On May 27, A-H innovative drug stocks continued to fluctuate at low levels. Huabao's Pharmaceutical ETF (562050), heavily weighted in A-share innovative drug stocks, and Huabao's Hong Kong Stock Connect Innovative Drug ETF (520880), which is fully invested in Hong Kong-listed pharmaceutical stocks, both hit new historical lows.
In the A-share market, BeiGene fell over 2%, Zhejiang NHU dropped more than 3%. Jiangsu Hengrui Pharmaceuticals touched a near one-year low before recovering and turning positive. The market's sole Pharmaceutical ETF, Huabao (562050), declined over 1%, with frequent premiums appearing in the market, indicating active buying interest.
Stocks within the Hong Kong Stock Connect Innovative Drug sector also saw more declines than gains. Leading weighted stocks such as BeiGene, Innovent Biologics, CSPC Pharmaceutical Group, and Sino Biopharmaceutical all traded in negative territory. Akeso bucked the trend, rising over 3%. The Hong Kong Stock Connect Innovative Drug ETF Huabao (520880), which is 100% invested in innovative drug R&D targets, fell more than 1.5%, continuing to trade at a premium in the market, suggesting long positions may be entering on dips.
Analysis points out that sentiment towards innovative drugs is weak in the short term, with pressure on capital flows. The seesaw effect with the AI sector, foreign capital withdrawal, and a decline in the trading proportion of southbound funds are cited as main reasons for the recent adjustment. Leading weighted innovative drug stocks have generally pulled back in May, potentially representing a "mistaken sell-off" opportunity.
From a medium to long-term perspective, the fundamentals of the innovative drug sector remain solid: In Q1 2026, outbound licensing deals exceeded $60 billion, with Hengrui's landmark $15.2 billion platform deal signaling an industry upgrade. On the policy front, optimization of initial pricing mechanisms and the linkage between the national reimbursement drug list and commercial insurance directories provide continuous support. The Hong Kong Stock Connect innovative drug sector has entered an overall profitability stage.
Notably, the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting is scheduled to take place in Chicago from May 29 to June 2. Research abstracts led by Chinese scholars and selected for important sessions such as oral presentations, rapid oral presentations, clinical science symposia, and continuing education sessions reached 95, a new high compared to 48 in 2024 and 72 in 2025. Among these, 12 studies were selected as Late-Breaking Abstracts (LBA).
To accumulate core innovative drug assets at low levels, consider these two key investment tools: For pure innovative drug exposure, consider the Hong Kong Stock Connect Innovative Drug ETF Huabao (520880), which is 100% invested in innovative drug R&D companies. Its top ten holdings account for over 70%, highlighting strong leading characteristics. The underlying assets are Hong Kong stocks, offering high elasticity and T+0 trading. For those seeking lower volatility, the market's sole Pharmaceutical ETF Huabao (562050) offers a unique "70% innovative drugs + 30% traditional Chinese medicine" allocation, a scarce combination in the market, blending the high growth of innovative drugs with the high dividends of traditional Chinese medicine.
Note on "the market's sole Pharmaceutical ETF Huabao (562050)": According to data from the Shanghai and Shenzhen Stock Exchanges, as of now, Huabao's Pharmaceutical ETF is the only ETF in the market tracking the CSI Pharmaceutical Index. Note: ETF funds do not charge sales service fees. When investors subscribe for or redeem fund units, the subscription/redemption agent broker may charge a commission not exceeding 0.5%, which includes relevant fees charged by the stock exchanges and registration institutions. Please refer to each fund's legal documents for specific fund fee rates. Risk Disclosure: Constituent stocks of indices mentioned herein are for display purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holding information or trading动向 of any fund managed by the manager. The fund manager assesses the risk rating of Huabao's Pharmaceutical ETF and its feeder fund as R3-Medium Risk, suitable for Balanced (C3) and above investors. The risk rating of Huabao's Hong Kong Stock Connect Innovative Drug ETF and its feeder fund is assessed 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, comments, forecasts, charts, indicators, theories, any form of expression, etc.) is for reference only. Investors are solely responsible for any independent investment decisions. Furthermore, any views, analyses, or forecasts 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 fund performance is not indicative of future results. Fund investment carries risks.
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