On March 27, pharmaceutical assets in both A-shares and H-shares experienced a strong surge, leading gains across the market. Innovative drug stocks led the charge, with the Hong Kong Stock Connect Innovative Drug ETF HUABAO (520880), which focuses entirely on innovative drug R&D, soaring 5.51%. The Pharmaceutical ETF HUABAO (562050), heavily weighted in A-share innovative drug stocks, rose 4.21%, both marking their largest single-day gains on record. Medical sector stocks also showed strong activity, with the Hong Kong Stock Connect Medical ETF HUABAO (159137) and the Medical ETF HUABAO (512170) closing up 3.36% and 2.51%, respectively.
Among A-H pharmaceutical assets, Hong Kong Connect innovative drug stocks showed the strongest momentum. The Hong Kong Stock Connect Innovative Drug ETF HUABAO (520880) demonstrated high volatility, with an intraday swing of nearly 7% and a peak gain of 5.72%. The session concluded with a strong bullish candlestick pattern that fully engulfed the previous day's decline. Trading was particularly active, with daily turnover reaching 740 million yuan, an 80% increase from the previous day, hitting a new high in nearly four and a half months.
The Hong Kong Stock Connect Innovative Drug ETF HUABAO (520880) tracks 50 Hong Kong-listed companies engaged in innovative drug research and development. The median gain among its constituents was close to 5%, with six stocks rising more than 10%. Leading heavyweight stock CSPC Pharmaceutical Group surged 13.85%, while 3SBio Inc. advanced 10.41%. Newly added constituents such as Insilico Medicine and VLP-B, which were included in the index this month, also jumped over 10%.
Key drivers behind the rally include the following catalysts: 1. Significant share purchases by controlling shareholders of leading innovative drug companies. On March 26, CSPC Pharmaceutical Group's controlling shareholder, Cai Dongchen, substantially increased his holdings by 49.4 million shares, involving approximately 413 million Hong Kong dollars. The scale of this purchase is particularly notable, demonstrating management's strong confidence in the company's long-term value. 2. A profit turnaround for several innovative drug companies. To date, 30 constituents of the Hong Kong Stock Connect Innovative Drug ETF HUABAO (520880) have released their 2025 annual reports. Among them, 17 innovative drug R&D companies reported profits, with 16 achieving double-digit year-on-year net profit growth. Six companies, including Innovent Biologics, saw growth rates exceeding 100%, with the highest increase surpassing 1,100%.
3. Strong expectations for upcoming major catalysts. The AACR Annual Meeting is scheduled for April 17-22, 2026, in San Diego, USA. According to incomplete statistics, 104 Chinese pharmaceutical companies will present over 250 innovative drugs at the event, significantly increasing the overall visibility of China's innovative drug sector in the global arena.
In the secondary market, the Hong Kong Connect innovative drug sector has been adjusting for two consecutive quarters, making the window for strategic accumulation increasingly clear. For targeted exposure, investors may consider the Hong Kong Stock Connect Innovative Drug ETF HUABAO (520880), which is entirely focused on innovative drug R&D companies. Its top ten holdings account for over 70% of the portfolio, highlighting its concentration in industry leaders. The underlying assets are Hong Kong-listed stocks, offering high volatility and T+0 trading advantages.
Data source: China Securities Index Company, Shanghai, Shenzhen, and Hong Kong stock exchanges, etc. Note: ETF funds do not charge sales service fees. When subscribing for or redeeming fund units, agent brokers may charge a commission of up to 0.5%, which includes related fees collected by stock exchanges and registration institutions. Fund fee details are available in each fund's legal documents.
Risk warning: Index constituents shown are for display only. Descriptions of individual stocks are not intended as investment advice in any form and do not represent the holdings or trading动向 of any fund managed by the fund manager. The fund manager assesses the risk rating of the Hong Kong Stock Connect Innovative Drug ETF HUABAO and its feeder fund, the Hong Kong Stock Connect Medical ETF HUABAO and its feeder fund, and the Medical ETF feeder fund as R4 - medium to high risk, suitable for aggressive (C4) and above investors. The risk rating for the Medical ETF, Pharmaceutical ETF, and their feeder funds is R3 - medium risk, suitable for balanced (C3) and above investors. 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 responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any kind to readers, 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 the 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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