Recently, indices related to innovative drugs have collectively strengthened, with the Hang Seng Stock Connect Hong Kong Innovative Drug Index standing out as a market focus due to its impressive year-to-date increase of over 60%. In recent years, China's innovative drug sector has achieved remarkable developmental results, attracting frequent purchases from overseas pharmaceutical companies, marking the strong rise of a new batch of competitive industries in China.
Moreover, since the beginning of this year, multinational pharmaceutical companies have significantly increased their purchases of innovative drug patents from China, with the procurement amount from January to May already approaching the total for 2024. Multinational pharmaceutical companies are among the most professional and authoritative "investors" in the medical field, and their recognition proves the competitiveness of China's innovative drugs in the international market. This has become an important basis for the stock market's repricing of the value of China's innovative drug assets since the beginning of the year.
From a medium- to long-term perspective, the trend of large multinational pharmaceutical companies accelerating their purchases of innovative drug patents from China is expected to continue. On the demand side, multinational pharmaceutical companies face pressures such as drug price reductions and patent expirations, making it urgent for them to procure patents externally. On the supply side, China's innovative drug industry boasts advantages such as low trial-and-error costs and high R&D efficiency, with its pipeline reserves now ranking second globally, making it a primary source of patent acquisitions for multinational pharmaceutical companies.
The Hang Seng Innovative Drug ETF is currently the only product on the market that tracks the Hang Seng Stock Connect Hong Kong Innovative Drug Index, helping investors conveniently allocate to cutting-edge innovative drug companies in Hong Kong stocks.
Additionally, in the A-share market, products such as the E Fund Innovative Drug ETF (516080, Link Fund A/C: 019666/019667) cover the entire innovative drug industry chain, bringing together major players in A-share innovative drugs like Hengrui Pharmaceuticals and Fosun Pharma.
Of course, future investment opportunities in the pharmaceutical industry are not limited to innovative drugs. Analysis from fundamental, policy, and valuation perspectives shows that various sub-sectors of the pharmaceutical industry are on a trend of marginal improvement or sustained recovery. Therefore, there may be investment opportunities across all pharmaceutical sub-sectors in the future, though the timing and magnitude may vary.
For example, the Pharmaceutical ETF (512010, Link Fund A/C: 001344/007883) focuses on leading companies in the A-share pharmaceutical and healthcare industry, comprehensively covering sub-sectors such as chemical pharmaceuticals, medical services, and medical devices in the future health industry. The product's current scale exceeds RMB 20 billion, ranking first among ETFs with the same target. The Hong Kong Stock Connect Pharmaceutical ETF (513200, Link Fund A/C: 018557/018558) focuses on leading companies in the pharmaceutical and healthcare industry within the Hong Kong Stock Connect, including key areas such as innovative drugs, medical devices, and medical services. The product's latest scale exceeds RMB 2 billion, leading among ETFs with the same target.
