On August 12, the previously rising Hong Kong-listed innovative drug supply chain experienced a correction. The medical-themed sector in Hong Kong Stock Connect traded sideways below the waterline, with heavyweight stocks JD Health and Ali Health falling over 1%.
Driven by performance realization and the AI drug discovery concept, the CXO sector showed strong resilience. WuXi Biologics, WuXi AppTec, and WuXi XDC rose against the market trend, while Genscript Biotech continued to gain over 1%. The Huabao Hong Kong Stock Connect Medical ETF (159137), which has a CXO weight exceeding 50%, staged a V-shaped recovery during intraday trading, after its on-exchange price just hit a five-month high the previous day.
Leading Hong Kong-listed innovative drug stocks largely turned lower. BeiGene fell 2%, ending its six-day winning streak, while Hansoh Pharmaceutical dropped over 3%. In contrast, Zai Lab extended its gains, with its share price reaching a new year-to-date high. The Huabao Hong Kong Stock Connect Innovative Drug ETF (520880), which invests 100% in innovative drug research targets, surged and then fell, now down 1% and losing its position above the half-year moving average again.
Since August, a flurry of positive developments for innovative drugs and their supply chain has driven a sustained "pharmaceutical rally". During this period, market attention on the pharmaceutical and biotech sector has surged significantly. Last week, research activity in the pharmaceutical and biotech sector surpassed that of the electronics sector, with public fund firms conducting 104 research visits, ranking first among all Shenwan primary industries, and the number of visits was nearly double that of the second-ranked automotive industry.
In terms of individual stocks, among the top ten most researched stocks by public funds last week, pharmaceutical and biotech companies occupied three spots: BeiGene, Zelgen Pharmaceuticals, and Zhejiang Jiuzhou Pharmaceutical.
Industry analysts noted that the pharmaceutical sector's valuations and institutional holdings remain at historically low levels, combined with ample growth potential, making the sector's allocation value significant. This has attracted active research efforts from multiple public fund firms. At the current stage, the correction in the innovative drug supply chain may present a favorable allocation opportunity.
Southwest Securities pointed out that, from an industry perspective, attention should be focused on the triple resonance of innovative drug performance realization, clinical data, and overseas expansion from August to September. Regarding clinical data, key research and development milestones include the WCLC 2026 (September) and ESMO 2026 (October) meetings.
Data sourced from the Shanghai, Shenzhen, and Hong Kong exchanges, CSI Index Company, and Hang Seng Index Company. Weight data is from the ETF fund PCF list, as of August 10, 2026. Institutional views are sourced from Southwest Securities' "Pharmaceutical Industry Weekly Report (August 3-7): Pharmaceutical Sector Sentiment Recovers, Focus on Two Major Directions: Technology and Innovative Drugs."
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Risk Disclosure: The constituent stocks in the index mentioned in this article are for display purposes only. Descriptions of individual stocks do not constitute investment advice of any kind, nor do they represent the holdings or trading activities of any fund under the management company. The fund manager estimates the risk level of the Pharmaceutical ETF Huabao as R3-medium risk, suitable for balanced (C3) and above investors. The risk level of the Hong Kong Stock Connect Medical ETF Huabao, the Hong Kong Stock Connect Innovative Drug ETF Huabao, and their linked funds is 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 must be responsible for their own investment decisions. Additionally, any views, analyses, or forecasts in this article do not constitute investment advice to readers of any form, nor are they responsible for any 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, and past performance of the fund does not represent its future performance. Fund investment carries risks. MACD golden cross signal forms, these stocks are showing strong momentum!