As of 2:00 PM on March 24, the pharmaceutical sector led gains against the market trend. Top performers included KINTOR PHARMA-B (09939.HK), along with other notable advances. The Hang Seng Stock Connect Innovative Drug ETF (159316) rose by 2.46%, with the industry showing a dual-driver structure of CXO (contract research, development, and manufacturing) services and innovative drugs such as ADC (antibody-drug conjugates). Leading companies continue to demonstrate robust performance and order fulfillment, supporting a high-growth outlook. The sector's policy environment is stabilizing, highlighting its investment appeal. CXO leaders are seeing a steady recovery in earnings. A major company projects double-digit revenue growth for 2025, with its TIDES (peptide/oligonucleotide) business doubling, becoming a key growth driver. The company maintains a strong order book, with revenue growth guidance of 18%-22% for 2026. As capacity utilization improves and higher-margin businesses increase their share, gross margins continue to strengthen. Its global supply chain position remains solid, with rapid revenue growth in the U.S. market. ADC innovative drugs are gradually entering a harvest phase. Core products are steadily advancing in domestic commercialization, with volume expansion expectations strengthening after inclusion in the national reimbursement drug list. Overseas clinical data readouts are expected by late 2026. Technology platforms are being successfully translated, with multiple licensing collaborations established with international pharmaceutical companies, generating significant upfront and milestone payments. The pipeline includes well-diversified multi-target assets, and combination therapies further expand growth potential. Leaders in bioconjugate drug CRDMO show strong pipeline momentum, with order book growth exceeding 50% year-over-year. At the industry level, policies are stabilizing marginally. The review and approval processes for innovative drugs and national reimbursement negotiations have become regularized, continuously validating the commercial capabilities of leading firms. Deepening global industry chain specialization is increasing China's share in pharmaceutical outsourcing and innovative drug R&D worldwide. Industry concentration is rising, strengthening the competitive moats of leaders with technological, capacity, and client advantages. To capture opportunities in the high-growth pharmaceutical sector, two core ETF targets are worth highlighting: For biotechnology, focus on the Hang Seng Biotech ETF (159105); for innovative drugs, consider the Hang Seng Stock Connect Innovative Drug ETF (159316).
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