China Pharmaceutical Group shares rose nearly 4% after earnings! The strategic partnership between Innovent Biologics and Eli Lilly has taken effect, clarifying that it is not an acquisition deal! Hong Kong Stock Connect Innovative Drug ETF(159570) up over 1%, continuing its rebound!

Today (3/25), Hong Kong pharmaceutical stocks continued their rebound for the second consecutive day. The Hong Kong Stock Connect Innovation Drug ETF (159570), which is 100% pure innovation drugs, rose over 1%, with intraday trading volume quickly surpassing 1.5 billion yuan! Funds have net flowed in for two of the past three days, accumulating a total “attraction” of 22 million yuan! Its latest size exceeds 22.1 billion yuan, far ahead of its peers.

On the news front, Cinda Biologics and Eli Lilly’s strategic cooperation agreement has taken effect, clarifying that it is not an acquisition deal. On March 25, Cinda Biologics announced that the strategic cooperation agreement with Eli Lilly, which became effective on March 24, 2026, has all prerequisites met. The partnership aims to promote new drug development in oncology and immunology. The announcement mentioned that some media incorrectly interpreted the agreement’s effectiveness as an acquisition of the company. The company clarified that it has no intention of such a transaction. Shareholders and interested investors are advised to rely on official announcements and not market rumors.

In terms of performance, on March 25, CSPC Pharmaceutical Group announced its annual results. For the year ending December 31, 2025, the attributable profit to shareholders was 3.882 billion RMB, compared to 4.328 billion RMB in 2024. Excluding fair value changes of financial assets at fair value through profit or loss and employee compensation expenses based on shares, the basic attributable profit was 3.534 billion RMB, down from 4.683 billion RMB in 2024. The board recommends a final dividend of 15 HK cents per share for 2025.

Most of the popular stocks in the Hong Kong Stock Connect Innovation Drug ETF (159570) index are in the green: CSPC rose nearly 4% after earnings, Kelun Bota Bio (B shares) up over 2%, Cinda Biologics, Kangfang Biotech, and Rongchang Biotech all up over 1%.

Note: The index weights are for display only and do not constitute stock recommendations.

【BD volume expansion and refinancing, leading innovation drug companies with strong cash flow!】

From 1/1/2024 to 3/21/2026, the biotech and pharmaceutical sectors listed in Hong Kong and A-shares have raised about 70 billion yuan to support R&D pipelines. Data shows that in this period, A-shares in biotech raised a total of 11.8 billion yuan through secondary offerings and 2.5 billion yuan via convertible bonds. The Hong Kong biotech sector raised a total of HKD 63.2 billion after listing.

BD revenue has become an important source of funding for innovation drug R&D. As of 3/21/2026, China’s outbound BD total packages for innovative drugs reached $57.1 billion, with an initial payment of $3.3 billion across 53 deals. The total packages account for 41% of the 25-year total (which is $137.7 billion), exceeding the full-year level of 2024 ($52.9 billion). The initial payment of $3.3 billion is 46% of the 25-year total. Under the benefits of domestic engineer talent, a large patient pool, and policy support, Dongwu Securities believes that China’s outbound innovation drug BD is a long-term industry trend, and they remain optimistic about continued BD deals in 2026.

The pharmaceutical sector has ample funds, supporting sustainable R&D. Dongwu Securities assesses the sector’s financial health by calculating “cash and cash equivalents / annual R&D expenses.” Overall, the sector currently has sufficient funds, with most companies maintaining more than one year of R&D funding, effectively supporting clinical trials, pipeline expansion, and technological innovation. This provides a solid financial foundation for long-term high-quality industry development and ample time for technological breakthroughs and commercialization of innovation drugs. (Source: Dongwu Securities, 20260322 “BD volume expansion and refinancing, leading innovation drug companies with strong cash flow”)

Chart: Funds of the Hong Kong Stock Connect Innovation Drug ETF (159570) index components

Note: Components are for display only and do not constitute stock recommendations.

【China’s new drugs to shine at the 2026 AACR Conference】

Guohai Securities points out that the AACR annual meeting will be held from April 17-22, 2026, in San Diego, USA. 104 Chinese pharmaceutical companies will showcase over 250 innovative drugs, including 92 ADC drugs targeting CDH17, Claudin18.2, HER2, Nectin-4, and 66 small-molecule drugs targeting KRAS, PRMT5, WRN, CDK, among others. Cutting-edge technologies like nuclear medicine, DAC, cell therapy, and mRNA will also present preclinical data.

(Source: Guohai Securities, 20260324 “China’s new drugs to shine at the 2026 AACR Conference”)

【Focus on China’s hardcore innovative drug strength, new production power, and recognize the Hong Kong Stock Connect Innovation Drug ETF (159570)】

The Hong Kong Stock Connect Innovation Drug ETF (159570) is 100% allocated to innovative drugs! As of February 27, the top ten constituent stocks account for 73.54% of the weight, encapsulating the essence of Hong Kong Stock Connect innovation drugs!

Source: China Securities Index Co., Ltd., 20260227. Components are for display only and do not constitute stock recommendations.

The index underlying the Hong Kong Stock Connect Innovation Drug ETF (159570) is more flexible, with a gain of over 70% since the second half of 2023, leading the Hong Kong healthcare index!

From 7/1/2023 to 2/13/2026

The underlying assets are Hong Kong stocks, tradable T+0!

Focus on China’s hardcore innovation drug strength, new production power, and recognize the Hong Kong Stock Connect Innovation Drug ETF (159570), with off-market links (Class A: 021030; Class C: 021031)!

Risk warning: Funds carry risks; invest cautiously. The stocks mentioned are only for objective display of index components and do not constitute investment advice. Any opinions, analysis, or forecasts in this article do not constitute investment recommendations. These funds are high-risk products (R4), suitable for investors with a risk profile of aggressive (C4) or above after risk assessment. The fund’s investment scope includes Hong Kong stocks, which face unique risks due to differences in investment environment, targets, market systems, and trading rules. When subscribing or redeeming ETF units, authorized brokers may charge a commission not exceeding 0.50%, including fees from stock exchanges and registries. For other funds, please refer to the respective prospectus and legal documents.

The index for the Hong Kong Stock Connect Innovation Drug ETF (159570) is the Guozheng Hong Kong Stock Connect Innovation Drug Index, which has returned -21.59%, -25.60%, -22.80%, -10.50%, and 59.83% over the past five full years (2021-2025).