Pharmaceutical Index: A Comparison of Constituent Stocks

  • 2025-07-24

 

The weighting and concentration of an index's constituent stocks are also important perspectives for observing the differences between indices.

In terms of the number and concentration of constituent stocks, the CSI 300 Healthcare Index has the fewest constituents at 25, with the top 10 stocks accounting for approximately 70% of the index, indicating a relatively high concentration. The other three indices each have 50 constituent stocks, with the combined weight of their top 10 stocks all below 60%.

Looking at the top 10 constituents of the three A-share indices, the CSI 300 Healthcare Index and the CSI Innovative Pharma Industry Index share three overlapping stocks. The largest weighted stock in both indices is Hengrui Pharmaceuticals, with weights of 17% and 12%, respectively.

The CSI 300 Healthcare Index and the CSI Medical Index share four overlapping stocks in their top 10, while the CSI Innovative Pharma Industry Index and the CSI Medical Index share two overlapping stocks.

Among these, WuXi AppTec is the only stock common to the top 10 constituents of all three A-share indices, with a weight of around 7% in each.

In contrast, the CSI Hong Kong Stock Connect Healthcare Composite Index shares no overlapping stocks with the top 10 constituents of the three A-share indices. This index covers many leading innovative pharmaceutical companies listed in Hong Kong, such as BeiGene, CSPC Pharmaceutical Group, Innovent Biologics, and WuXi Biologics.

Demand Growth Unleashes Performance Potential

Looking ahead, against the backdrop of an aging population and changes in the spectrum of diseases, there remains significant unmet clinical demand. Companies in the healthcare sector are expected to maintain rapid growth in performance.

According to data from China Merchants Securities, over the past three years, the net profit compound growth rate of the CSI Hong Kong Stock Connect Healthcare Composite Index's constituents reached 45%. The CSI 300 Healthcare Index and the CSI Innovative Pharma Industry Index's constituents saw net profit compound growth rates of around 10%, while the CSI Medical Index's constituents had a net profit compound growth rate of approximately 5%.

In 2024, the constituents of these four indices are also expected to deliver strong performance. Among them, the CSI Innovative Pharma Industry Index's constituents are projected to achieve the fastest net profit growth at 43%. The CSI 300 Healthcare Index and the CSI Medical Index's constituents are expected to see net profit growth of around 20%, while the CSI Hong Kong Stock Connect Healthcare Composite Index's constituents are forecasted to achieve net profit growth exceeding 10%.

Investors should carefully consider their risk tolerance based on factors such as investment objectives, time horizon, experience, and financial situation. After understanding the basic characteristics and valuation levels of the indices, they can make rational decisions to allocate to one or more relevant indices.

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