On March 30th, while the broader A-share and Hong Kong markets experienced adjustments, the innovative drug sector once again demonstrated independent strength. The Huabao Hong Kong Stock Connect Innovative Drug Selection ETF (520880), which invests 100% in innovative drug R&D companies, and the Pharmaceutical ETF (562050), heavily weighted in A-share innovative drug stocks, both continued their gains by over 1% against the market trend. In the previous trading session, these two ETFs surged by 5.51% and 4.21% respectively, each recording their largest single-day gains in history.
Focusing on the intraday performance of the Hong Kong Stock Connect innovative drug sector, the representative Huabao Hong Kong Stock Connect Innovative Drug Selection ETF (520880) opened lower but climbed higher, at one point rising over 2%. It ultimately closed up 1% on heavy volume, marking consecutive positive sessions, with an intraday amplitude of 3.61%. The turnover reached 781 million yuan, setting a new high in over four and a half months.
The constituent stocks of the Huabao Hong Kong Stock Connect Innovative Drug Selection ETF (520880) showed notable highlights: Insilico Medicine saw its shares surge nearly 15% at the market open, closing up 2.62% with an amplitude exceeding 14%. Its turnover of 624 million yuan was the second-highest in its history. MIRXES-B experienced a sudden surge of over 43% in the afternoon, closing up 23.69%. Grand Pharmaceutical, Akeso Inc., and RemeGen Co., Ltd. all rose by around 5%.
On the news front, Insilico Medicine announced a collaboration with Eli Lilly for AI-driven drug research and development, potentially worth up to $2.75 billion. Lilly obtained exclusive sales rights for a GLP-1 diabetes drug developed using Insilico's AI technology, with an upfront payment of $115 million. According to disclosures from the National Medical Products Administration, the total value of out-licensing deals for Chinese innovative drugs exceeded $60 billion in the first three months of this year, nearing half of the full-year 2025 figure.
Strong corporate earnings have also provided a catalyst for the innovative drug sector's performance. As the intensive disclosure of 2025 annual reports continues, the profit realization of innovative drug companies is being consistently validated. To date, 36 constituent stocks of the Huabao Hong Kong Stock Connect Innovative Drug Selection ETF (520880) have released their 2025 annual reports. Among them, 21 companies achieved profitability, with 19 reporting net profit growth exceeding double digits year-on-year. Hutchmed, Innovent Biologics, BioMap, and InnoCare Pharma saw net profit growth rates as high as 1111%, 960%, 416%, and 244% respectively. Lepu Biotech, RemeGen Co., Ltd., and BeiGene also reported growth rates exceeding 100%.
With a strong start to Business Development activities in 2026 and leading pharmaceutical companies crossing breakeven points in batches, the innovative drug sector exhibits high景气 (prosperity) and prominent allocation value. To track the rebound in innovative drug stocks, consider the high-flexibility, T+0 tool—the Huabao Hong Kong Stock Connect Innovative Drug Selection ETF (520880), which provides 100% exposure to innovative drug R&D companies. Its top ten holdings account for over 70% of the portfolio, highlighting its focus on industry leaders. For investors seeking lower volatility, the Huabao Pharmaceutical ETF (562050) offers a unique allocation of "70% innovative drugs + 30% traditional Chinese medicine," a rare combination in the market. It balances the high growth potential of innovative drugs with the high dividends of traditional Chinese medicine, offering both offensive and defensive characteristics.
Data Source: China Securities Index Co., Ltd., Shanghai, Shenzhen, and Hong Kong Stock Exchanges, etc. Note: ETF funds do not charge sales service fees. When subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission of up to 0.5%, which includes relevant fees charged by stock exchanges and registration institutions. Fund fee details are available in each fund's legal documents.
Risk Warning: The index constituents mentioned are for illustrative purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading动向 (movements) of any fund managed by the management company. The fund manager assesses the risk rating of the Huabao Hong Kong Stock Connect Innovative Drug Selection ETF and its feeder fund as R4 - Medium to High Risk, suitable for aggressive (C4) and above investors. The risk rating of the Pharmaceutical ETF and its feeder fund is R3 - Medium Risk, suitable for balanced (C3) and above investors. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are solely responsible for their independent investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice of any kind to the reader, and no liability is accepted for any direct or indirect losses resulting from the use of this content. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past performance of a fund is not indicative of its future results. Fund investment carries risks.
A MACD golden cross signal has formed, indicating positive momentum for these stocks.
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