Biopharma Firms Report Widespread Profit Doubling, HK Stock Connect Drug Stocks Surge Again, 520880 Rapidly Approaches 5%! HK Stock Connect Healthcare Also Rises, 159137 Touches 4% High

On April 1, signals of easing geopolitical tensions prompted a global market rebound, with Hong Kong stocks quickly recovering and healthcare assets once again taking the lead. The Huabao Hong Kong Stock Connect Innovative Drug Selection ETF (520880), which invests 100% in innovative drug R&D companies, surged rapidly towards a 5% gain, while the Huabao Hong Kong Stock Connect Healthcare ETF (159137), representing core healthcare assets in Hong Kong, touched a high of 4%.

The rally in Hong Kong Stock Connect innovative drug stocks was particularly strong. Lepu Biopharma, Insilico Medicine, and RemeGen led gains with increases of over 10%, while heavyweight leaders such as Akeso, Innovent Biologics, and CSPC Pharmaceutical Group rose more than 5%. BeiGene soared over 6%.

The market movement is strongly driven by better-than-expected earnings reports. So far, 47 constituent stocks of the Huabao Hong Kong Stock Connect Innovative Drug ETF (520880) have released their 2025 annual reports. Among them, 28 companies reported profits, with 25 achieving double-digit year-on-year net profit growth.

Notably, as many as 10 constituent stocks saw their net profits more than double. Hutchmed reported a net profit surge of over 11 times year-on-year, while Innovent Biologics saw an increase of more than 9 times. Companies including BioMap, 3SBio, InnoCare Pharma, Sihuan Pharmaceutical, Lepu Biopharma, RemeGen, BeiGene, and CanSino Biologics all posted net profit growth rates exceeding 100%.

The strong earnings validate that innovative drug companies are accelerating into a harvest phase. Multiple institutions have advised to "hold firm to the sector's underlying logic and pay attention to opportunities in the bottom area." In the secondary market, Hong Kong healthcare stocks have been in a phase of adjustment since last September and currently remain at relatively low levels. For investors looking to position early in core Hong Kong healthcare assets, two efficient T+0 tools are recommended for allocation.

For investing in innovative drugs, consider the Huabao Hong Kong Stock Connect Innovative Drug ETF (520880), which allocates 100% to companies engaged in innovative drug R&D. Its top ten holdings account for over 70% of the portfolio, highlighting a strong focus on industry leaders.

For healthcare investments, the Huabao Hong Kong Stock Connect Healthcare ETF (159137) is an option, with approximately 70% of its allocation in CXO and AI healthcare sectors, while also covering innovative drugs and medical devices (including brain-computer interfaces). Its top ten holdings include稀缺 internet healthcare leaders such as JD Health and AliHealth.

Source: China Securities Index Company, Shanghai, Shenzhen, and Hong Kong Stock Exchanges, etc. Note: ETF funds do not charge sales service fees. When subscribing for or redeeming fund shares, subscription/redemption agent brokers may charge a commission of up to 0.5%, which includes related fees charged by stock exchanges and registration institutions. Detailed fund fee structures are available in the respective fund legal documents.

Risk Warning: The index constituents mentioned are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading动向 of any fund managed by the management company. The fund manager assesses the risk rating of the Huabao Hong Kong Stock Connect Innovative Drug ETF and the Huabao Hong Kong Stock Connect Healthcare ETF as R4 - Medium to High Risk, suitable for aggressive (C4) and above investors. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for any independent investment decisions they make. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any kind to the reader, and no liability is accepted for any direct or indirect losses arising from the use of this content. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past fund performance is not indicative of future results. Fund investment carries risks.

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