Hong Kong stocks pharmaceuticals strike back—is opportunity here? Huabao Fund Hong Kong Stock Connect Innovative Drug ETF (520880) and Hong Kong Stock Connect Healthcare ETF rise over 2% together, ending three consecutive days of losses

On March 16, Hong Kong stocks surged, with the pharmaceutical sector leading the rally!

Innovative drugs took the lead, with the Hong Kong Stock Connect Innovation Drug ETF (520880), which targets 100% innovative drug development, fluctuating upward throughout the day, closing up 2.95% at the intraday high with a trading volume of 465 million yuan, up over 30% from the previous day.

In terms of constituent stocks, leading companies such as Kangfang Biotech, CSPC Pharmaceutical Group, and Sihuan Pharmaceutical all rose over 5%. Newly added stock Changfeng Pharmaceutical’s IND for a new drug treating pulmonary arterial hypertension was accepted, with the stock soaring nearly 43% during the session.

The Hong Kong Stock Connect healthcare sector gained momentum in the afternoon, with rare internet healthcare leader JD Health jumping 5%, AI pharmaceutical leader Jintai Holdings rising over 4%, and Hong Kong Stock Connect Healthcare ETF Huabao (159137), a core asset in Hong Kong healthcare stocks, increasing by 2.04% to end a three-day losing streak.

Data shows that the Hong Kong Stock Connect Healthcare ETF Huabao (159137) tracks the Hong Kong Stock Connect Healthcare Theme Index, which focuses on representing healthcare innovation in Hong Kong stocks. It heavily invests in leading stocks in the innovative drug industry chain, covering hot topics like AI healthcare, brain-computer interfaces, and high-end medical devices. Among its 50 constituents, 41 are exclusive “A-shares with no Hong Kong listing,” highlighting its unique focus.

Policy-wise, the 2026 government work report elevated the biopharmaceutical industry to a pillar industry on par with low-altitude economy, integrated circuits, and aerospace. Orient Securities recommends paying attention to the long-term development of the biopharmaceutical sector, especially the continuous rise of innovative drug and medical device companies that lead from the source, as reforms in the payment system are underway.

On the news front, on March 9, the first batch of Hong Kong Stock Connect targets for 2026 were officially adjusted, with 42 new targets added, including 13 unprofitable biotech companies, accounting for 31%, setting a new record for biotech inclusion. Foreign institutions note that China’s biotech sector remains stable fundamentally, with innovation resilience being a long-term focus.

【Hong Kong Stock Connect Innovation Drug ETF (520880) Rebalancing Special Reminder】

On March 9, the Hong Kong Stock Connect Innovation Drug ETF (520880) index (Hang Seng Hong Kong Stock Connect Innovation Drug Selection Index) rebalanced, with 13 stocks added and none removed, increasing the total to 50. After the rebalancing, the index’s relative advantage was further strengthened:

• Updated! Newly added innovation drug targets are included immediately, earlier than most similar indices.
• More comprehensive! Covers all 50 innovative drug R&D companies, making it the most complete Hong Kong Stock Connect index for innovative drug R&D companies.

Data sources: China Securities Index Co., Ltd., Shanghai, Shenzhen, and Hong Kong Exchanges. Institutional view source: Orient Securities 20260310 “Pharmaceutical and Biological Industry Weekly: Rise in Strategic Status of Biomedicine, Long-term Opportunities in Innovative Drugs, Medical Devices, and Elderly Care Services.”

Note: ETF funds do not charge sales service fees. When investors subscribe or redeem fund units, the broker handling the transaction may charge a commission up to 0.5%, including fees from stock exchanges, registries, etc. For detailed fund fee rates, see each fund’s legal documents.

Risk warning: The index constituents shown are for display only. Stock descriptions are not investment advice and do not represent holdings or trading activity of any fund managed by the manager. The risk level of the Hong Kong Stock Connect Innovation Drug ETF and Hong Kong Stock Connect Healthcare ETF Huabao, as assessed by the fund manager, is R4—medium-high risk, suitable for active (C4) and above investors. All information in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any other statements) is for reference only. Investors are responsible for their own investment decisions. The views, analysis, and forecasts in this article do not constitute investment advice and the fund manager is not responsible for any direct or indirect losses resulting from the use of this content. Past performance of other funds managed by the fund manager does not guarantee future results. Investing in funds involves risks.

MACD Golden Cross signals formed, these stocks are showing good upward momentum!