On March 5, Hong Kong's pharmaceutical sector finally staged a rebound during the morning session. Leading innovative drug stocks rose broadly, with the Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF (520880), which invests 100% in innovative drug R&D companies, opening higher and extending gains to rise over 3%. Yesterday, the ETF recorded its fifth consecutive decline, with its on-market price hitting a record low. However, funds moved against the trend to increase positions, accumulating over 135 million yuan in net inflows over five consecutive days of bargain hunting.
Heavyweight constituent SINO BIOPHARM (01177) surged more than 5%. The company announced yesterday that it entered into an exclusive licensing agreement with Sanofi for roxadustat, receiving an upfront payment of $135 million, potential milestone payments of up to $1.395 billion, and tiered royalties of up to a double-digit percentage based on annual net sales. This transaction represents the largest out-licensing deal by a Chinese pharmaceutical company in the transplantation field.
According to statistics, the total value of business development deals for Chinese innovative drugs exceeded $50 billion in the first two months of 2026, with upfront payments surpassing $3 billion, approaching 40% of the full-year 2025 total. Meanwhile, leading innovative drug companies are gradually entering a commercialization harvest period. Company Rongchang Biologics turned a net profit of 709 million yuan in 2025 from a loss, Junshi Biosciences narrowed its losses, and BeiGene achieved its first non-GAAP net profit.
The Hong Kong healthcare sector also opened higher in morning trading. The Huabao Hang Seng Hong Kong Stock Connect Healthcare Theme ETF (159137) rose over 1%, with heavyweight constituents including Wuxi Biologics, WuXi AppTec, XtalPi, and WuXi XDC collectively advancing.
It is worth noting that the Huabao Hang Seng Hong Kong Stock Connect Healthcare Theme ETF (159137) recorded three consecutive days of declines yesterday, with its on-market price also hitting a new low since listing. The recent adjustment in the Hong Kong healthcare sector appears sufficient, making current allocations highly cost-effective.
To capture opportunities in Hong Kong pharmaceutical stocks at low levels, utilizing ETFs offers higher efficiency, greater elasticity, and T+0 settlement. For investing in innovative drugs, consider the Hang Seng Hong Kong Stock Connect Innovative Drug Selection ETF (520880) and its off-exchange feeder fund (025221), which provides 100% exposure to innovative drug R&D companies. The top ten holdings account for over 70% of the portfolio, highlighting its focus on industry leaders. For healthcare exposure, the Huabao Hang Seng Hong Kong Stock Connect Healthcare Theme ETF (159137) targets medical innovation, encompassing hot concepts such as brain-computer interfaces, AI healthcare, and online pharmacies, while also covering leaders across the entire innovative drug industry chain.
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