Hong Kong Stock Pharmaceutical Sector Strikes Back, Opportunities Emerging? Huabao Fund Hong Kong Stock Connect Innovative Medicine ETF (520880), Hong Kong Stock Connect Healthcare ETF Rise Over 2% Together to End Three-Day Losing Streak

On March 16, Hong Kong stocks made a strong rebound, with the healthcare sector leading the charge!

Innovative drugs took the lead, with the Hong Kong Stock Connect Innovation Drug ETF (520880) fluctuating upward throughout the day, closing up 2.95% at the intraday high, with a trading volume of 465 million yuan, up over 30% from the previous day.

In terms of constituent stocks, heavyweight leaders such as Kangfang Biotech, CSPC Pharmaceutical Group, and 3SBio all rose over 5%. A newly added stock, Changfeng Pharmaceutical, had its IND for a new drug treating pulmonary arterial hypertension accepted, with its stock price soaring close to 43% during trading.

The Hong Kong Stock Connect healthcare theme sector gained momentum in the afternoon, with rare internet healthcare leader JD Health jumping 5%, AI pharmaceutical leader Jintai Holdings rising over 4%, and the Hong Kong Stock Connect Healthcare ETF Huabao (159137) ending the three-day losing streak with a 2.04% increase on higher volume.

Data shows that the Hong Kong Stock Connect Healthcare ETF Huabao (159137) tracks the Hong Kong Stock Connect Healthcare Theme Index, which is designed to represent Hong Kong’s healthcare innovation. It heavily weights leading stocks in the innovative drug industry chain, while also covering hot topics like AI healthcare, brain-computer interfaces, and high-end medical devices. Among its 50 constituents, 41 are exclusively “A-shares with no Hong Kong counterparts,” highlighting its unique focus.

On the policy front, the 2026 government work report elevates the biopharmaceutical industry to a pillar industry on par with the low-altitude economy, integrated circuits, and aerospace. Orient Securities suggests paying attention to the long-term development of the biopharmaceutical sector, especially the rising status of innovative drug and medical device companies that focus on original innovation and pioneering efforts. Reforms in the payment system are already underway.

In news, on March 9, the first batch of Hong Kong Stock Connect targets for 2026 was officially adjusted, with 13 out of 42 newly added stocks being unprofitable biotech companies, accounting for 31%, setting a new record for biotech inclusion. Foreign institutions note that China’s biotech sector remains fundamentally stable, with innovation resilience being a long-term focus.

【Special Reminder for Rebalancing of Hong Kong Stock Connect Innovation Drug ETF (520880)】

On March 9, the Hong Kong Stock Connect Innovation Drug ETF (520880) index (Hang Seng Hong Kong Stock Connect Innovation Drug Select Index) underwent rebalancing, with 13 stocks removed and new ones added, increasing the total to 50. Post-rebalancing, the index’s relative advantage has been further strengthened:

Updated! Newly added innovation drug stocks are incorporated immediately, ahead of most similar indices.

More comprehensive! All 50 companies involved in innovative drug R&D are covered, making it the most complete Hong Kong Stock Connect index for innovative drug companies.

Data sources: China Securities Index Co., Ltd., Shanghai and Shenzhen-Hong Kong Stock Exchanges, etc. Institutional view: Orient Securities 20260310 “Weekly Report on Medical and Biotech Industry: Elevation of Biopharmaceutical Strategic Status; Long-term Structural Opportunities in Innovative Drugs, Devices, and Elderly Care Services.”

Note: ETF funds do not charge sales service fees. When investors subscribe or redeem fund units, the subscribing or redeeming broker may charge a commission up to 0.5%, which includes related fees from stock exchanges, registries, etc. For detailed fund rates, please refer to each fund’s legal documents.

Risk warning: The index constituents shown are for display purposes only. Descriptions of individual stocks are not investment advice and do not represent holdings or trading activity of any fund managed by the manager. The risk level of the Hong Kong Stock Connect Innovation Drug ETF and Hong Kong Stock Connect Healthcare ETF Huabao, as assessed by the fund manager, is R4—medium-high risk, suitable for active investors (C4) and above. All information in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any other statements) is for reference only. Investors are responsible for their own investment decisions. Additionally, any opinions, analyses, or forecasts in this article do not constitute investment advice and the fund manager is not responsible for any direct or indirect losses resulting from the use of this content. Performance of other funds managed by the fund manager does not guarantee future results, and past performance is not indicative of future performance. Investing involves risks.