On March 30th, amidst a broad downturn in A-shares and Hong Kong stocks, innovative drugmakers stood out as a top performer. The Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF (520880), which focuses exclusively on innovative drug R&D, opened lower but then surged in a straight line, climbing as much as 2.39% intraday. The Pharmaceutical ETF (562050), heavily weighted in A-share innovative drug companies, also rose over 1% against the market trend. In the previous trading session, ETFs 520880 and 562050 recorded massive single-day gains of 5.51% and 4.21% respectively, marking their largest historical daily increases.
A key constituent of the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF (520880), Insilico Medicine, saw its stock price skyrocket nearly 15% at the market open. The company recently announced a major collaboration with Eli Lilly, valued at up to $2.75 billion. As part of the deal, Eli Lilly secured exclusive rights to commercialize a GLP-1 drug candidate for diabetes developed using Insilico Medicine's AI technology, with an upfront payment of $115 million. Notably, Insilico Medicine was only recently included in the Hong Kong Stock Connect program on the 9th of this month and was promptly added to the underlying index of the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF (520880), ahead of most other comparable indices.
Other strong performers included REMEGEN, InnoCare Pharma, and Akeso Biopharma. According to their latest published annual reports for 2025, REMEGEN reported a net profit of 700 million yuan, representing a year-on-year increase of over 148%. InnoCare Pharma achieved double-digit growth in both revenue and net profit, with the latter surging by 245.8%. Akeso Biopharma generated 3.033 billion yuan in novel drug sales revenue for 2025, a 51% increase year-on-year. To date, 36 constituent stocks of the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF (520880) have released their 2025 annual reports. Among these, 21 innovative drug R&D companies reported profits, 19 saw net profit grow by double-digit percentages year-on-year, and 7 companies experienced growth rates exceeding 100%, with the highest increase surpassing 1,100%.
In the secondary market, the innovative drug sector has been undergoing an adjustment phase for two consecutive quarters, making the window for strategic accumulation increasingly clear. For targeted exposure, investors can consider the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF (520880), which invests 100% in innovative drug R&D companies. Its top ten holdings account for over 70% of the portfolio, highlighting its focus on industry leaders. The underlying assets are Hong Kong-listed stocks, offering high volatility and T+0 settlement. For investors seeking lower volatility, the Huabao Pharmaceutical ETF (562050) offers a unique allocation of "70% innovative drugs + 30% traditional Chinese medicine," a rare combination in the market. This blend aims to capture the high growth potential of innovative drugs while benefiting from the high dividends of traditional Chinese medicine stocks, offering a balanced strategy for both offensive and defensive positioning.
Data sources: China Securities Index Co., Ltd., Shanghai, Shenzhen, and Hong Kong Exchanges, etc. Note: ETF funds do not charge sales service fees. When investors subscribe for or redeem fund units, the subscription/redemption agency broker may charge a commission of up to 0.5%, which includes relevant fees charged by the stock exchange and registration institutions. Please refer to the legal documents of each fund for specific fee rates. Risk提示: The index constituents mentioned are for illustrative purposes only. Descriptions of individual stocks are not intended as investment advice in any form and do not represent the holdings or trading activities of any fund managed by the asset manager. The fund manager assesses the risk rating of the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF and its feeder fund, as well as the Huabao Hang Seng Hong Kong Stock Connect Healthcare ETF and its feeder fund, as R4 - Medium to High Risk, suitable for Aggressive (C4) and above investors. The risk rating for the Huabao Healthcare ETF, Pharmaceutical ETF, and their feeder funds is assessed as R3 - Medium Risk, suitable for Balanced (C3) and above investors. Any information appearing in this text (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are solely responsible for any independent investment decisions. Furthermore, any views, analysis, or predictions herein 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 performance of a fund is not indicative of its future performance. Fund investment carries risks.
A MACD golden cross signal has formed, indicating positive momentum for these stocks.
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