On the afternoon of January 19th, Hong Kong Stock Connect innovative drug stocks continued their weak performance, with the pure-play Hong Kong Stock Connect Innovative Drug ETF (520880) falling over 2.7%. A wide premium appeared in the secondary market, indicating active buying interest, suggesting the sector may once again be entering a strategic allocation window.
Leading heavyweight constituents collectively declined. Sino Biopharmaceutical and Kelun-Botech Biopharma fell over 6%, while Innovent Biologics and 3SBio dropped more than 5%. CSPC Pharmaceutical Group and BeiGene saw declines of around 2%.
According to statistics from Pharmaceutical Intelligence, Chinese innovative drug companies secured 15 out-licensing deals overseas again in December 2025. The total value of China's innovative drug out-licensing agreements for 2025 surged to $135.7 billion from over $50 billion in the same period last year, indicating growing global recognition of the R&D capabilities of Chinese pharmaceutical firms.
Zhongtai International released its February 2026 investment strategy for the pharmaceutical sector: it continues to highly recommend the innovative drug segment for 2026, advising investors to focus on companies with strong certainty in product sales revenue growth for 2025.
Regarding near-term catalysts, starting January 2026, numerous innovative drug companies will successively release their 2025 performance forecasts. Opportunities for valuation repair driven by better-than-expected results warrant attention. Furthermore, following the J.P. Morgan Healthcare Conference, the first quarter remains a period dense with overseas licensing deals. Investors should monitor innovative drug companies with valuable pipelines that are not yet fully priced in, such as those possessing ADC, bispecific antibody, or small nucleic acid platforms.
Public information indicates that the Hong Kong Stock Connect Innovative Drug ETF (520880) and its corresponding feeder fund (025221) passively track the Hang Seng Hong Kong Stock Connect Innovative Drug Selection Index. This index possesses three distinct advantages, highlighting its strong allocation value: 1. Pure and Comprehensive. Excludes CXO companies, offering pure exposure to innovative drugs! Comprehensively covers companies engaged in innovative drug R&D. 2. High Concentration of Leaders. The top ten innovative drug leaders account for over 73% of the index weight, representing the core strength of the sector. 3. More Controllable Risk. Imposes forced weight reductions on constituents with poor liquidity, effectively managing tail risks.
Data source: Shanghai, Shenzhen, and Hong Kong Stock Exchanges, public information. Note: The ETF mentioned in the article does not charge a sales service fee. When investors subscribe for or redeem fund units, the subscription/redemption agent may charge a commission of up to 0.5%, which includes relevant fees charged by the stock exchange and registration institutions. Risk Warning: The index constituents listed are for display purposes only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holding information or trading动向 of any fund managed by the management company. The fund manager assesses the risk rating of the HuaBao Hong Kong Stock Connect Healthcare ETF and the Hong Kong Stock Connect Innovative Drug ETF as R4 - Medium-High Risk, suitable for Aggressive (C4) 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 any independent investment decisions. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any kind to the reader, and no responsibility is accepted for any direct or indirect losses arising from the use of the content herein. 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; invest carefully.
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