Hong Kong's healthcare sector, accessible through the Stock Connect, led the market in early trading on June 24. The representative Hua Bao Hong Kong Stock Connect Healthcare ETF (159137) saw a substantial increase of over 5% on heavy trading volume.
Among the constituent stocks, the CXO (Contract Research, Development and Manufacturing Organization) sector experienced a significant breakout. Asymchem Laboratories(Tianjin)Co.,Ltd. shares surged by more than 17%, while WuXi XDC Cayman Inc. rose over 10%. WuXi AppTec Co., Ltd. and GenScript Biotech Corp. both gained over 9%.
Analyst Perspectives on the Sector
Huatai Securities noted that the recent finalization of the U.S. 1260H list has had minimal actual impact, releasing short-term negative pressures and valuation constraints. Most leading CXO companies reported strong performance and order bookings for the first quarter of 2026. Considering currency and base effects, the firm anticipates good continuity in subsequent quarters, with potential for accelerated growth at some companies. They continue to highlight the opportunities within the CXO sector for 2026 at the current market position.
The CMB International healthcare team also commented that since 2025, the CXO sector has entered a new cycle of prosperity following a sequence of "orders → performance → capital flow." With interim performance forecasts potentially starting in July, the core themes remain the "simultaneous increase in volume and price" for CROs and the "ramp-up of new molecular blockbusters" for CDMOs.
Evaluating the Current Investment Window
From a timing perspective, Hong Kong-listed healthcare stocks have accelerated their decline since mid-April, now reaching a relatively low point which highlights their attractive valuation for investment. Notably, on June 22, the intraday price of the Hua Bao Hong Kong Stock Connect Healthcare ETF (159137) hit a new historical low.
Investment Tools for Accessing Core Healthcare Assets
For investors looking to accumulate core Hong Kong healthcare assets at lower levels, two efficient T+0 trading instruments are highlighted. To invest in the broader Hong Kong Stock Connect healthcare theme, the Hua Bao Hong Kong Stock Connect Healthcare ETF (159137) is noted, with over 40% of its portfolio allocated to the CXO sector while also covering leaders in innovative drugs, AI healthcare, and medical devices (including brain-computer interfaces).
For a pure-play on innovative drug development, the Hua Bao Hong Kong Stock Connect Innovative Drug ETF (520880) is referenced. This ETF is fully invested in innovative drug R&D companies, with its top ten holdings accounting for over 70% of the portfolio, emphasizing its focus on sector leaders.
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