The "top player in innovative drugs" leads the charge as Hong Kong's biotech sector stages a strong rebound! On November 12, the HK Stock Connect Innovative Drug ETF (520880), which holds 100% innovative drug stocks, opened higher and quickly surged 3% before consolidating at elevated levels in the afternoon session. It closed up 2.73% with soaring popularity, recording a daily turnover of 591 million yuan—a 160% surge from the previous day.
Leading innovative drug companies drove the rally, with all top ten weighted stocks in the ETF's underlying index closing in positive territory. Top player BeiGene (06160.HK) soared 8.8% intraday, hitting a three-year high! Second-ranked Innovent Biologics (01801.HK) rose 2.23%, while Sansheng Pharmaceuticals (01530.HK) and Kelun-Biotech (06978.HK) jumped 5% and 4.8%, respectively.
Technical indicators flashed bullish signals: The ETF broke through its 5-day, 10-day, and 20-day moving averages with heavy volume. Coupled with expanding MACD red bars, upward momentum appears to be strengthening. Fund manager Feng Chencheng has repeatedly noted that the innovative drug rally could ignite at any time.
BeiGene's six-day winning streak was likely supported by fundamentals. According to its earnings report, the company's Q3 2025 revenue reached $1.4 billion, up 41% YoY and beating expectations. Its self-developed drug Zanubrutinib was the primary driver, with quarterly sales surpassing $1 billion for the first time (up 50.8% YoY), marking three consecutive quarters of GAAP profitability.
Industry-wise, Pfizer's $10 billion acquisition of obesity drug developer Metsera highlighted intensifying competition among multinational pharma giants for cutting-edge pipelines. Analysts note this elevates the出海 (global expansion) appeal of Chinese innovators with strong R&D capabilities and differentiated pipelines, suggesting potential for above-expectation BD deals ahead.
Looking forward, manager Feng Chencheng observes that year-end typically sees peak M&A activity in U.S. biotech, with additional catalysts from January's JPM Healthcare Conference. Combined with China's supportive醫保 (reimbursement) policies for innovative drugs and potential Fed rate cuts, upside potential now outweighs downside risks (with leaders already trading at absolute value levels), making this a high-probability window to accumulate positions.
How to invest? The HK Stock Connect Innovative Drug ETF (520880)—the largest of its kind—and its feeder fund (025221) track the Hang Seng HK Stock Connect Innovative Drug Selection Index, which offers three advantages: 1. Pure-play exposure (no CXO stocks) to innovative drug R&D firms. 2. Heavy concentration (71%+ weight) in top innovators. 3. Risk control via liquidity-based constituent adjustments to mitigate tail risks.
Data shows the ETF surpassed 2 billion yuan in AUM on November 3, with average daily turnover of 474 million yuan since listing—leading its peer group in size and liquidity.
Risk Disclosure: The ETF passively tracks an index launched on July 17, 2023 (base date: December 31, 2020). Annual index returns: 2021 (-22.72%), 2022 (-16.48%), 2023 (-19.76%), 2024 (-14.16%). Past performance doesn't guarantee future results. Stock mentions aren't recommendations or indicative of fund holdings. The ETF carries R4 (high-risk) suitability for aggressive (C4+) investors.