At the end of the first quarter of this year, several active equity funds with heavy holdings in the humanoid robot sector were still far ahead in performance, while recently, funds with heavy holdings in the innovative medicine sector have stood out. As of April 27th, the Huitianfu Hong Kong Advantage Selection Hybrid (QDII) A managed by fund manager Zhang Wei has become the best performing public offering product of the year with a return rate of 64.44%.

Industry insiders have stated that compared to the past, the market for innovative drugs in this round is more rational. Firstly, the industry trends and policy guidance have become clearer, leading to an increase in market confidence; Secondly, many key companies' core products have already been listed or validated with critical clinical data, resulting in a significant increase in investment success rates; Thirdly, some leading companies are about to cross the breakeven point and enter the performance realization cycle, with significantly improved valuation stability.

The strengthening of pharmaceutical themed funds

As of April 27th, the return rate of Huitianfu Hong Kong Advantage Selection Hybrid (QDII) A this year has reached 64.44%, making it the best performing public offering product of the year. According to the first quarter report, as of the end of the first quarter, the top ten heavy holdings of the fund were Rongchang Biotechnology, Kelombotai Bio-B, Xinda Biotechnology, Hehuang Pharmaceutical, Kangnuoyo-B, Hansen Pharmaceutical, Kangfang Biotechnology, Nuocheng Jianhua, Laikai Pharmaceutics-B, and BeiGene.

There are also many pharmaceutical themed funds appearing on the annual yield ranking list. As of April 27th, the annual returns of several funds, including the Great Wall Pharmaceutical Industry Select Hybrid Initiative, Yongying Pharmaceutical Innovation Intelligent Selection Hybrid Initiative, Bank of China Hong Kong Stock Connect Pharmaceutical Hybrid Initiative, and Hua'an Pharmaceutical Biotechnology Stock Initiative, have exceeded 40%.

Early March is the initial stage for many pharmaceutical themed funds to rise. Taking the Great Wall Pharmaceutical Industry's selected mixed launch as an example, in mid February, the unit net value of the product had just rebounded to over 1 yuan, and since March, it has continued to make efforts. Currently, the unit net value of the product has reached 1.42 yuan.

Many well-known pharmaceutical fund managers have seen a significant increase in their managed products recently. Taking the China Europe Medical Innovation Stock A managed by G ü len as an example, Choice data shows that as of April 27th, the product's return rate in the past three months has exceeded 20%, ranking among the top 3% in the same category.

Bull stocks frequently emerge in the pharmaceutical industry

The strengthening of the pharmaceutical market has driven up the net value of pharmaceutical themed funds, with a particularly significant increase in the innovative drug track. Taking the Huitianfu Hong Kong Advantage Selection Hybrid (QDII) as an example, among the top ten heavily held stocks of the fund, multiple bull stocks have already appeared. For example, the stock price of its largest holding, Rongchang Biotechnology, has been strengthening recently, and its Hong Kong stock price has risen by over 200% since the beginning of this year. For example, Xinda Biotechnology has seen a nearly 50% increase since the beginning of this year.

The significant breakthrough in research and development has become an important catalyst for the pharmaceutical market. On April 25th, Kangfang Biotechnology announced that its independently developed global first PD-1/VEGF bispecific antibody new drug, Yida Fang (generic name: Yiwo Xidan Anti Injection), has been approved for marketing in China as a monotherapy for the treatment of locally advanced or metastatic non-small cell lung cancer (NSCLC) with PD-L1 positive (TPS ≥ 1%) epidermal growth factor receptor (EGFR) gene mutation negative and anaplastic lymphoma kinase (ALK) negative. For example, Laikai Pharmaceutical recently announced that its independently developed LAE102 (ActRIIA monoclonal antibody) has entered a new phase of Phase I clinical trials for overweight/obesity in China. Following the successful completion of the single dose escalation study (SAD study), the multi dose escalation study (MAD study) has started recruiting participants, and the first participant has completed their first visit.

It is worth noting that in this round of pharmaceutical market, the performance elasticity of Hong Kong stock varieties is significantly higher than that of A-shares. Speaking of this reason, Xu Jiachen and Lou Huiyuan, fund managers of Bank of Communications Schroder Fund, stated that the overall quality of innovative pharmaceutical companies in Hong Kong stocks is higher than that of A-shares, and due to liquidity issues, there was a discount at one point. Since the beginning of this year, the United States has entered a cycle of interest rate cuts coupled with the revaluation of China's technology assets, leading to an improvement in liquidity in the Hong Kong stock market from top to bottom. Against this backdrop, innovative drug stocks in the Hong Kong stock market have generally returned to normal valuation levels from a discounted state in a relatively short period of time, resulting in a more impressive performance of the innovative drug board in this round.

Be wary of staged hype

In the view of Luo Ying, a fund manager of Caitong Pharmaceutical Health Hybrid, the innovative drug field has indeed entered a positive cycle of "technological breakthroughs policy support globalization realization". In terms of policies, the review and approval reform, payment optimization, and local support jointly release policy dividends; In terms of industry and market, innovative drugs have entered a critical period of industrial quality change, and the effectiveness of going global has accelerated. In the past few years, the number and amount of authorized overseas transactions by Chinese innovative drug companies have increased significantly, and Chinese innovative drug companies have begun to occupy a place in the global market.

"The current market of innovative drugs cannot be compared with that of the past, because the industrial competitiveness is much higher than that of 5 years ago and 10 years ago. If the analog products are similar to the launch of vaccines, growth hormone and other large varieties since 2017," Xu Jiachen and Lou Huiyuan said that at present, they are in the stage of forming the market consensus of "the global competitiveness of China's innovative drug industry has leapt", and the short-term valuation of the core target tends to be reasonable, but there has not yet been a foam. In the future, they can still "earn money cashed in on fundamentals". In 2025, four core catalytic points can be focused on: firstly, key clinical data disclosed at some industry conferences; Secondly, authorization for large variety overseas markets; The third is the realization of performance of listed products; The fourth is the negotiation of new product medical insurance.

Luo Ying also stated that vigilance should be maintained against the staged hype in this field. Its holdings strictly follow the "two no's principle": not participating in short-term thematic speculation, and not pursuing targets that have deviated from fundamentals. Regarding the field of innovative drugs, Luo Ying stated that on the one hand, she strives to closely track the key nodes of industry development from a dynamic perspective, and on the other hand, closely monitor policy uncertainty and potential overseas risks, strictly implement the "inverted pyramid reduction method", and strive to grasp the window of rising prices for innovative drugs while completing profit taking in a timely manner, achieving a dynamic balance of risk return ratio.