Pharmaceutical Sector Leads Hong Kong Market Rebound with Strong ETF Performance

Deep News03-24

On March 24, Hong Kong stocks staged a broad rebound, with the pharmaceutical sector showing high elasticity and leading gains. The innovative drug industry chain experienced a rapid recovery. The Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection Trading Open Ended Index Securities Invest (520880), which focuses entirely on innovative drug R&D targets, and the Huabao Hong Kong Stock Connect Healthcare ETF (159137), which has high CXO exposure, both opened higher and surged over 3% during the session. Both ETFs had hit record closing lows the previous day.

Among individual stocks, leading innovative drug companies recovered. Weighted constituents of the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection Trading Open Ended Index Securities Invest (520880), including Akeso, Innovent Biologics, and CSPC Pharmaceutical Group, all rose over 2%. Holdings in the Huabao Hong Kong Stock Connect Healthcare ETF (159137), particularly CXO leader WUXI XDC (02268), surged following earnings reports, with WUXI XDC gaining over 8% and WUXI APPTEC (02359) rising over 7%.

On the news front, WUXI XDC disclosed its 2025 financial results. The company reported revenue of RMB 59.44 billion, a year-on-year increase of 46.7%, with overseas revenue accounting for 85% of the total. Adjusted net profit reached RMB 15.59 billion, up 69.9% year-on-year. The group's total backlog increased to $1.49 billion, a 50.3% rise.

WUXI APPTEC reported revenue of RMB 454.56 billion for the period, up 15.84% year-on-year, with net profit attributable to shareholders of approximately RMB 191.51 billion, surging 102.65%. The company forecasts 2026 overall revenue to reach RMB 513-530 billion, representing 18%-22% growth from continuing operations.

The strong earnings from CXO leaders continue to validate the fundamental recovery trend in the sector. In the secondary market, Hong Kong healthcare stocks have been adjusting since last September and have reached relatively low levels, making leading stocks particularly attractive. To capture the rebound opportunity in Hong Kong healthcare stocks at current lows, consider these two key instruments:

For healthcare exposure, the Huabao Hong Kong Stock Connect Healthcare ETF (159137) allocates approximately 70% to CXO and AI healthcare, while also covering innovative drugs and medical devices (including brain-computer interfaces). Its top ten holdings include稀缺 internet healthcare leaders like JD Health and AliHealth.

For innovative drug investment, the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection Trading Open Ended Index Securities Invest (520880) invests 100% in innovative drug R&D companies, with its top ten holdings accounting for over 70% of the portfolio, highlighting its focus on industry leaders.

The formation of a MACD golden cross signal indicates positive momentum for these stocks.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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