On July 24th, Hong Kong stocks fell again, with the Hang Seng Index dropping over 1%. Pharmaceutical stocks bucked the trend and moved higher, with innovative drug leaders pushing upward once more. The Hong Kong Stock Connect Innovative Drug ETF Huabao (520880), which is 100% focused on innovative drug R&D targets, saw a sharp intraday rally to turn positive, achieving its third consecutive daily gain against the broader market downturn.

Weighing stocks showed mixed performance. BEIGENE (ASX: 06160) rose over 4% at one point, hitting a new 3-month high. CSPC PHARMA (ASX: 01093) gained more than 5%, while AKESO (ASX: 09926), SINO BIOPHARM (ASX: 01177), and 3SBIO (ASX: 01530) traded in the red.

On July 23rd, BEIGENE announced an additional investment of $300 million to expand its flagship manufacturing facility and clinical R&D center located in the Princeton West Innovation Park in Hopewell, New Jersey, USA. This expansion will add small molecule drug production capacity. Analysts point out that if BEIGENE can achieve domestic production of its drug Zanubrutinib in the United States, it could, to some extent, mitigate the potential impact of tariff policies.

Since the start of July, the Hong Kong Stock Connect pharmaceutical sector has been showing a general trend of recovery. Zhongtai Securities noted that the pharmaceutical sector could become a key focus area for investors seeking undervalued, policy-supported, oversold defensive growth sectors amidst high valuation markets.

Northeast Securities also believes that with multiple fundamental factors converging, the bottom-firming and recovery rally for the innovative drug sector may have begun. They suggest that the window for value reassessment of core leaders in the Hong Kong Stock Connect innovative drug sector may have arrived, providing ample room for valuation upgrades.

Seize the opportunity of the Hong Kong Stock Connect pharmaceutical sector's rebound with two T+0 trading tools:

For a pure play on innovative drugs, focus on the Hong Kong Stock Connect Innovative Drug ETF Huabao (520880). It excludes CXO companies and is 100% allocated to innovative drug R&D companies, with over 70% of its positions concentrated in innovative drug leaders.

For a combined approach to "Innovative Drugs + CXO," choose the Hong Kong Stock Connect Medical ETF Huabao (159137). It allocates 50% to CXO and 20% to innovative drugs, with the remaining 30% invested in leaders from medical devices and AI healthcare.

Data sourced from the Shanghai, Shenzhen, and Hong Kong stock exchanges, CSI Index, and Hang Seng Index. Institutional views cited from: Northeast Securities Weekly Report on Medical and Health Industry: Focus on Bottom-Firming Inflection Point of Innovative Drug and Device Industry Chain; Guotai Junan Securities: Bullish on Innovative Drug Industry with Improving Trends and Clear Bottom Signals; Zhongtai Securities July Monthly Report on the Pharmaceutical and Biotech Industry.

Note: ETFs do not charge distribution fees. When investors subscribe for or redeem fund shares, the subscription/redemption broker may charge a commission of up to 0.5%, which includes fees charged by the stock exchange and registration institution. Refer to each fund's legal documents for detailed fee rates.

Risk Warning: The constituent stocks mentioned in the index are for display purposes only. Descriptions of individual stocks do not constitute investment advice in any form and do not represent the holdings or trading intentions of any fund under the management company. The management company assesses the risk level of the Hong Kong Stock Connect Medical ETF Huabao and its linked funds, as well as the Hong Kong Stock Connect Innovative Drug ETF Huabao and its linked funds, as R4-Medium to High Risk, suitable for aggressive (C4) and above investors. Any information appearing in this document (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors must be responsible for any investment decisions they make independently. Furthermore, any views, analyses, or forecasts herein do not constitute investment advice to readers and shall not be held liable for any direct or indirect losses arising from the use of the content herein. The performance of other funds managed by the management company does not constitute a guarantee of the fund's performance. Past performance of a fund does not represent its future performance. Fund investment carries risks.

Golden Cross Signal Formed, These Stocks Are Rising Strongly!

Massive Information, Precise Interpretation, Only on Sina Finance App

Editor: Chang Fuqiang