On May 21, in the Shanghai-Shenzhen-Hong Kong market, the innovative drug concept strengthened, with the Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 Index opening high in the morning, rising nearly 3%. As of 12:30, it was up 1.65%; the index has accumulated a rise of 40.25% for the entire year of 2025. As of May 20, 2026, the latest price-to-earnings ratio of the index is 29.26 times, at the historical 14.37% percentile, highlighting its cost-effectiveness.
The Tianhong Innovative Drugs ETF (517380) (Link A: 014564, Link C: 014565) is the only product in the market tracking this index, emphasizing its rarity.
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The innovative drug sector has recently been catalyzed by multiple favorable factors.
In terms of policy, on May 15, the &#34;Implementation Measures for the Protection of Drug Trial Data&#34; was implemented, clarifying that innovative drugs, improved new drugs, and first generic drugs enjoy trial data protection periods of 6 years, 4 years, and 3 years respectively, solidifying the institutional barriers for R&amp;D innovation.
In terms of orders, domestic innovative drug companies have entered a concentrated harvest period, with commercialization landing and overseas licensing working in synergy. In the first quarter of 2026, the NMPA approved 14 Class 1 new drugs (by generic name), of which 12 are domestic innovative drugs, continuously validating local R&amp;D capabilities. According to data from YaoMing Magic Cube, domestic pharmaceutical trading heat surged in the first quarter, with 98 transactions totaling USD 61.4 billion, and a down payment of USD 3.6 billion, steadily enhancing the global competitiveness of pharmaceutical companies.
A research report from Industrial Securities points out that the innovative drug sector has entered a period of intensive data catalysis. The 2026 ASCO (American Society of Clinical Oncology) Annual Meeting will be held from May 29 to June 3, which is expected to catalyze the sector's market. Future progress of already BD varieties can be a key focus; on one hand, they have stronger certainty compared to non-BD varieties, and on the other hand, various future developments will continue to provide catalysts, bringing valuation uplift potential.
The Tianhong Innovative Drugs ETF (517380) (Link A: 014564, Link C: 014565), as the only index product tracking the Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 Index, tracks 50 stocks from innovative drug-related companies listed in Shanghai, Shenzhen, and Hong Kong that have relatively high R&amp;D investment and better momentum performance. The index has distinct characteristics:
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<li>Cross-market layout, gathering leaders from Shanghai, Shenzhen, and Hong Kong</li>
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This index breaks the limitations of a single market, selecting 50 core assets of innovative drugs from A-shares and Hong Kong stocks, capturing industry leaders across different capital markets, resulting in a broader and more three-dimensional holding structure. The top ten weighted stocks include WuXi AppTec, HengRui Medicine, BeiGene, and Innovent Biologics, accounting for a total of 53.17%. (Data source: Wind, as of 2026.5.20)
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<li>Strictly select &#34;true innovation&#34; and balance the allocation of the entire industry chain</li>
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The index not only sets strict &#34;true innovation&#34; screening criteria (such as having innovative drugs already on the market or in clinical phase III and beyond), but also emphasizes two major dimensions in its selection logic: &#34;R&amp;D investment intensity&#34; and &#34;momentum performance,&#34; rather than simply ranking by market capitalization. This is fundamentally different from ordinary broad-based pharmaceutical indices, which include a large number of companies with lower innovation content, such as internet pharmacies, traditional generic drugs, and medical services. The Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 Index naturally excludes these &#34;pseudo-innovation&#34; components by focusing on R&amp;D investment, with a high proportion of revenue from innovative drug businesses among its constituent stocks.
According to CITIC Construction Investment's breakdown of the allocation of various innovative drug indices, the Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 Index has an allocation ratio of approximately 30%:30%:30% in the three sub-sectors of Biotech, CXO, and Pharma, making it the most balanced among similar indices.
<ol>
<li>Further optimization of quantitative indicators</li>
</ol>
In addition to R&amp;D investment intensity, another important reference for stock selection in the index—momentum performance—is measured based on six operational performance indicators, alpha returns, and residual returns. This compilation method aims to achieve overall industry returns while striving to obtain excess returns through quantitative means.
<img src="https://imageproxy.pbkrs.com/https://tongbi-app.oss-cn-shanghai.aliyuncs.com/word/media/2a0931c6a02d4ed290ad0cd2326b44d6.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://tongbi-app.oss-cn-shanghai.aliyuncs.com/word/media/2a0931c6a02d4ed290ad0cd2326b44d6.png"/>
In terms of fees, Tianhong Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 ETF Connect A (Class A: 014564, Class C: 014565) has an annual management fee of 0.50% and a custody fee of 0.10%; additionally, the Class A subscription fee is 1% (sales channels usually offer a 10% discount), and the redemption fee drops to 0.05% if held for more than 30 days; Class C has no subscription or redemption fees, with an annual sales service fee of 0.20%. For long-term holding, Class A has better rates; for short-term trading or regular investment, Class C is more flexible. Please refer to the final rates as announced by the sales channels.
Related products:
Tianhong Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 ETF Initiated Connect A (014564)
Tianhong Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 ETF Initiated Connect C (014565)

517380

On May 21st, the innovative drug sector performed strongly in the Shanghai-Shenzhen-Hong Kong market, with the Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs 50 Index rising nearly 3%, and it is expected to have a cumulative increase of over 40% by 2025. The Tianhong Innovative Drug ETF is the only product tracking this index, with a price-to-earnings ratio at a historical low. Policy support and the concentrated harvest period for domestic innovative pharmaceutical companies bring favorable conditions to the sector, and it is expected that more catalysts will drive valuation increases in the future

同壁财经

Tianhong Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 ETF

INDUSTRIAL SECURITIES

WuXi AppTec

SLD GROUP

Hengrui Pharma

BeOne Medicines

BEONE MEDICINES

Beigene

INNOVENT BIO

WUXI APPTEC

The innovative drug sector has risen from a low position, and Tianhong Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Selected 50 ETF Connect A (014564) gathers leading companies from Shanghai, Shenzhen, and Hong Kong. The index has accumulated a rise of over 40% by 2025, with a valuation at only 14% of its historical percentile