Leading pharmaceutical companies continue to validate strong performance amid high industry prosperity; the undervaluation and investment potential of the pharmaceutical and biotech sector are becoming more evident.

(Source: Caixin News)

          With top-tier companies delivering solid performance and continued order execution amid sustained high market conditions, the industry’s policy environment is trending toward stability, and the value of sector allocations is gradually becoming evident.            

As of 14:00 on March 24, the pharmaceutical sector led gains against the trend. Concarnoa-B (02162.HK), IASy Smart (03696.HK), VILISBO-B (09887.HK), Kura Oncology-Bio-B (06990.HK), Kangfang Bio (09926.HK), among others, were among the top gainers. The HanTong Stock Connect Innovative Drug ETF by Bosera (159316) rose 2.46%. Overall, the industry is showing a two-engine drive pattern led by CXO pharmaceutical outsourcing services and innovative drugs based on ADC antibody-drug conjugates. Top-tier companies’ performance and order execution continue to materialize under high market conditions; the industry’s policy environment is stabilizing; and the sector’s allocation value is increasingly coming into view.

CXO leaders’ performance is showing steady recovery. WuXi Biologics (02359.HK) achieved double-digit revenue growth in 2025, and its TIDES peptide/oligonucleotide business delivered a doubling of growth, becoming a core growth engine. With ample in-hand orders, its revenue growth guidance for 2026 reached 18%-22%. As capacity utilization improves and the mix of higher-margin businesses increases, gross margin continues to improve, while its position in the global supply chain remains solid and revenue in the U.S. market maintains relatively fast growth.

ADC innovative drugs are gradually entering the harvesting period. Domestic commercialization of the core products is advancing steadily; once they are included in medical insurance, expectations for volume ramp-up are strengthening. Overseas clinical data will be read out gradually toward the end of 2026. The technology platforms continue to land and drive commercialization, and multiple licensing cooperation agreements have been reached with overseas pharmaceutical companies, with upfront payments and milestone revenue contributions standing out. The multi-target pipeline layout is improving, and combination regimens further expand growth room. CRDMO leaders in bioconjugate drugs have strong pipeline momentum, with in-hand orders growing year over year by more than 50%.

At the industry level, policy marginally continues to stabilize. Innovation drug review and approval and medical insurance negotiations are becoming normalized. The commercial capabilities of leading companies are being continuously validated. Globally, the division of labor across industrial chains is deepening; China’s pharmaceutical outsourcing and innovative drug R&D global share continues to increase. Industry concentration is rising, and the leading companies’ moat—built on technology, capacity, and customer advantages—keeps strengthening.

To seize the high-market-condition opportunities in the pharmaceutical sector, you can focus on two major core ETF targets: for the biopharmaceutical sector, the Hang Seng Biotech ETF by Bosera (159105); for the innovative drug sector, the HanTong Stock Connect Innovative Drug ETF by Bosera (159316).

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