Innovative pharmaceutical companies are experiencing rapid profit doubling, with Hong Kong Stock Connect's innovative drugs surging again, quickly hitting a 5% increase! Hong Kong Stock Connect Healthcare stocks are also rising simultaneously, with 159137 reaching a high of 4%.

On April 1, geopolitical conditions released signals of easing, global markets rebounded, Hong Kong stocks quickly rebounded, and pharmaceutical assets once again led the way! 100% innovative drug R&D targets—Huabao (520880) Hong Kong Stock Connect Innovative Drug ETF surged rapidly, hitting 5% up; Huabao (159137) Hong Kong Stock Connect Medical ETF, a core medical holding in Hong Kong stocks—topped out at 4%.

The uptrend in the Hong Kong Stock Connect Innovative Drug sector was especially strong. Leuprorelin Bio-B, AbSci, and Rongchang Bio teamed up to lead the gains, each up more than 10%. Weight leader stocks including Kangfang Bio, Innovent Biologics, and CSPC Group jumped more than 5%, while BeiGene surged more than 6%!

Driven by performance that exceeded expectations, the market rally is being strongly fueled. As of now, the Huabao (520880) Hong Kong Stock Connect Innovative Drug ETF has 47 constituent stocks that have released their 2025 annual reports, with 28 stocks turning profitable and 25 stocks showing year-over-year net profit growth of double digits.

Among them, there are as many as 10 constituent stocks with net profit doubling year over year: Simcere Pharmaceutical’s net profit surged more than 11 times year over year, Innovent Biologics increased by more than 9 times, and BeiGene—B, Sinheng Pharmaceutical, Nuoche Health, Four Rings Pharmaceutical, Leuprorelin Bio-B, Rongchang Bio, BeiGene, and CanSino Biologics all saw year-over-year net profit growth rates of over 100%!

Strong performance has validated that innovative drug companies are accelerating into the harvest period. Multiple institutions noted, “Firmly stick to the logic of the sector, and pay attention to opportunities in the bottom area!” In the secondary market, Hong Kong stocks’ pharmaceuticals entered a phase of consolidation since September last year. Currently, they are still in the lower phase. Investors can take positions early by focusing on core pharmaceutical assets in Hong Kong Stock Connect, and allocate with two major T+0 tools:

Invest in innovative drugs—choose Huabao (520880) Hong Kong Stock Connect Innovative Drug ETF, 100% allocate to companies engaged in innovative drug R&D. The top ten holdings account for more than 70%, highlighting its leader characteristics.

Invest in healthcare—choose Huabao (159137) Hong Kong Stock Connect Medical ETF, about 70% of the portfolio allocated to CXO+AI healthcare. It balances innovative drugs plus medical devices (including brain-computer interface technology). The top ten holdings include scarce internet healthcare leaders such as JD Health and Alibaba Health, among others.

Data source: CSI Index Company, Shanghai/Shenzhen/Hong Kong exchanges, etc. Note: ETF funds do not charge sales service fees. When investors apply for subscriptions or redeem fund shares, the subscription/redemption agent brokerages may charge commissions according to a standard not exceeding 0.5%, which includes fees charged by securities exchanges, registration institutions, and the like. For fund fee rates, please refer to each fund’s legal documents.

Risk warning: The index constituent stocks mentioned in the article are only for display purposes. Descriptions of individual stocks do not constitute any form of investment advice, nor do they represent the portfolio holdings and trading directions of any fund managed by the manager. The risk level assessed by the fund manager for the Hong Kong Stock Connect Innovative Drug ETF and Hong Kong Stock Connect Medical ETF—Huabao is R4—medium to high risk, suitable for aggressive investors (C4) and above. Any information appearing in this article (including but not limited to individual stocks, comments, predictions, charts, indicators, theories, and any forms of statements) is for reference only; investors must take responsibility for any investment decisions made independently. Also, any viewpoints, analyses, and predictions in this article do not constitute any form of investment advice to readers, nor do they bear any responsibility for direct or indirect losses arising from the use of the content in this article. The performance of other funds managed by the fund manager does not guarantee performance of the fund. Past performance of the fund does not represent its future performance. There are risks in investing in funds.

(Editor-in-charge: Dong Pingping ）

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