Leading innovative drug companies' profit turning point reconfirmed, the industry enters the profit realization period. Low-fee Hong Kong Stock Connect innovative drug ETF, E Fund (159316), surges 4.47%.

Gelonghui March 27｜In the afternoon, Hong Kong-listed innovative drug sector continued to rally. As of the time of this report, the Hong Kong Stock Connect Innovative Drug ETF—Efund (159316) was up 4.47%, with trading volume reaching RMB 765 million, and a turnover rate as high as 18.92%, indicating active trading.

Strong-than-expected performance from leading innovative drug companies has become the core driver. On March 26, Xinda Biologics released its 2025 results, achieving total revenue of RMB 13.042 billion, up 38.4% year over year, and for the first time it turned profitable for the full year. The company has 18 marketed products, of which 12 have been included in the National Reimbursement Drug List. Its “dual-engine” strategy centered on oncology and chronic diseases has shown significant results.

In addition, multiple innovative drug companies turned losses into profits, and the industry has entered a period of profit realization: besides Xinda Biologics, several pharma companies including Innovent Biologics, Zai Lab, Cloud, New, and China Biologic Products all turned losses into profits and achieved profitability.

After the prior period of adjustment, the valuation of Hong Kong-listed innovative drug sector has returned to a historically relatively low range. Currently, it is seeing multiple positive catalysts layered together—“validation of a turnaround inflection point in leading companies’ performance + improvement in strategic positioning + continuation of overseas orders.”

The Hong Kong Stock Connect Innovative Drug ETF—Efund (159316) closely tracks the Hang Seng Hong Kong Stock Connect Innovative Drug Index. In its index methodology, the index explicitly excludes CXO companies and 100% focuses on core innovative drug enterprises. The purity is very high. The top ten weight holdings are concentrated with leading enterprises in the Hong Kong innovative drug sector, including the double-antibody leader Kangfang Biologics, Shijiah, Shiya, a benchmark for traditional transformation; global leader BeiGene; the representative of a “me-too plus innovation” approach, China Biopharmaceutical; and Xinda Biologics, which has just achieved a profitability breakthrough.

As of March 25, the fund’s latest scale was about RMB 3.951 billion. Over the past 20-odd trading days, it attracted a total of RMB 87.31 million. Its total composite fee rate is 0.2% per year, ranking as the lowest fee tier among comparable products in the whole market. The ETF’s feeder funds are (Class A: 024328, Class C: 024329).