"Leading innovative pharmaceutical companies are severely undervalued"! Huabao Fund Hong Kong Stock Connect Innovative Drug ETF breaks below 10-day line intraday, premium spreads widen in reverse!

MaticHoleFiller · 2026-03-12T08:41:54+00:00

Hong Kong stock pharmaceutical sector experienced fluctuations today, with innovative drug and healthcare stocks declining broadly. Two ETFs continued their downward trend but attracted bargain-hunting funds. Huatai Pharmaceuticals pointed out that leading innovative drug companies are undervalued, while Guojin Securities expects positive earnings announcements in the short term, which could improve market sentiment.

MaticHoleFiller

2026-03-12 08:41:54

Abstract generation in progress

Hong Kong stocks in the pharmaceutical sector experienced increased volatility. Today (March 12), after a brief rebound at the market open, prices declined again, with the afternoon drop widening! Innovative drugs and healthcare stocks mostly in the red. The Hong Kong Stock Connect Innovation Drug ETF (520880), which targets 100% innovative drug development companies, and the Hong Kong Stock Connect Healthcare ETF Huabao (159137), a T+0 trading tool for healthcare stocks, both continued to fall more than 1%. Both ETFs traded at wide premiums, indicating active low-cost buying.

Specifically, regarding innovative drug stocks, there was a major shake-up on March 9 when new stocks were added to the index. Zhonghui Biotech-B and Changfeng Pharmaceuticals both fell over 10%, Haixi Pharmaceuticals and Xuanzhu Biotech-B declined 9%. Heavyweight stocks also underperformed, with CSPC Pharmaceutical Group down 5% and Cinda Biotech down 4%.

Huatai Pharmaceutical team’s latest view states that, considering the certainty of sustained growth in business development (BD) and the high likelihood that large BD deals will generate continuous cash flow for innovative drug companies, most leading innovative drug firms are currently severely undervalued. The valuation gap mainly stems from the systematic underestimation of overseas revenue in the Chinese capital market and differing assessments of asset certainty.

Guojin Securities highlights that catalysts are densely packed for the future. In the short term, from March to April, there is likely to be a window for earnings disclosures from innovative drug companies, with many expected to reduce losses or turn profitable. Looking ahead for the year, domestic innovative drugs are expected to showcase further clinical data at academic conferences such as AACR (April), ASCO (May), and ESMO (October).

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

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

Updated! Newly added innovative drug stocks are included immediately, earlier than most similar indices.
More comprehensive! Covering all 50 innovative drug R&D companies, making it the most complete Hong Kong Stock Connect index for innovative drug R&D.
With a full industry chain opportunity in innovative drugs, attention is on the Hong Kong Stock Connect Healthcare ETF Huabao (159137), which has nearly 40% CXO content. It also covers hot themes like AI healthcare, brain-computer interfaces, and high-end medical devices. Among the 50 constituent stocks, 41 are exclusive “A-shares with no Hong Kong listing” stocks.

Data sources: China Securities Index Co., Ltd., Shanghai, Shenzhen, and Hong Kong Exchanges, etc.

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

Risk warning: The constituent stocks of the index shown are for display purposes only. Descriptions of individual stocks are not investment advice and do not represent holdings or trading activities of any fund managed by the fund manager. The risk level assessed for the Hong Kong Stock Connect Innovation Drug ETF and Hong Kong Stock Connect Healthcare ETF Huabao is R4—moderate to high risk, suitable for active investors (C4) and above. All information in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any other statements) is for reference only. Investors are responsible for their own investment decisions. The opinions, analyses, and forecasts in this article do not constitute investment advice. The fund manager’s other funds’ performance does not guarantee future results, and past performance is not indicative of future performance. Investing in funds involves risks.

MACD Golden Cross signals have formed, and these stocks are on a strong upward trend!

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.