On November 5, the Hong Kong innovative drug sector continued its upward march. The underlying index of the HuaBao Hang Seng Hong Kong Stock Connect Innovative Drug ETF (520880) gained nearly 5% after closing up 6.87% the previous day. The underlying index of the HuaBao Hang Seng Hong Kong Stock Connect Healthcare ETF (159137) surged 7.71% yesterday, marking its largest single-day gain in nearly a year, and rose another nearly 4% today.
Among individual stocks, innovative drug leaders maintained their strength. BeiGene Ltd (ASX: ONC) climbed 6% to reach a 5-year high. CSPC Pharmaceutical Group Ltd, Innovent Biologics Inc, and Akeso Inc all posted significant gains.
CXO names remained active. Asymchem Laboratories (Tianjin) Co., Ltd. (ASX: 002821) rose over 10% after surging nearly 13% the previous day, while Pharmaron Beijing Co., Ltd. gained 6%. Internet healthcare leaders went on the offensive, with JD Health International Inc and Ping An Healthcare and Technology Co., Ltd. rising over 7% and 6% respectively.
Recently, the pharmaceutical sector has seen a dense cluster of positive catalysts, with overseas mapping further fueling the rally. On the earnings front, WuXi AppTec Co., Ltd. reported revenue of 45.54 billion yuan for the first three quarters, already surpassing the full-year total of last year, with backlog orders reaching 76.7 billion yuan. Joinn Laboratories (China) Co., Ltd. saw Q3 single-quarter net profit surge more than 8-fold year-on-year, while Asymchem Laboratories (Tianjin) Co., Ltd. (ASX: 002821) posted growth of over 81%. BeiGene Ltd (ASX: ONC) is scheduled to release its third-quarter results before the US market opens on November 5, with the market pre-pricing expectations.
On the capital flow side, third-quarter public fund reports showed pharmaceutical holdings increased by 4.05 percentage points quarter-on-quarter, with healthcare R&D outsourcing (CXO) seeing the largest additions at 2.10 percentage points. Hong Kong pharmaceutical stocks' share of heavy holdings in Hong Kong equity funds rose to 21.51%, as capital rotated out of AI hardware and back into pharmaceuticals.
On the policy front, the National Healthcare Security Administration has completed on-site negotiations, bidding, and result confirmation for the basic medical insurance and commercial insurance innovative drug catalogues, and is now in the agreement-signing phase. The new catalogues are expected to be announced in November and take effect on January 1, 2027. The layered payment framework of "basic medical insurance covering basics — commercial insurance innovation catalogue supplementing high-value items" continues to be implemented, constituting a key observation window for innovative drug market access and repricing.
On the industry side, late October saw a dense readout of clinical data for domestic ADCs and bispecific antibodies at the ESMO annual meeting, with multiple studies selected for oral presentations and late-breaking abstracts, reinforcing the narrative that "Chinese innovative drugs are moving from licensing stories to global clinical and commercialization validation." Coupled with sustained License-out activity during the year, BD deals and academic conference data remain catalysts for sentiment and valuation repricing.
On the external news front, Democrats won congressional dominance in the US midterm elections, which is marginally positive for the pharmaceutical sector. Democrats are more inclined to restore and extend ACA healthcare subsidies and stabilize Medicaid. Congress is more likely to protect NIH research budgets and FDA review resources, which benefits early-stage biotech financing and pipeline advancement. Under a divided government structure, policy uncertainty is expected to shift from "unilateral acceleration" to "hearings and bargaining," which is sentiment-positive for risk appetite recovery in the innovative drug chain.
Zhang Fang, fund manager of the HuaBao Hang Seng Hong Kong Stock Connect Healthcare ETF (159137), noted that the medium-term allocation value of the pharmaceutical sector remains intact — supported by a confluence of factors including historically low valuation percentiles, public fund positions that have recovered but are not yet crowded, and the institutionalization of the innovative drug payment system. Combined with the external mapping of warmer healthcare coverage and innovation ecosystem after the US midterm elections, the focus remains on innovative drugs and the CXO direction.
For full-chain exposure to innovative drugs, consider the T+0 trading tool: HuaBao Hang Seng Hong Kong Stock Connect Innovative Drug ETF (520880), whose underlying index is 100% allocated to innovative drug R&D companies, with 70% of positions betting on innovative drug R&D leaders. Off-exchange feeder fund: 025221. HuaBao Hang Seng Hong Kong Stock Connect Healthcare ETF (159137), whose underlying index is heavily weighted in the innovative drug industry chain, approximately 50% CXO plus 20% innovative drugs, with the WuXi group accounting for over 40%. Off-exchange feeder fund: 026922.
[Data Source] Public information from Shanghai-Hong Kong-Shenzhen exchanges, China Securities Index Company, Hang Seng Index Company, etc. Weight data as of October 31, 2026.
[Fund Fee Rates] ETFs do not charge sales service fees. When investors subscribe or redeem fund shares, the subscription and redemption agent broker may charge a commission of no more than 0.5%, which includes fees charged by the stock exchange, registrar, and other related parties. Fund fee rates are detailed in each fund's legal documents.
[Special Notice] The risk rating assessed by the fund manager for the HuaBao Hang Seng Hong Kong Stock Connect Innovative Drug ETF feeder fund is R4 — medium-high risk, suitable for investors with aggressive (C4) risk profiles and above.
[Risk Disclosure] The index constituent stocks mentioned in this article are for illustrative purposes only. Individual stock descriptions do not constitute investment advice in any form and do not represent the holdings or trading activities of any fund under the manager. The constituent stocks of the underlying index are adjusted in due course according to the index compilation rules. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors are responsible for their own independent investment decisions. In addition, any views, analyses, and forecasts in this article do not constitute investment advice in any form to readers and shall not bear any responsibility for direct or indirect losses caused by the use of the content herein. Fund investment involves risks. Past performance of a fund does not represent its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Fund investment requires caution. MACD golden cross signals have formed, and these stocks are performing well!
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