On November 13, Hong Kong stocks declined for a third consecutive session, with innovative drugs and the broader industry chain suffering the steepest losses.
The underlying index of the HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVES (520880), which is 100% focused on innovative drug R&D targets, closed down 2.72% and fell below its 10-day moving average, while the underlying index of the high-CXO-exposure Hong Kong Stock Connect Healthcare ETF Huabao (159137) dropped 3.2%, marking a fifth straight losing session.
The top ten weighted stocks in both core ETFs all ended lower. Innovative drug leaders CSPC Pharmaceutical Group and Akeso fell around 4%, while BeiGene and Innovent Biologics lost more than 2%. CXO leaders WuXi Biologics, WuXi AppTec, and WuXi Biologics each declined over 4%.
Recent turbulence in Hong Kong pharmaceutical stocks likely stems mainly from sentiment and capital flow factors. The Hong Kong innovative drug chain is highly sensitive to interest rates. U.S. October CPI released on November 10 showed a 0.4% month-over-month increase, with core CPI up 0.3% month-over-month, exceeding expectations for a third consecutive month. Rising rate hike expectations directly lift the discount rate for long-duration assets.
On the news front, there was no negative development. On the contrary, policy support emerged once again: on November 10, the National Health Commission, the National Healthcare Security Administration, the National Administration of Traditional Chinese Medicine, and the National Disease Control and Prevention Administration jointly issued a notice on further improving the safe and rational deployment and use of innovative drugs, providing systematic support for hospital access and use of innovative drugs across four areas: deployment, training, payment, and assessment.
Sinolink Securities noted that this notice bridges the final gap from "medical insurance access" to "hospital prescriptions," and that negotiated drugs are expected to accelerate hospital entry and volume ramp-up once pricing is determined. A new round of dual catalogs is about to land in the near term, and we believe the pace of domestic innovative drug volume growth in 2027 could exceed market expectations. We are bullish on domestic innovative drug hospital volume growth in 2027.
Overall, this round of adjustment may present a relatively good window to re-allocate into the innovative drug chain. As of now, the price-to-earnings (TTM) valuation levels of the underlying indices of the HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVES (520880) and the Hong Kong Stock Connect Healthcare ETF Huabao (159137) stand at the 28.21% and 2.14% percentiles of the past three years, respectively, highlighting compelling allocation value.
For full-chain exposure to innovative drugs, consider these T+0 trading tools: the HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVES (520880), whose underlying index is 100% allocated to innovative drug R&D companies, with 70% of positions betting on innovative drug R&D leaders; off-exchange feeder fund: 025221. Hong Kong Stock Connect Healthcare ETF Huabao (159137), whose underlying index is heavily weighted in the innovative drug industry chain, with approximately 50% CXO plus 20% innovative drugs, of which the WuXi group accounts for over 40%; off-exchange feeder fund: 026922.
Data sources: Shanghai-Hong Kong-Shenzhen exchanges, China Securities Index Company, Hang Seng Index Company, and other public information. Weight data as of October 31, 2026. Institutional view: Sinolink Securities, November 12, 2026, "Four Departments Issue Notice to Bridge the 'Last Mile' of Innovative Drug Hospital Access."
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Special reminder: The risk level of the feeder fund of the HUABAO HANG SENG HONG KONG STOCK CONNECT INNOVATIVE DRUG SELECTION TRADING OPEN ENDED INDEX SECURITIES INVES, as assessed by the fund manager, is R4-medium-high risk, suitable for aggressive (C4) and above investors. Risk disclosure: Index constituent stocks mentioned in this article are for illustrative purposes only; individual stock descriptions do not constitute any form of investment advice and do not represent the holdings or trading activities of any fund managed by the manager. The constituent stocks of the underlying index are adjusted in due course according to the index compilation rules. Any information appearing in this article, including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression, is for reference only, and investors are responsible for any investment decisions they make independently. In addition, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers, and no responsibility is accepted for direct or indirect losses arising from the use of this content. Fund investment involves risk; past performance of a fund does not represent its future performance, and the performance of other funds managed by the fund manager does not guarantee the fund's performance. Invest with caution. MACD golden cross signals have formed; these stocks are performing well.