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On October 16, Hong Kong pharmaceutical stocks finally stopped falling! In early trading, the entire innovative drug chain staged a counterattack. The underlying indices of the Hong Kong Stock Connect Innovative Drug ETF Huabao (520880) and the Hong Kong Stock Connect Healthcare ETF Huabao (159137) respectively probed 4.7% and 3.9% higher. In the afternoon, gains narrowed due to a sudden plunge in the WuXi group, but they ultimately still closed up 1.94% and 0.19% respectively.
Chart: Hong Kong Stock Connect Innovative Drug ETF Huabao (520880) performance over the past 6 months. In terms of individual stock performance, on the innovative drug side, InnoCare Pharma-B was strong all day, leading with a 10.89% gain. Weighted stock BeiGene closed up 4.36%, Kelun-Biotech and Insilico Medicine rose over 3%, and KeyMed Bio-B gained 7.62%.
The 2026 European Society for Medical Oncology (ESMO) Annual Meeting will be held from October 23-27, and expectations for conference catalysts are heating up. On the CXO side, WuXi AppTec's A-shares plunged sharply in late trading and hit the daily limit, closing down 6.66% on explosive volume. Its H-shares dipped nearly 8% before recovering, ultimately closing down 2.19%. Hong Kong-listed WuXi Biologics and WuXi XDC followed with a pattern of spiking then pulling back, then bottoming out and recovering.
What happened? In the afternoon, news circulated that "the US Biotechnology Innovation Organization (BIO) suddenly reversed its stance, publicly supporting the BIOSECURE Act and removing WuXi AppTec's membership," and panic sentiment quickly triggered a stock price plunge. After subsequent multi-party verification, the news was most likely a re-post of old news from March 2024, and the Hong Kong WuXi group staged a V-shaped recovery in late trading.
Why are funds so sensitive? Since early September, accompanied by multiple positive factors including the lifting of BD restrictions, AI pharmaceutical catalysts, and a recovery in global innovative drug investment and financing, CXO has undergone a round of repair rally, and the sector as a whole has accumulated relatively substantial profit-taking positions. Recently, market risk appetite has declined, and concentrated profit-taking is prone to triggering emotional sell-offs.
From the perspective of the sector as a whole, Hong Kong pharmaceutical stocks took the lead in starting a recovery today, and its sustainability is worth looking forward to. Overnight on Wall Street, biopharmaceutical giants such as AbbVie and Eli Lilly saw their stock prices once again approach historical highs. Foreign media said that the high volatility of AI may be driving funds to re-examine the allocation value of large pharmaceutical stocks. The core appeal of such companies lies in stable, predictable earnings growth—continuous investment in R&D pipelines and extending the patent life cycles of core drugs—providing a risk-return profile completely different from tech stocks.
AI pullback, healthcare takes the baton? To capture the high-elasticity opportunities in Hong Kong healthcare, pay attention to two T+0 trading tools: Hong Kong Stock Connect Innovative Drug ETF Huabao (520880): The underlying index is 100% allocated to innovative drug R&D companies, with 70% of positions betting on innovative drug R&D leaders. Off-exchange feeder fund: 025221. Hong Kong Stock Connect Healthcare ETF Huabao (159137): The underlying index has over 73% AI pharmaceutical content and nearly 60% CXO content. Off-exchange feeder fund: 026922.
【Data Source】Public information from the Shanghai-Hong Kong-Shenzhen stock exchanges, China Securities Index Company, Hang Seng Index Company, etc. Weight data as of September 30, 2026. 【"AI Pharmaceutical Content" and "CXO Content" Note】The Hong Kong Stock Connect Healthcare Theme Index tracked by the Hong Kong Stock Connect Healthcare ETF Huabao covers 17 AI pharmaceutical-related constituent stocks (including pure AI pharmaceutical platforms, AI+CRO, and innovative drug companies laying out AI pharmaceuticals), with a total weight of 73.04%, of which CXO companies account for 59%. 【Fund Fee Rates】ETF funds do not charge sales service fees. When investors subscribe or redeem fund shares, the subscription and redemption agent broker may charge a commission at a rate not exceeding 0.5%, which includes relevant fees charged by stock exchanges, registration institutions, etc. For fund fee rates, please refer to the legal documents of each fund. 【Special Notice】The risk levels of the Hong Kong Stock Connect Healthcare ETF Huabao and its feeder fund, and the Hong Kong Stock Connect Innovative Drug ETF Huabao and its feeder fund, as assessed by the fund manager, are R4-medium-high risk, suitable for investors with aggressive (C4) and above profiles. The risk levels of the Healthcare ETF Huabao and the Pharmaceutical ETF Huabao are R3-medium risk, suitable for investors with balanced (C3) and above profiles. 【Risk Disclosure】The index constituent stocks in this article are for display only. Individual stock descriptions do not constitute any form of investment advice, nor do they represent the holdings or trading activities of any fund under the manager. 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, and investors must be responsible for any investment decisions they make independently. In addition, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers, and no responsibility is accepted for any direct or indirect losses caused by the use of the content of this article. The performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Past performance of a fund does not represent its future performance. Fund investment carries risks. MACD golden cross signals have formed, and these stocks are rising well!
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