Profits are being realized, a massive counterattack is underway! Stock Connect's innovative drug sector is completely boiling over, 520880 is surging on heavy volume, aiming for a 5% gain!
On the afternoon of March 27, A+H innovative drug stocks showed strong momentum and continued to advance. The 100% innovative drug R&D target — Huabao's Hong Kong Stock Connect Innovative Drug ETF (520880) saw its afternoon gains surge to nearly 5%, with turnover exceeding 500 million yuan, far surpassing the previous day's full-day volume! Huabao's Pharmaceutical ETF (562050), which heavily invests in A-share innovative drug stocks, also gained over 4%.
In terms of individual stocks, among the 50 constituent stocks of Huabao's Hong Kong Stock Connect Innovative Drug ETF (520880), over 45 were in the green. The heavyweight leader CSPC Pharmaceutical Group surged 13%, breaking through five moving averages consecutively. Stocks like BioMap-B, Everest Medicines, InSilico Medicine, and CARsgen Therapeutics-B gained over 10%. Innovent Biologics turned profitable in 2025 and jumped nearly 8% after its earnings report.
As of now, 30 constituent stocks of Huabao's Hong Kong Stock Connect Innovative Drug ETF (520880) have released their 2025 annual reports. Among them, 17 innovative drug R&D companies achieved profitability, 16 saw net profit grow by double digits year-on-year, 6 had year-on-year growth rates exceeding 100%, with the highest increase exceeding 11 times!
Institutions believe that the window for left-side allocation in the innovative drug sector is clear. March to April will enter a period of intensive catalysts, with industry conferences like AACR and ASCO overlapping with the release of annual and Q1 reports, which is expected to drive sector valuation recovery. Platform-based biopharma companies and those with normalized BD revenue have higher winning rates and greater elasticity, showing significant long-term investment value.
Data shows that as of March 21, the total value of China's innovative drug outbound BD deals in 2026 has reached 57.1 billion USD, with an upfront payment of 3.3 billion USD across 53 deals. The total value is equivalent to 41% of the full year 2025 and has already exceeded the full year 2024 level.
In the secondary market, the current adjustment in AH innovative drug stocks has lasted for two quarters, making the current investment value proposition prominent. To seize the opportunity for a counterattack in innovative drugs at low levels, focus on two powerful tools:
Invest solely in innovative drugs with Huabao's Hong Kong Stock Connect Innovative Drug ETF (520880). It allocates 100% to innovative drug R&D companies, with the top ten holdings accounting for over 70%, highlighting its leading attributes. Its underlying assets are Hong Kong stocks, featuring high elasticity and the advantage of T+0 trading.
For those hoping to reduce volatility, choose Huabao's Pharmaceutical ETF (562050). Its unique "70% innovative drugs + 30% traditional Chinese medicine" allocation is a scarce target in the entire market, combining the high growth of innovative drugs with the high dividends of traditional Chinese medicine, capable of rising while resisting declines, offering both offense and defense.
Data source: China Securities Index Co., Ltd., Shanghai, Shenzhen, and Hong Kong exchanges, etc.
Note: ETF funds do not charge sales service fees. When investors subscribe for or redeem fund units, subscription and redemption agents may charge a commission not exceeding 0.5%, which includes related fees charged by stock exchanges, registration institutions, etc. For detailed fund fee rates, please refer to the respective fund's legal documents.
Risk Disclosure: The index constituent stocks mentioned herein are for display only. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading trends of any fund under the management company. The fund manager assesses the risk rating of Huabao's Hong Kong Stock Connect Innovative Drug ETF and Hong Kong Stock Connect Healthcare ETF as R4 - Medium to High Risk, suitable for aggressive (C4) and above investors. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, expressions of any form, etc.) is for reference only. Investors are responsible for any investment decisions made independently. Furthermore, any views, analyses, and forecasts in this article do not constitute investment advice of any form to readers, nor do they bear any responsibility for direct or indirect losses arising from the use of this article's content. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past fund performance does not indicate future results. Fund investment involves risks.
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