On February 10, Hong Kong's healthcare sector continued its upward trajectory. The innovative drug industry chain maintained strong momentum, led by Innovent Biologics. The Hong Kong Stock Connect Innovative Drug ETF (520880), which offers 100% exposure to innovative drug companies, climbed as much as 3.86% intraday and closed 2.9% higher, reclaiming its 20-day moving average. Trading volume was substantial, with turnover reaching 590 million yuan. Meanwhile, the Huabao Hong Kong Stock Connect Healthcare ETF (159137), which has significant exposure to CXO firms, rose 2.1%, marking its sixth consecutive day of gains.
The accelerated recovery of Hong Kong-listed innovative drug stocks is primarily driven by two core factors: the acceleration of overseas business development partnerships and the realization of commercial revenues. 1. Overseas expansion of Chinese innovative drugs remains highly active. Since 2026, the trend of Chinese innovative drugs going global has continued the strong momentum seen in 2025, with several major BD deals being finalized. On February 8, Innovent Biologics announced its seventh global strategic collaboration with Eli Lilly, with a total potential deal value of up to $8.85 billion, including an upfront payment of $350 million. In January, CSPC Pharmaceutical Group entered a platform-level collaboration with AstraZeneca valued at up to $18.5 billion, while RemeGen Co. signed a licensing agreement with AbbVie worth $5.6 billion, highlighting the global competitiveness of China's innovative drug sector. 2. Chinese innovative drugs are entering a phase of commercial harvest. In 2025, over 70% of innovative drug companies reported positive revenue growth. BeiGene's revenue exceeded 36 billion yuan, demonstrating strong commercial capabilities. Profitability is also gradually emerging, with leading firms like InnoCare Pharma and RemeGen Co. achieving annual breakeven for the first time. Allist Pharmaceuticals reported an annual net profit attributable to shareholders of over 2 billion yuan. The innovative drug industry is progressively moving beyond the R&D investment phase and entering a new stage of financial performance delivery.
Kaiyuan Securities stated that China's innovative drug sector is experiencing dual breakthroughs in commercialization and internationalization. Overall, the firm maintains a positive outlook on innovative drugs and their industrial chain (including CXO and research services), as well as strategically important emerging industries like AI, brain-computer interfaces, and biomanufacturing. Recent valuations of leading companies appear attractive, suggesting a favorable focus at current levels.
The Hong Kong healthcare sector has been adjusting for nearly two quarters, and current levels present attractive investment value. Accumulating core healthcare assets at low prices can be efficiently achieved through ETFs, offering high flexibility and T+0 trading.
For investing in innovative drugs, consider the Hong Kong Stock Connect Innovative Drug ETF (520880) and its corresponding feeder fund (025221). It provides 100% exposure to innovative drug R&D companies, with its top ten holdings accounting for over 73% of the portfolio, highlighting its focus on industry leaders.
For broader healthcare exposure, the Huabao Hong Kong Stock Connect Healthcare ETF (159137) targets medical innovation, encompassing hot themes like AI healthcare, brain-computer interfaces, and online pharmacies, while also covering leaders across the entire innovative drug industry chain.
A golden cross MACD signal has formed, indicating positive momentum for these stocks.