The last trading day of May (May 29) saw a joint rebound in A-share and H-share innovative drug stocks. The Huabao Pharmaceutical ETF (562050), heavily invested in A-share innovative drug companies, and the fully H-share focused Huabao HK Connect Innovative Drug ETF (520880) started rising before noon and surged together in the afternoon, closing up 2.35% and 3.57% respectively, significantly outperforming the broader market.
Focusing on the HK Connect innovative drug sector, boosted by a multi-billion dollar deal, Innovent Biologics led the charge, soaring nearly 13% at one point. In the afternoon, heavyweight leaders such as Akeso Inc., CSPC Pharmaceutical Group, and 3SBio Inc. followed suit collectively, driving the 100% innovative drug R&D-focused Huabao HK Connect Innovative Drug ETF (520880) to a peak gain of 4.29%.
By the close, 520880 ended up 3.57%, breaking a five-day losing streak. Its intraday amplitude reached 5.25%, with a single-day turnover of 594 million yuan, marking the highest volume in nearly a month—a surge of over 124% compared to the previous day. Notably, there were net inflows of nearly 13 million yuan in the two preceding days.
The HK Connect innovative drug sector declined for the first four days of the week, with the intraday price of the Huabao HK Connect Innovative Drug ETF (520880) repeatedly hitting new historical lows. What were the core drivers behind its sudden rebound on Friday?
First, another multi-billion dollar Business Development (BD) deal emerged. On May 29, Innovent Biologics announced a collaboration with Pfizer on oncology drugs, with a total transaction value of 10.5 billion US dollars, including an upfront payment of 650 million US dollars and potential milestone payments of up to 9.85 billion US dollars.
Second, negative market rumors were dispelled. On May 28, the innovative drug sector plunged due to rumors about BD regulatory policies. On May 29, Innovent's announcement of a major BD deal countered these rumors. Coupled with multiple companies in the industry stating that their pipeline authorizations were unaffected, market sentiment returned to rationality.
Third, a major industry conference commenced. The 2026 American Society of Clinical Oncology (ASCO) Annual Meeting is being held from May 29 to June 2. Thirteen studies from 12 Chinese pharmaceutical companies were selected for plenary sessions and late-breaking abstracts, setting a new historical record for the number of selections. Subsequently, domestic innovative drugs are entering a concentrated data readout window.
Huafu Securities pointed out that there are no fundamental negatives for innovative drugs, with policy support, bottom valuations, strong overseas expansion momentum, and an earnings inflection point. They remain optimistic, undeterred by the darkness before dawn.
The current adjustment in innovative drug stocks has lasted over 8 months. To acquire core innovative drug assets at low levels, consider these two key investment tools:
For pure innovative drug exposure, consider the Huabao HK Connect Innovative Drug ETF (520880), which is 100% invested in innovative drug R&D companies. The top ten holdings account for over 70%, highlighting its leading characteristics. Its underlying assets are H-shares, offering high volatility and T+0 trading.
For those seeking reduced volatility, the only on-exchange pharmaceutical ETF, Huabao Pharmaceutical ETF (562050), offers a unique "70% innovative drugs + 30% traditional Chinese medicine" allocation—a scarce product in the market, combining the high growth of innovative drugs with the high dividends of traditional Chinese medicine.
Note on "the only on-exchange pharmaceutical ETF Huabao (562050)": According to data from the Shanghai and Shenzhen Stock Exchanges, as of now, the Huabao Pharmaceutical ETF is the only ETF tracking the CSI Pharmaceutical Index.
Note: ETF funds do not charge sales service fees. When investors subscribe or redeem fund shares, subscription/redemption agents may charge a commission of up to 0.5%, which includes fees charged by stock exchanges, registration institutions, etc. For detailed fund fee rates, please refer to the respective fund's legal documents.
Risk Disclosure: The index constituents mentioned herein are for illustrative purposes only. Descriptions of individual stocks do not constitute any form of investment advice nor represent the holdings or trading动向 of any funds managed by the fund manager. The fund manager assesses the risk rating of the Huabao Pharmaceutical ETF and its feeder fund as R3 - Medium Risk, suitable for Balanced (C3) and above investors. The risk rating of the Huabao HK Connect Innovative Drug ETF and its feeder fund is assessed as R4 - Medium-High Risk, suitable for Aggressive (C4) and above investors. Any information appearing in this article (including but not limited to individual stocks,评论, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analyses, or forecasts herein do not constitute investment advice of any form to readers, and no liability is accepted for any direct or间接 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 involves risks.
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