On August 11, A-shares and Hong Kong stocks experienced a significant pullback, with healthcare assets broadly peaking and then retreating due to overall market conditions. However, the innovative drug supply chain demonstrated resilience, with many stocks closing in the green.
The A-share pharmaceutical sector showed localized strength, with insulin leader Gan&Lee Pharmaceuticals hitting the daily limit-up and closing at the ceiling price. Boruisi Pharmaceuticals rose 7.54%. The only ETF tracking the pharmaceutical index on the market, Huabao (562050), surged 2.5% intraday, crossing the 250-day moving average, and closed 0.8% higher, marking its third consecutive gain. After the previous day's close, Gan&Lee Pharmaceuticals announced that its self-developed weight-loss drug, Bofagluptide injection, had been licensed for commercialization in the European market. The total potential value of this deal could reach up to 726 million euros (approximately 5.674 billion yuan).
In the Hong Kong stock market, many stocks in the innovative drug supply chain also peaked and then declined. WuXi Biologics rose 3.6% before closing slightly lower. WuXi AppTec surged over 3% intraday to hit a new high, eventually closing 0.56% higher. Bolstered by AI-driven pharmaceutical concepts, Genscript Biotech and XtalPi Holdings bucked the market trend, closing 1.57% and 2.4% higher, respectively. Huabao (159137), a Hong Kong Stock Connect medical ETF with over 50% CXO exposure, rose 2.5% intraday to refresh its 5-month high, closing 0.42% higher for its third consecutive gain.
Innovative drugs also moved lower in the afternoon. Huabao (520880), a Hong Kong Stock Connect innovative drug ETF with 100% exposure to innovative drug R&D, closed 0.22% higher, barely holding the 200-day moving average, after rising over 2% intraday. Among its constituent stocks, Zai Lab led the gains with a 5.28% increase, while heavyweight leader Beone Medicines rose 2.63%, securing its sixth consecutive day of gains and hitting a new high for the year!
The recent "pharmaceutical rally" has been ongoing. Feng Chencheng, fund manager of Huabao (520880), analyzed that after a deep market correction, the recent rebound has lacked a clear main theme. As the interim reporting season approaches, sectors or stocks with strong fundamentals may attract short-term capital allocation. At the same time, the Q2 public fund allocation to pharmaceuticals dropped to a 5-year low, and an underweighted position can easily lead to a diffusion rally.
From an industry perspective, the CXO sector continues to show high prosperity. Order book expectations for leading companies like WuXi AppTec and Pharmaron remain positive. The financing environment for overseas biotech companies is improving marginally, and Chinese innovative drug BD transactions continue to close, driving the recovery of R&D outsourcing demand. Additionally, companies like Genscript have achieved technological breakthroughs in AI-driven drug discovery, further strengthening the long-term industrial trend of AI + life sciences.
The commercialization of innovative drugs, both domestically and internationally, is continuously strengthening market confidence. Innovent Biologics' Q2 product revenue exceeded 4.3 billion yuan, a year-on-year increase of about 60% and a sequential increase of 10%, entering a stage driven by multiple products. Beone Medicines' Q2 global revenue reached $1.705 billion (a 30% year-on-year increase), and the company raised its full-year profit guidance, with demand for Zanubrutinib exceeding expectations across multiple regions and indications. Zai Lab's Q2 product sales grew 11% quarter-over-quarter.
How much further can the rally in innovative drugs and the supply chain go? Southwest Securities suggests focusing on the converging catalysts of performance delivery, clinical data, and overseas expansion for innovative drugs in August and September. Regarding clinical data, attention should be paid to major R&D data releases such as WCLC 2026 (September) and ESMO 2026 (October).
Feng Chencheng believes that with the momentum from commercialization and BD, the industry will generally see better-than-expected profit deliveries this year. Combined with potential BD activities in Q3 and Q4, as well as AI-related collaborations, innovative drugs are expected to take over from CXO and initiate a new round of rallies.
Data sourced from Shanghai, Shenzhen, and Hong Kong stock exchanges, CSI Index Company, and Hang Seng Index Company. Weight data derived from the PCF list of the ETF fund as of August 10, 2026. Institutional views sourced from Southwest Securities 'Pharmaceutical Industry Weekly Report (August 3-7): Market Sentiment Recovers, Focus on Technology and Innovative Drug Themes'.
Note: The ETF fund does not charge a sales service fee. When investors subscribe for or redeem fund shares, the subscription/redemption agent may charge a commission of up to 0.5%, which includes fees charged by the stock exchange, the registration institution, and others. For fund rates, please refer to the legal documents of each fund.
Risk Disclosure: The constituent stocks mentioned in this article are for display purposes only. Descriptions of individual stocks do not constitute any form of investment advice and do not represent the holdings or trading intentions of any fund under the manager's management. The fund manager has assessed the risk rating of Huabao (562050) as R3-Medium Risk, suitable for investors with a balanced (C3) risk profile and above. The risk rating of Huabao (159137) and Huabao (520880) and their linked funds is R4-Medium to High Risk, suitable for investors with an aggressive (C4) risk profile and above. 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. Investors are solely responsible for their own investment decisions. Furthermore, any views, analyses, and forecasts in this article do not constitute investment advice to readers and shall not be held liable 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 constitute a guarantee of the fund's performance. Past performance does not represent future results. Fund investment carries risks. MACD golden cross signal formed, these stocks are performing well!
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