Following a sharp rally against the broader market, A-share and Hong Kong-listed innovative drug stocks faced a short-term correction on September 15. The underlying indices of Hua Bao's Pharma ETF (562050) and Hua Bao's HK Connect Innovative Drug ETF (520880) closed down 0.8% and 1.48%, respectively.
On the individual stock front, Beigene Ltd (A-share) fell 1.18%, while its Hong Kong-listed shares dipped 0.19%. Jiangsu Hengrui Pharmaceuticals Co Ltd (A-share) edged down 0.05%, with its HK shares sliding 2.67%. Akeso Inc demonstrated resilience, slipping just 0.47% after surging nearly 6% the previous day. Chart: Daily K-line trends for Hua Bao's HK Connect Innovative Drug ETF (520880) over the past six months.
Amid overall pressure on both mainland and Hong Kong stock markets, capital quickly shifted in the short term, with profit-taking following the WCLC conference's positive catalysts triggering a sector-wide pullback. Analysts noted that recent market volatility is largely driven by sentiment and capital flows representing temporary disruptions, while the fundamental underpinnings of the industry remain robust.
Key data points from innovative drug leaders are emerging. The 2026 WCLC abstract disclosed detailed interim analysis results from the HARMONi-2 study of Akeso Inc's ivonescimab (AK112, a PD-1/VEGF bispecific antibody), demonstrating a significant overall survival (OS) benefit that further supports the drug's clinical efficacy and long-term therapeutic value.
The outbound licensing thesis continues to gain traction. According to statistics from TF Securities, from January to August 2026, the total value of Chinese innovative drug outbound BD deals reached $111.5 billion, a year-on-year increase of 25.4%, already achieving 79.6% of the full-year 2025 total. Upfront payments hit $6.79 billion, growing 35.2% year-on-year. What lies ahead? Three key factors warrant close observation.
First, global interest rate trends, specifically how Federal Reserve rate hike expectations may marginally impact sector valuations. Second, the ESMO conference on October 23, serving as another major window for clinical data disclosures following WCLC. Third, the November release of medical insurance and commercial insurance catalogs, where attention will focus on inclusion of innovative drugs and their launch momentum.
For investors looking to buy on dips in the innovative drug space, two investment instruments stand out: Hua Bao's HK Connect Innovative Drug ETF (520880), which closely tracks the Hang Seng HK Connect Innovative Drug Select Index, with 100% allocation to innovative drug R&D companies, top ten holdings accounting for over 70% of weight, featuring prominent leader attributes, underlying assets in Hong Kong stocks, high beta, and T+0 trading. Meanwhile, Hua Bao's Pharma ETF (562050) stands as the sole ETF on the market tracking a pharmaceutical index, with an exclusive ratio of "70% innovative drugs + 20% traditional Chinese medicine," combining high growth potential of innovative drugs with high dividend yields from TCM. Data sourced from Shanghai, Shenzhen, and Hong Kong exchanges, CSI Index Company, and Hang Seng Index Company.
Note: ETF funds do not charge sales service fees. When investors subscribe or redeem fund shares, the subscription and redemption agent brokers may charge commissions up to 0.5% of the standard rate, which includes fees levied by stock exchanges and registration institutions. For detailed fund fee structures, please refer to the respective fund legal documents. Risk disclaimer: Index constituent stocks shown herein are for illustrative purposes only, and stock descriptions do not constitute investment advice of any form, nor do they represent holdings or trading activities of any fund under the manager. The CSI Pharmaceutical Index annual historical returns/annualized volatility from 2021-2025 are: -9.10%/23.43%, -21.09%/25.92%, -3.70%/18.25%, -6.53%/29.46%, 9.38%/16.12%. The Hang Seng HK Connect Innovative Drug Select Index annual historical returns/annualized volatility from 2021-2025 are: -22.72%/35.30%, -16.48%/44.08%, -19.76%/34.79%, -14.16%/38.47%, 66.32%/39.20%. Index constituent compositions adjust according to index compilation rules from time to time, and past performance does not indicate future results. The fund manager assesses the risk rating of Medical ETF, Pharma ETF Hua Bao, and their feeder funds as R3-moderate risk, suitable for balanced (C3) and above investors; HK Connect Innovative Drug ETF Hua Bao and its feeder fund, and HK Connect Medical ETF Hua Bao carry a risk rating of R4-moderately high risk, suitable for aggressive (C4) and above investors. Any information appearing herein (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any form of expression) is for reference only. Investors are solely responsible for their independent investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers of any form, nor shall liability be assumed for any direct or indirect losses arising from the use of this content. Performance of other funds managed by the fund manager does not guarantee fund performance, and past fund performance does not represent future performance. Fund investment carries risks. MACD golden cross signals forming, these stocks are performing well!