The 2025 pharmaceutical annual report releases positive signals, and the sector's development logic may be further solidified.

As of March 24, according to Wind data, among companies in the Shenwan Biopharmaceutical sector that have already disclosed their annual reports, more than 70% are profitable, showing a certain rebound momentum. Based on comprehensive institutional research reports, driven by multiple factors such as earnings realization, accelerated R&D, and undervaluation of the sector, the biopharmaceutical sector—and especially the long-term attention value of the innovative drug track—is continuing to stand out. (Data source: Wind, as of 2026.3.24, Shenwan Level-1 industry classification)

I. Annual Report Snapshot: Data Validates the Quality of the Biopharmaceutical Rebound

According to Wind data, as of March 24, 2026, among the Shenwan Biopharmaceutical sector companies in the A-share market, 169 companies had already disclosed their 2025 annual reports. Of these, 121 companies have positive net profit attributable to shareholders, accounting for more than 70%; 77 companies saw year-over-year growth in net profit attributable to shareholders, and 20 companies had a year-over-year net profit growth rate exceeding 100%, demonstrating that the sector’s overall profitability recovery and structural differentiation coexist. (Data source: Wind, as of 2026.3.24, Shenwan Level-1 industry classification)

Some institutions have pointed out that from March to April this year is the performance disclosure window for innovative drug companies. Several pharmaceutical companies are expected to see reduced losses or turnaround to profitability. The institutions expect that in 2026, more innovative drug companies may significantly release profits. As the loss-turnaround milestones for innovative drug companies arrive—together with dense catalysts from full-year clinical data, successful overseas clinical progress in already-BD’d overseas pipelines, and more—the institution said it is optimistic about opportunities in the innovative drug sector. (Reference: Guojin Securities’ “Anchoring ‘Emerging Pillar Industries’—Looking Favorably at Investment Opportunities in New Drug Sector,” 2026.3.8)

II. Dense R&D Innovation Moves into Execution, Commercialization Conversion Speeds Up

Since 2026, R&D innovation momentum in China’s pharmaceutical industry has continued to build. A-share pharmaceutical companies have successively disclosed R&D progress announcements, stating that their products have achieved phased results in areas such as clinical trial approvals, acceptance of marketing authorization applications, and approvals of drug registration certificates—covering multiple therapeutic areas including anti-infectives, drugs for high blood lipids, analgesia, inflammation, and immunology/autoimmune conditions.

Some analysts believe that the smooth commercialization of pharmaceutical companies’ R&D achievements has a significant multiplier effect on improving their own financial structure, and may become a core lever driving earnings quality improvement and valuation reshaping. The core value of commercialization of R&D achievements is first reflected in the direct incremental contribution on the revenue side, which can quickly open up market monetization channels and continuously optimize companies’ revenue structure. Institutions expect that in 2026, the deployment pace of R&D achievements in the pharmaceutical industry may show a “innovative drugs accelerating, generics improving in quality” dual-track parallel trend.

(Reference: Securities Daily, “Listed Pharmaceutical Companies Continue to Strengthen R&D—Multiple Pharmaceutical Results Receive Approvals and Advance Ongoing Progress,” 2026.3.19)

III. Innovation Drug Sector: Ample Funding and Strong Sustainability of R&D Investment

At present, BD income and post-listing fundraising provide funding support for innovative drug companies’ R&D. On the one hand, according to Wind data, from January 1, 2024 to March 21, 2026, post-listing fundraising in the Hong Kong and A-share biopharmaceutical sectors totals about USD 7 billion, supporting innovation drug pipeline R&D investment. On the other hand, as of March 21, 2026, the total BD package deals for China’s innovative drug exports have already reached USD 57.1 billion, and BD income has become an important source of funding for China’s innovative drug companies.

An institution said that currently, the pharmaceutical sector has ample liquidity. Most companies still maintain the ability to cover R&D funding for more than one year, which can effectively support the advancement of subsequent clinical trials, pipeline expansion, and technological innovation, laying a solid financial foundation for the industry’s long-term high-quality development. It also provides sufficient time windows for technological breakthroughs and commercialization conversion for innovative drug companies.

(Reference: Soochow Securities’ “Pharmaceutical Biopharma Weekly: BD Expansion and Further Financing—Innovation Drug Leaders Have Ample Cash Flow,” 2026.3.22)

IV. The Innovative Drug Sector: Value-for-Money Visibility May Be Standout

After experiencing a round of gains in 2025, the innovative drug sector has undergone adjustments lasting more than half a year since the end of the third quarter last year, and valuation risks have been released fairly fully. Looking at a longer time horizon, according to Wind data, as of March 24, 2026, the current PE (TTM) of the CSI Innovation Drug Industry Index and the CSI Hong Kong Innovation Drug Index is 40x and 41x, respectively. They are positioned at the 38.05% and 39.84% percentiles from low to high over the past five years, indicating a certain degree of value-for-money. (Data source: Wind; for the innovative drug sector’s rise range from 2025.1.1 to 2025.9.8, and the pullback range from 2025.9.9 to 2026.3.26; percentile statistics range for the current PE (TTM) of the CSI Innovation Drug Industry Index and the CSI Hong Kong Innovation Drug Index: 2021.3.25 to 2026.3.24; CSI Innovation Drug Industry Index code 931152.CSI, CSI Hong Kong Innovation Drug Index code 931787.CSI)

For investors who are optimistic about the innovative drug track but find it difficult to grasp individual-stock volatility, they may consider following the trend through index-based tools, or in a relatively efficient and transparent manner. Investors may consider Hong Kong-listed innovation drug ETFs (159567) and their connected funds (Class A: 023929, Class C: 023930), as well as Innovation Drug ETFs (159992) and their connected funds (Class A: 012781; Class C: 012782), aiming to share the long-term growth dividends of the innovative drug industry.

Risk Warning:

Hong Kong-listed innovation drug ETF fee structure

1. Subscription/redemption fees:

When investors subscribe or redeem fund units, subscription/redemption intermediary securities brokers may charge a commission not exceeding 0.5%. This includes relevant fees charged by the securities exchanges, registration institutions, and others.

2. Management fee rate:

The fund’s management fee is accrued at an annual rate of 0.50% of the fund assets’ net value as of the previous day. The management fee is accrued daily, accumulated to the end of each month, paid monthly. After verification by both the fund manager and the fund custodian with no discrepancies, the fund custodian will, within five business days from the beginning of the next month, pay the accrued amount from the fund assets to the fund manager in a lump sum in a manner consistent with the agreement reached with the fund manager. If payment cannot be made on time due to statutory holidays, rest days, or force majeure, the payment will be deferred to the nearest date on which payment can be made.

3. Custody fee rate

The fund’s custody fee is accrued at an annual rate of 0.10% of the fund assets’ net value as of the previous day. The custody fee is accrued daily, accumulated to the end of each month, and paid monthly. After verification by both the fund manager and the fund custodian with no discrepancies, the fund custodian will, within five business days from the beginning of the next month, withdraw the accrued amount in a lump sum from the fund assets in the manner consistent with the agreement reached with the fund manager. If payment cannot be made on time due to statutory holidays, rest days, or force majeure, the payment will be deferred to the nearest date on which payment can be made.

4. Comprehensive fund operating expenses

If an investor subscribes/participates in subscribing for the fund’s units, during the holding period, the operating fee rate to be paid by the investor is as follows: the fund’s comprehensive operating fee rate (annualized) is 0.72%.

Note: The fund management fee rate, custody fee rate, and sales service fee rate (if any) are the current fee rates of the fund. Other operating expenses are calculated based on relevant data disclosed in the most recent fund annual report.

Reference material: Fund Product Information Summary, as of 2025.12.5

Yinves U.S. Innovation Drug ETF (via Stock Connect Hong Kong) launch-style connected fund fee structure

1. Subscription fee

For subscriptions of the fund’s Class A fund units through other sales agencies, the applicable subscription fee rates are as follows: for subscription amount M < 1 million yuan, subscription fee rate is 1.00%; for 1 million yuan ≤ M < 2 million yuan, subscription fee rate is 0.80%; for 2 million yuan ≤ M < 5 million yuan, subscription fee rate is 0.50%; for subscription amount M ≥ 5 million yuan, subscription fee is charged as a fixed amount per transaction: 1,000 yuan per transaction.

2. Subscription fees

The Fund’s Class A fund units are charged a fund subscription fee at the time of subscription; Class C fund units do not charge a subscription fee. The fund subscription fee is charged when investors subscribe for Class A fund units. The subscription fee for Class A fund units is borne by investors subscribing for Class A units of this fund, and is mainly used for expenses such as marketing, sales, and registration of this fund, and is not included in the fund assets. If an investor submits multiple subscription transactions within a single day, the applicable fee rate is calculated separately for each transaction. The details are as follows: for subscription amount M < 1 million yuan, subscription fee rate is 1.20%; for 1 million yuan ≤ M < 2 million yuan, subscription fee rate is 0.90%; for 2 million yuan ≤ M < 5 million yuan, subscription fee rate is 0.60%; for subscription amount M ≥ 5 million yuan, subscription fee is charged as a fixed amount per transaction: 1,000 yuan per transaction.

3. Redemption fees

Redemption fees for this fund are borne by the holders of fund units of the various classes when they redeem the corresponding class of units. The portion of redemption fees that is not included in fund assets is used to pay registration fees and other necessary transaction fees.

(1) Redemption fee rate for Class A fund units

For investors who continuously hold Class A fund units for less than 30 days, the redemption fee will be fully included in the fund assets. The redemption fee rate for this fund’s Class A fund units is tiered based on the holding period length as follows: when the holding period Y < 7 days, the redemption fee rate is 1.50%; when 7 days ≤ Y < 30 days, the redemption fee rate is 0.50%; when Y ≥ 30 days, the redemption fee rate is 0.

(2) Redemption fee rate for Class C fund units

For investors who continuously hold Class C fund units for less than 7 days, the redemption fee rate is 1.50%, and the redemption fees will be fully included in fund assets. The redemption fee rate for this fund’s Class C fund units is tiered based on the holding period length as follows: when the holding period Y < 7 days, the redemption fee rate is 1.50%; when Y ≥ 7 days, the redemption fee rate is 0.

4. Management fee

The portion of this fund’s assets invested in the target ETF is not charged a management fee. The management fee is accrued at an annual rate of 0.50% based on the balance of the fund’s asset net value as of the previous day after deducting the net value of the target ETF fund units held by the fund (if the balance is negative, take 0).

5. Custody fee

The portion of this fund’s assets invested in the target ETF is not charged a custody fee. The custody fee is accrued at an annual rate of 0.10% based on the balance of the fund’s asset net value as of the previous day after deducting the net value of the target ETF fund units held by the fund (if the balance is negative, take 0).

6. Sales service fee

This fund does not charge a sales service fee for Class A units; the sales service fee for Class C units is accrued at an annual rate of 0.20% of the net asset value of Class C units as of the previous day.

For other fees, please refer to the “Fund Fees and Taxes” section of the fund prospectus.

Reference material: Fund Product Information Summary, as of 2025.4.9

Innovation Drug ETF fee structure

1. Subscription/redemption fees:

When investors subscribe or redeem fund units, subscription/redemption intermediary securities brokers may charge a commission not exceeding 0.5%. This includes relevant fees charged by the securities exchanges, registration institutions, and others.

2. Management fee rate:

The fund’s management fee is accrued at an annual rate of 0.50% of the fund assets’ net value as of the previous day. The management fee is accrued daily, accumulated to the end of each month, paid monthly. After verification by both the fund manager and the fund custodian with no discrepancies, the fund custodian will, within five business days from the beginning of the next month, pay the accrued amount in a lump sum from the fund assets to the fund manager in a manner consistent with the agreement reached with the fund manager. If payment cannot be made on time due to statutory holidays, rest days, or force majeure, the payment will be deferred to the nearest date on which payment can be made.

3. Custody fee rate:

The fund’s custody fee is accrued at an annual rate of 0.05% of the fund assets’ net value as of the previous day. The custody fee is accrued daily, accumulated to the end of each month, and paid monthly. After verification by both the fund manager and the fund custodian with no discrepancies, the fund custodian will, within five business days from the beginning of the next month, withdraw the accrued amount in a lump sum from the fund assets in a manner consistent with the agreement reached with the fund manager. If payment cannot be made on time due to statutory holidays, rest days, or force majeure, the payment will be deferred to the nearest date on which payment can be made.

Reference material: Fund Product Information Summary, as of 2026.2.13

Yinves CSI Innovation Drug Industry ETF launch-style connected fund fee structure

1. Subscription fee

For Class A fund units, this fund charges a subscription fee at the time of subscription; Class C fund units do not charge a subscription fee. The subscription fee rates applicable to investors subscribing for the fund’s Class A units are shown as follows: when the subscription amount M < 1 million yuan, the subscription fee rate is 1.20%; when 1 million yuan ≤ M < 3 million yuan, the subscription fee rate is 1.00%; when 3 million yuan ≤ M < 5 million yuan, the subscription fee rate is 0.60%; when the subscription amount M ≥ 5 million yuan, the subscription fee is charged as a fixed amount per transaction, 1,000 yuan per transaction.

2. Redemption fees

Redemption fees for this fund are borne by the holders of fund units of this fund. The redemption fees are collected when the unit holders redeem the corresponding fund units. The portion of redemption fees that is not included in fund assets is used to pay registration fees and other necessary transaction fees.

(1) Redemption fee rate for Class A fund units

For investors who continuously hold Class A fund units for less than 30 days, the redemption fee charged by this fund will be fully included in fund assets. The redemption fee rate for Class A fund units is tiered based on the holding period length as follows: when the holding period Y < 7 days, the redemption fee rate is 1.50%; when 7 days ≤ Y < 30 days, the redemption fee rate is 0.75%; when 30 days ≤ Y < 365 days, the redemption fee rate is 0.50%; when 365 days ≤ Y < 730 days, the redemption fee rate is 0.30%; when Y ≥ 730 days, the redemption fee rate is 0.

(2) Redemption fee rate for Class C fund units

For investors who continuously hold Class C fund units for less than 7 days, the redemption fee rate is 1.50%, and the redemption fees will be fully included in fund assets. The redemption fee rate for Class C fund units is tiered based on the holding period length as follows: when the holding period Y < 7 days, the redemption fee rate is 1.50%; when Y ≥ 7 days, the redemption fee rate is 0.

3. Management fee

The portion of this fund’s assets invested in the target ETF is not charged a management fee. The management fee is accrued at an annual rate of 0.50% based on the balance of the fund’s asset net value as of the previous day after deducting the net asset value of the target ETF fund units held by the fund.

4. Custody fee

The portion of this fund’s assets invested in the target ETF is not charged a custody fee. The custody fee is accrued at an annual rate of 0.05% based on the balance of the fund’s asset net value as of the previous day after deducting the net asset value of the target ETF fund units held by the fund.

6. Sales service fee

This fund does not charge a sales service fee for Class A units; the sales service fee for Class C units is accrued at an annual rate of 0.10% of the net asset value of Class C units as of the previous day.

For other fees, please refer to the “Fund Fees and Taxes” section of the fund prospectus.

Reference material: Fund Product Information Summary, as of 2025.12.19

Investing involves risk. Investors should be cautious. A fund is a long-term investment tool. Its main function is to diversify investments and reduce individual risks arising from investing in a single security. A fund differs from financial instruments such as bank savings that can provide a fixed-income expectation. When you buy a fund product, you may share gains generated by the fund’s investments based on the units you hold, but you may also bear losses brought by the fund’s investments.

Before making an investment decision, please carefully read product legal documents and this risk disclosure statement, such as the fund contract, the fund prospectus, and the fund product information summary, to fully understand the risk-return characteristics and product features of this fund. Consider seriously all the various risk factors existing for this fund, and based on factors such as your investment objectives, investment horizon, investment experience, and asset situation, fully consider your own ability to bear risk. After understanding the product information and sales appropriateness opinions, make a rational judgment and make an investment decision cautiously.

Pursuant to relevant laws and regulations, Yinves Fund Management Co., Ltd. makes the following risk disclosures:

I. Based on differences in investment targets, funds are divided into different types such as equity funds, hybrid funds, bond funds, money market funds, fund-of-funds, commodity funds, etc. If you invest in different types of funds, you will have different expected returns and bear different levels of risk. Generally speaking, the higher the fund’s expected returns, the greater the risk you bear.

II. During the course of fund investment and operations, the fund may face various risks, including market risk as well as the fund’s own management risk, technical risk, compliance risk, and so on. The risk of large redemptions is a specific type of risk unique to open-ended funds. That is, when the net redemption application on a single open day exceeds a certain proportion of the fund’s total units (open-ended funds are 10%, closed open-ended funds are 20%, excluding special products as required by the China Securities Regulatory Commission), you may not be able to redeem all fund units in a timely manner, or the redemption proceeds you receive may be delayed in payment.

III. You should fully understand the differences between regular fixed-amount investment in funds and savings methods such as zero-balance installment savings (零存整取). Regular fixed-amount investment guides investors to make long-term investments and average investment costs through a simple and feasible method, but it cannot avoid risks inherent in fund investments; it cannot guarantee that investors will obtain returns, nor is it an equivalent wealth management method that replaces savings.

IV. Risk disclosure for special types of products:

1. Please pay attention to risks related to fluctuations in the underlying index and the unique risks of investing in ETFs (exchange-traded open-ended funds). For connected funds investing in the underlying ETF, investors should pay attention to the unique risks of connected fund investments, such as tracking deviation risk, risk arising from performance differences between the connected fund and the target ETF, risk of other investments in the target ETF, and risk that tracking error control may not meet the agreed target, among other unique risks.

2. The Hong Kong-listed innovation drug ETF and its connected funds may invest in Hong Kong Connect eligible stocks. They will face specific risks arising from differences under the Hong Kong Connect mechanism, including the investment environment, investment underlying assets, market systems, and trading rules.

V. The fund manager commits to managing and utilizing fund assets according to the principles of honesty and creditworthiness, and diligence and responsibility, but does not guarantee that this fund will definitely be profitable, nor does it guarantee minimum returns. The fund’s past performance and whether its NAV has been high or low do not predict its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of this fund’s performance. Yinves Fund Management Co., Ltd. reminds you of the “buyer bears responsibility” principle for investing in funds. After making an investment decision, the investment risks arising from the fund’s operating situation and changes in the fund’s net value will be borne by you. The fund manager, the fund custodian, fund sales institutions, and relevant organizations make no promises or guarantees regarding fund investment returns.

VI. This fund is established by Yinves Fund Management Co., Ltd. for public offering in accordance with relevant laws and regulations and the agreed arrangements, and is permitted for registration by the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”). The fund contract, the fund prospectus, and the fund product information summary of this fund have been published on the CSRC’s fund electronic disclosure website

This article is an enterprise submission | Wealth management involves risk; invest with caution

(Editor: Xu Nannan)

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