Hong Kong's pharmaceutical sector showed signs of recovery during early trading on May 7. Leading innovative drug companies saw collective gains, with the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug Selection Trading Open Ended Index Securities Investment Fund (520880), which focuses entirely on innovative drug R&D, rising up to 1% at one point. Internet healthcare and CXO sectors also contributed to the upward movement, while the Huabao Hang Seng Hong Kong Stock Connect Healthcare ETF (159137), representing core healthcare assets, increased over 2% intraday.
By the time of reporting, the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug ETF (520880) had retreated to near its opening level but continued to trade at a premium, indicating active buying interest. Notably, the ETF recorded a substantial net inflow of 98.39 million yuan just the previous day.
Among constituent stocks, heavyweight leader BEIGENE gapped up at the open following its earnings release, surging as much as 7% before settling at a 4.78% gain. Suncell Pharmaceutical Group rose over 1%, while Akeso, Inc. and Innovent Biologics, Inc. both advanced approximately 1%.
On the evening of May 6, BEIGENE announced that for the first quarter of 2026, the company achieved total operating revenue of 10.544 billion yuan, representing a 31% year-on-year increase. It reported a net profit attributable to shareholders of 1.608 billion yuan, turning around from a loss in the same period last year. The core product BRUKINSA accounted for over 70% of revenue, with European sales growing 51.4% year-on-year. The company raised its full-year performance forecast and also announced an authorization agreement with HuaHui AnJian, securing global rights to a novel trispecific antibody drug. This marks the first time BEIGENE has licensed global rights to a preclinical drug from a domestic pharmaceutical company.
Notably, this represents the second time BEIGENE's quarterly revenue has exceeded 10 billion yuan, and the fourth consecutive quarter of profitability. Additionally, compared to the net profit of 322 million yuan in Q4 2025, the Q1 2026 net profit showed a sequential growth of 399.38%.
Huayuan Securities stated in a research report that they "continue to strongly recommend innovative drugs" based on three factors: 1) The State Council issued documents supporting genuine innovation pricing, improving domestic sales expectations; 2) BD transaction volume reached nearly $60 billion in Q1 2026, approaching half of the 2025 total, indicating strengthening global expansion trends; 3) Previously BD-ed or anticipated BD candidates continue advancing through clinical trials, with progress from preclinical to Phase I to Phase II/III trials potentially further solidifying valuations.
Investors looking to capitalize on Hong Kong pharmaceutical配置 opportunities during market dips can consider two primary T+0 instruments: For pure innovative drug exposure, the Huabao Hang Seng Hong Kong Stock Connect Innovative Drug ETF (520880) provides 100% allocation to innovative drug R&D companies, with top ten holdings representing over 70% of the portfolio, highlighting its strong focus on industry leaders. For exposure to the broader innovative drug产业链, the Huabao Hang Seng Hong Kong Stock Connect Healthcare ETF (159137) offers 42% CXO and 20% innovative drug allocation, while also covering internet healthcare, medical devices (including brain-computer interfaces) and other leading companies.