Surge and pullback! CXO and internet healthcare support, Huabao Fund Hong Kong Stock Connect Healthcare ETF achieves consecutive gains! Innovative drug differentiation, 520880 closes flat on increased volume

What is the impact of clinical trial progress behind the divergence of leading innovative drug stocks?

On March 17, the Hong Kong stock market surged then pulled back, and the healthcare sector was no exception.

Hong Kong healthcare core assets—Hong Kong Stock Connect Healthcare ETF Huabao (159137)—touched a high of 3.38% in the morning, ultimately closing up 0.44%** and successfully continuing the upward trend.** CXO and internet healthcare heavyweight stocks supported the index, with Kingsray Biotech rising 3.74%, WuXi Biologics and other stocks closing in the green, JD Health and Alibaba Health both closing higher, and Ping An Good Doctor up 2.77%.

Analysts pointed out that the healthcare sector currently offers multiple investment opportunities. The CXO industry is experiencing sustained growth in overseas orders and domestic capacity clearing, with continued improvement in valuation space; medical devices benefit from policies supporting domestic equipment upgrades and expanding overseas markets, frontier areas like brain-computer interfaces and AI imaging are continuously catalyzed; Internet healthcare is seeing ongoing optimization of platform operation efficiency amid deeper reforms in medical insurance payments, with clearer profit growth trajectories.

There is no difference between innovative drugs and healthcare trends. The **100% innovative drug R&D target—Hong Kong Stock Connect Innovation Drug ETF (520880)—**touched 3% in the morning, but closed flat, with high trading activity maintained, and a volume of 515 million yuan traded.

Leading innovative drug stocks diverged, with San Siro Pharmaceutical leading the gains all day, peaking over 8% intraday. The company’s ActRIIA/ActRIIB bispecific antibody SSS67 received FDA approval to initiate clinical trials. Biocytogen and China Biopharmaceutical declined.

From an industry perspective, recently, domestically developed innovative drugs have shown excellent clinical data at academic conferences. Huayuan Medical team pointed out that by 2026, IO2.0 (next-generation tumor immunotherapy) will undergo further data validation, and investment opportunities in IO iteration continue to strengthen. We remain confident in the logic of the innovative drug sector and emphasize bottom-area opportunities.

From an investment timing perspective, since September last year, Hong Kong’s healthcare stocks have been in a continuous correction, now reaching a stage low, making leading stocks more attractive. Positioning for a rebound in Hong Kong healthcare stocks at low levels, focus on two T+0 tools:

Invest in healthcare—choose Hong Kong Stock Connect Healthcare ETF Huabao (159137), with about 70% of holdings in CXO and AI healthcare, balancing innovative drugs and medical devices (including brain-computer interfaces). The top ten holdings include JD Health, Alibaba Health, and other rare internet healthcare leaders.

Invest in innovative drugs—choose Hong Kong Stock Connect Innovation Drug ETF (520880), fully allocated to innovative drug R&D companies, with over 70% of the top ten holdings, highlighting leading attributes.

Data sources: China Securities Index Co., Ltd., Shanghai, Shenzhen, and Hong Kong Exchanges. Institutional views: Huayuan Medical 20260316 “【Huayuan Medical｜Innovative Drugs】IO2.0 is about to receive multiple catalysts, firmly optimistic about the sector logic, and focus on bottom opportunities.”

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Risk warning: The index component stocks shown in the article are for display purposes only. Stock descriptions are not investment advice in any form, nor do they represent holdings or trading trends 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 investors (C4) and above. Any information (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, or any form of statements) in this article is for reference only. Investors are responsible for their own investment decisions. Furthermore, any opinions, analyses, or forecasts in this article do not constitute investment advice and do not hold the fund manager responsible for any direct or indirect losses resulting from the use of this content. Performance of other funds managed by the fund manager does not guarantee future performance, and past performance is not indicative of future results. Investing in funds involves risks.