--- title: "Has the pharmaceutical sector hit bottom this time? Which directions are worth paying attention to?" type: "News" locale: "en" url: "https://longbridge.com/en/news/281451185.md" description: "Since September last year, the pharmaceutical sector has undergone a deep adjustment, with the CSI 300 Pharmaceutical Index retreating over 18%. Recently, the pharmaceutical sector has shown strength against the trend, with some leading companies' stock prices reaching new highs. Analysis indicates that the pharmaceutical sector may have bottomed out, with marginal improvements in valuation and fundamentals. Future investments should focus on the innovative drug field, and although the macro environment remains uncertain in the short term, investment strategies should emphasize structural opportunities" datetime: "2026-04-02T01:59:09.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/281451185.md) - [en](https://longbridge.com/en/news/281451185.md) - [zh-HK](https://longbridge.com/zh-HK/news/281451185.md) --- # Has the pharmaceutical sector hit bottom this time? Which directions are worth paying attention to? Since September last year, the pharmaceutical sector has undergone a deep adjustment. As of the end of March 2026, the CSI 300 Pharmaceutical Index has declined by more than 18%, and the Hang Seng SCHK Innovative Drug Index has also fallen by 20% (data source: Wind, data selection period from September 5, 2025, to March 30, 2026). However, recently, against the backdrop of increased global market volatility, the pharmaceutical sector has shown resilience, with some leading companies' stock prices even reaching new highs. This raises the question for investors: Has the darkest hour for the pharmaceutical sector passed? What directions are worth grasping at present? This article will analyze these two questions based on objective data. **1\. Has the pharmaceutical sector bottomed out?** From the perspectives of valuation, institutional holdings, and fundamentals, the pharmaceutical sector currently shows signs of marginal improvement across multiple dimensions. Some high-prosperity sub-sectors have begun to accumulate rebound momentum. Of course, currently constrained by geopolitical conflict variables, the conditions for a comprehensive trend reversal still require further verification of market risk appetite recovery and improvement in the industrial fundamentals. Three favorable signals for the stabilization of the pharmaceutical sector: **First, the allocation of active funds has entered a historically relative low position.** In Q4 2025, the market value proportion of active public funds heavily invested in pharmaceuticals was 8.0%, a decrease of 1.8 percentage points from the previous quarter, placing the allocation ratio at a relative low over the past five years. **Second, valuations have also entered a relatively low position.** The CSI 300 Pharmaceutical Index has fallen to a relatively low historical percentile (11%) over the past decade. **Third, there are signs of marginal improvement in fundamentals.** For example, the recovery of global innovative drug research and development activities has driven growth in CXO industry orders, and the domestic CRO industry is also showing a "volume increase and price stability" trend, with several leading CXO companies experiencing performance growth and raising their 2026 guidance. Additionally, as research pipelines enter a harvest period, several biotechnology companies have turned losses into profits, with signs of a profit inflection point emerging. At the same time, innovative drug overseas transactions remain active in 2026, which is expected to further support the fundamentals. **Tool-based allocation guide: What directions in pharmaceuticals are worth paying attention to in the future?** The above signals point towards the sector, but considering the uncertainty still facing the macro environment in the short term, the market is more likely to unfold in a "left-side layout + catalytic drive" oscillating upward manner, making it difficult to achieve a quick turnaround. Therefore, investment strategies should focus more on capturing structural opportunities. So, what specific structural opportunities can be emphasized? In summary, the main line of pharmaceutical investment still revolves around "innovation," but its connotation is continuously expanding. On one hand, innovative drugs and their industrial chains remain the most elastic and logically coherent direction, where attention can be focused on CXO companies with strong performance realization capabilities and optimized customer structures, as well as innovative drug companies that possess the triple logic of "performance realization + significant clinical data readout + technology platform." On the other hand, cutting-edge technologies such as AI drug development, gene therapy, and brain-computer interfaces are continuously breaking through; although some are still in the early stages, the long-term potential is enormous. At the same time, excellent companies in fields such as medical devices and raw materials are accelerating their "going overseas," and if they can open up a second growth curve, they are also worth continuous attention. However, for ordinary investors, investing in individual stocks in the pharmaceutical sector faces many challenges, with high tracking thresholds in pipeline, clinical, regulatory, and overseas order tracking aspects. Instead of chasing individual "blockbusters," it may be better to consider using ETFs to weave an investment network covering industry leaders To help investors efficiently allocate the aforementioned structural opportunities, E Fund provides a complete matrix of pharmaceutical index products, which includes index products that can represent the overall performance of the pharmaceutical market in the A-share, Hong Kong, and U.S. markets, as well as sub-sectors such as innovative drugs, biotechnology, and healthcare, to meet different risk preferences and allocation needs. **E Fund Pharmaceutical Product Line Layout** Data source: Wind, ETF scale data as of March 30, 2026, LOF scale data as of December 31, 2025. **Comparison of Pharmaceutical Index Tools** Faced with numerous choices, investors can understand the differences between various indices within the pharmaceutical product matrix from three dimensions: 1. Market Differences: The listing threshold for A-shares is high, with relatively stable company profits; stock prices mainly reflect domestic industrial policies and the domestic market, showing relatively stable trends. In contrast, the Hong Kong stock market, due to the 18A listing rules, gathers a large number of unprofitable biotechnology companies and innovative drug enterprises, making it more sensitive to international liquidity, R&D progress, and overseas data, resulting in greater elasticity and volatility. 2. Purity Differences: The Hong Kong Stock Connect Innovative Drug ETF E Fund (159316) has achieved 100% innovative drug purity by excluding CXO in its index compilation, while the A-share Innovative Drug ETF E Fund (516080) and the Hang Seng Biotechnology ETF include not only innovative drugs but also other segments of the innovative drug industry chain such as CXO. 3. Industry Coverage Differences: The pharmaceutical ETFs positioned as comprehensive pharmaceuticals and the Hong Kong Stock Connect Pharmaceutical ETF cover various sub-sectors of pharmaceuticals based on market capitalization ranking, with differences in industry distribution mainly stemming from the distribution of underlying assets in their respective markets. In contrast, indices focused on specific segments are more concentrated on the sub-sector they represent, with specific industry distributions shown in the table below: Data source: Wind, as of March 30, 2026. After clarifying the differences among various pharmaceutical indices, investors can gradually build an investment portfolio that aligns with their judgments (which market or sub-sector they are bullish on) like "building blocks," allowing for more efficient participation in the long-cycle investment of the pharmaceutical industry. For example: For investors who wish to invest more purely in Hong Kong biotech companies and capture the value re-evaluation opportunities brought by subsequent innovative drug overseas expansion and clinical data readouts, they can focus on the Hong Kong Stock Connect Innovative Drug ETF E Fund as a core allocation tool. For investors looking to grasp the marginal improvement logic of domestic CXO fundamentals, they can pay attention to the Hong Kong Stock Connect Medical ETF, Hang Seng Biotechnology ETF, and CSI Innovative Drug ETF, which cover innovative drug companies and CXO leaders in both A-shares and Hong Kong with one click For investors optimistic about the steady growth of medical devices and services, as well as the long-term logic of domestic substitution, they can pay attention to the pharmaceutical ETF, which allows for easy allocation to the core leaders in the pharmaceutical sector ### Related Stocks - [000913.CN](https://longbridge.com/en/quote/000913.CN.md) - [588860.CN](https://longbridge.com/en/quote/588860.CN.md) - [159837.CN](https://longbridge.com/en/quote/159837.CN.md) - [588130.CN](https://longbridge.com/en/quote/588130.CN.md) - [588250.CN](https://longbridge.com/en/quote/588250.CN.md) - [560600.CN](https://longbridge.com/en/quote/560600.CN.md) - [513120.CN](https://longbridge.com/en/quote/513120.CN.md) - [513060.CN](https://longbridge.com/en/quote/513060.CN.md) - [159859.CN](https://longbridge.com/en/quote/159859.CN.md) - [159316.CN](https://longbridge.com/en/quote/159316.CN.md) - [589720.CN](https://longbridge.com/en/quote/589720.CN.md) - [516500.CN](https://longbridge.com/en/quote/516500.CN.md) - [512290.CN](https://longbridge.com/en/quote/512290.CN.md) - [520880.CN](https://longbridge.com/en/quote/520880.CN.md) - [159892.CN](https://longbridge.com/en/quote/159892.CN.md) - [516930.CN](https://longbridge.com/en/quote/516930.CN.md) - [159102.CN](https://longbridge.com/en/quote/159102.CN.md) - [515120.CN](https://longbridge.com/en/quote/515120.CN.md) - [159506.CN](https://longbridge.com/en/quote/159506.CN.md) - [512010.CN](https://longbridge.com/en/quote/512010.CN.md) - [159992.CN](https://longbridge.com/en/quote/159992.CN.md) - [510660.CN](https://longbridge.com/en/quote/510660.CN.md) - [516820.CN](https://longbridge.com/en/quote/516820.CN.md) - [513700.CN](https://longbridge.com/en/quote/513700.CN.md) - [520690.CN](https://longbridge.com/en/quote/520690.CN.md) - [159849.CN](https://longbridge.com/en/quote/159849.CN.md) ## Related News & Research - [Analyst Reiterates Buy on Microbix, Citing Temporary China Slowdown and Growing Diversified Demand](https://longbridge.com/en/news/286665358.md) - [FDA approves FoundationOne CDx as TEPMETKO companion diagnostic in NSCLC](https://longbridge.com/en/news/287246470.md) - [Flow Pharma U.S. Patent Application Allowed for Issuance Covering Broad-Spectrum Ebola Therapy](https://longbridge.com/en/news/287076761.md) - [20:03 ETHarbour BioMed Announces Promising Preclinical Data for LET003, Its First AI-Enabled Drug Candidate](https://longbridge.com/en/news/286688082.md) - [Everest Medicines Director and Major Shareholder Raises Stake in Company](https://longbridge.com/en/news/286481551.md)