the heavy truck industry has formed a “12 consecutive decline”. Affected by this, in the first four months of this year, the overall sales volume of the domestic heavy-duty truck industry was only 276,000 units, a net decrease of 449,000 units from 725,000 units in the same period of the previous year, and a sharp drop of 62% year-on-year. “Affected by the switch between National V and National VI, the sales of heavy trucks in the first half of last year showed a substantial increase, and a high base was also accumulated. However, after the policy factors overdrafted ahead of schedule, the sales of heavy trucks began to decline in the second half of the year.” Zhang Xiang, researcher at the Automotive Innovation Center of North China University of Technology He said that the combination of various unfavorable factors such as the industry cycle, the impact of the epidemic, and logistics obstruction has resulted in a continuous decline in industry sales year-on-year. However, a number of institutions have recently judged that with the easing of the epidemic, the re-activation of transportation and infrastructure, and the help of the country’s multiple “steady growth” policies, the heavy truck industry is expected to gradually recover from June, ushering in marginal opportunities for improvement. Driven by the “dual carbon” strategy, the new energy heavy truck industry is also expanding rapidly.

Relevant Hong Kong stocks involved include Sinotruk (03808) and Weichai Power (02338).

[Single stocks are sunny]

1. Junshi Bio (01877) new crown drug VV116 updated the phase III data, which has achieved statistical superiority

Junshi Bio has released a more detailed announcement to introduce the details of the VV116 clinical trial. Junshi said that compared with PAXLOVID, patients receiving VV116 (JT001) had a shorter median to sustained clinical recovery time, achieving statistical superiority.

The results of this clinical study showed that VV116 (JT001) for early treatment of mild to moderate COVID-19 patients with high risk of progression to severe disease including death achieved the primary endpoint of the protocol. In terms of safety, VV116 (JT001) has a good overall safety profile, with a lower overall adverse event rate than PAXLOVID. Regarding the detailed research data, Junshi Bio will be published in academic journals in the future.

This more detailed report of clinical results has undoubtedly responded to the questions questioned by the public: there is no unreasonable communication between the clinical plan and the drug regulatory department; not only the primary endpoint is achieved, but the secondary endpoint also has a trend of statistical superiority. .

In addition, Junshi Biotech announced the 2022 Restricted Stock Incentive Plan (Draft), the number of restricted shares to be granted to the incentive objects in this incentive plan is 13.325 million A shares, accounting for approximately 911 million shares of the company’s total share capital on the date of announcement of the draft incentive plan of 1.46%. The grant price of restricted shares granted to incentive objects for the first time is RMB 70.00 per share.

Follow-up catalysis of stock price: VV116 complete data release, VV116 domestic NDA and approval, BTLA data ASCO release, VV116 global multi-center phase III data readout, follow-up is expected to have government purchase orders.

2. Yankuang Energy (01171) and (600188.SH) plan to issue H-share convertible bonds to increase its shareholding in Yancoal Australia

Yankuang Energy plans to issue H-share convertible bonds with a principal amount of approximately US$1.794 billion to increase its shareholding in Yanzhou Coal Australia Co., Ltd. The transaction price is US$3.6 per Yancoal Australia share. As of the announcement date, the transaction plan has not yet been finalized.

Through this transaction, the company will increase its shareholding in Yancoal Australia, and the equity coal reserves, production and economic benefits enjoyed by the company’s shareholders will also increase accordingly. Yancoal Australia’s subordinate assets constitute beneficial supplements and risk hedges for the company in terms of geographical location, coal varieties and sales markets. Increasing the shareholding ratio in Yancoal Australia will help the company to further strengthen resource integration, enhance asset synergy, enhance core competitiveness and anti-risk capabilities, and achieve sustainable development, which is in line with the long-term interests of the company and its shareholders.

3. Ganfeng Lithium Industry Equity Incentive Plan: Net profit in 2022 shall not be less than 8 billion yuan

Ganfeng Lithium (01772) disclosed an equity incentive plan. The number of stock options to be granted to incentive objects is 2.17 million, and the exercise price of the granted stock options is 118.86 yuan per share. Performance assessment target: Net profit in 2022 shall not be less than 8 billion yuan. On the same day, it was announced that it plans to build a spodumene extraction production base in Fengcheng with its own funds of not more than 2 billion yuan, and form a lithium battery new energy material capacity with an annual output of 50,000 tons of lithium carbonate equivalent.

JPMorgan said that Ganfeng Lithium (01772)’s first-quarter earnings performance still far exceeded expectations. As a leader in the lithium industry, its valuation is very attractive.

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