On July 29, Hong Kong's three major indexes opened slightly lower but rebounded, driven by a strong pharmaceutical sector. At close, the Hang Seng Index rose 0.82% to 23,456 points, the Hang Seng Tech Index edged down 0.12%, and the State-owned Enterprises Index gained 0.65%. The pharmaceutical, biotech, and medical device sectors were standout performers, becoming the day's absolute market focus.
Policy Tailwinds Intensify, Accelerating Innovative Drug Approvals
On July 27, the National Medical Products Administration (NMPA) announced the formal implementation of the “Innovative Drug Review and Approval Acceleration Measures,” establishing a “30-day implied consent” system for clinical trial applications of eligible new drugs and setting up a breakthrough therapy “green channel.” On July 28, the National Healthcare Security Administration (NHSA) preliminarily revealed the 2026 medical insurance negotiation plan, proposing a price premium of no less than 15% for innovative drugs. These two pieces of news fully ignited optimistic expectations for the innovative drug track.
Multiple brokerages quickly upgraded their industry ratings. CITIC Securities pointed out that the policy shift from “supply-side reform” to “demand-side incentives” will accelerate the conversion of R&D investment into revenue for leading innovative drug companies, favoring a sector turnaround in the second half of the year.
Stock Highlights: CSPC Pharma Breaks Out on Volume, Innovent Biologics Hits Year High
Today's pharmaceutical sector saw rapid gains. Details:
- CSPC Pharmaceutical Group (01093.HK): Full-day turnover swelled to HKD 4.5 billion, with the stock price surging 9.2% to HKD 12.38, hitting a one-year high. Two of its anticancer drugs were included in the priority review list, with expectations of potential incremental contributions exceeding RMB 2 billion.
- Innovent Biologics (01801.HK): Rose 8.7% to HKD 48.5, intraday up over 11%. Its PD-1 monoclonal antibody received approval for a new indication, combined with medical insurance negotiation expectations, leading to heavy capital buying.
- BeiGene (06160.HK): Gained 6.9% to HKD 165.2, with overseas sales of zanubrutinib continuing to exceed expectations.
- Akeso (09926.HK): Up 7.4% to HKD 68.3, with promising clinical data for its bispecific antibody new drug.
On the downside, only a few small pharma companies saw corrections, such as Hua Medicine (02552.HK) falling 2.3%, while the overall market showed broad-based gains.
Capital Flows: Southbound Inflows Pour In, Pharma Net Inflows Exceed HKD 3 Billion
According to Wind data, today's net buying via the Southbound Stock Connect reached HKD 5.8 billion, of which the pharmaceutical sector accounted for HKD 3.26 billion, or 56%. Among the top ten active stocks, CSPC Pharmaceutical Group, Innovent Biologics, and WuXi Biologics (02269.HK) all saw net northbound buying exceeding HKD 500 million. Accelerating southbound capital inflows reflect strong demand from mainland investors for Hong Kong-listed pharmaceutical core assets.
Institutional Views: Bullish Medium-Term, Focus on Earnings Delivery
Multiple institutions shared their views:
- Morgan Stanley: Upgraded the pharmaceutical industry rating to “overweight,” believing Hong Kong innovative drug companies are undervalued historically, and policy inflection will drive earnings revisions.
- Goldman Sachs: Recommended overweighting leading companies with rich R&D pipelines, emphasizing that “the next six months are a golden window to position in pharma stocks.”
- CICC: Cautioned that sharp short-term gains may lead to pullbacks, but remains positive on the accelerated commercialization of innovative drugs in the medium to long term.
Outlook: Can the Hang Seng Index Hold?
The Hang Seng Index closed higher today supported by the pharmaceutical sector, but tech stocks underperformed, with internet giants Tencent (00700.HK) and Alibaba (09988.HK) both edging lower, showing market divergence. Analysts noted that if the pharmaceutical sector can continue to attract capital, coupled with expectations of expanded Stock Connect quotas, the Hang Seng Index may test the 23,800-point resistance level. Investors should watch the upcoming Federal Reserve meeting and earnings season guidance.
Overall, today's Hong Kong pharmaceutical rally is the result of both policy catalysts and valuation repair. It is recommended to maintain active attention and prioritize fundamentally solid leading companies.
