Robust Earnings Fuel Continued Gains for Hong Kong Stock Connect Biotech ETFs Amid Market Downturn

Deep News03-26 11:11

On March 26, Hong Kong Stock Connect pharmaceutical stocks demonstrated resilience against the broader market trend. The Huabao Hong Kong Stock Connect Innovative Drug ETF (520880), which focuses exclusively on innovative drug R&D companies, and the Huabao Hong Kong Stock Connect Healthcare ETF (159137), representing core healthcare assets, both opened higher, each climbing over 1% at one point during the session. The 520880 ETF experienced both rising volume and price, reclaiming its 20-day moving average intraday, with real-time turnover exceeding 200 million yuan.

Several innovative drug stocks led the gains. LEPU BIO-B (02157) surged more than 14% intraday, breaking above its half-year moving average and leading the advance among all Hong Kong Stock Connect constituents. The company released its annual report the previous evening, showing revenue of 935 million yuan for 2025, a 154.19% year-on-year increase. Profit attributable to company owners was 261 million yuan, representing a turnaround from a loss to a profit compared to the previous year.

To date, 22 constituent stocks of the Huabao Hong Kong Stock Connect Innovative Drug ETF (520880) have disclosed their full-year 2025 results. Among them, 12 companies achieved profitability, while 13 reported net profit attributable to parents growing at a double-digit year-on-year rate or higher. Hutchmed China (HCM) saw its net profit surge over 11-fold year-on-year. Companies including InnoCare Pharma (09969), LEPU BIO-B (02157), and BeiGene (BGNE) all reported net profit growth exceeding 100% year-on-year.

The strong earnings validate that innovative drug companies are accelerating into a harvest phase. Multiple institutions have highlighted the importance of "adhering to the sector's fundamental logic and recognizing opportunities in the bottoming area." In the secondary market, Hong Kong healthcare stocks have been in a phase of consolidation since last September. On March 23, both the Hong Kong Stock Connect Innovative Drug ETF (520880) and the Huabao Hong Kong Stock Connect Healthcare ETF (159137) closed at their lowest historical closing prices. For investors looking to accumulate core Hong Kong healthcare assets at low levels, these two T+0 trading instruments are highlighted for consideration. For investing in innovative drugs, the Huabao Hong Kong Stock Connect Innovative Drug ETF (520880) offers a 100% focus on innovative drug R&D companies. Its top ten holdings account for over 70% of the portfolio, underscoring a strong concentration in leading players. For broader healthcare exposure, the Huabao Hong Kong Stock Connect Healthcare ETF (159137) allocates approximately 70% of its portfolio to CXO and AI healthcare sectors, while also covering innovative drugs and medical devices (including brain-computer interfaces). Its top ten holdings include稀缺 internet healthcare leaders such as JD Health and AliHealth.

A MACD golden cross signal has formed, indicating positive momentum for these stocks.

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