Core Viewpoint - The Hong Kong pharmaceutical sector is experiencing a "valuation reversal," with H-shares transitioning from long-term discounts to premiums, particularly highlighted by the strong performance of leading innovative drug company Heng Rui Medicine, whose H-shares have shown a premium of over 20% compared to A-shares [1][4]. Group 1: Market Dynamics - The A+H pharmaceutical stocks have seen a significant shift in pricing logic, with the discount on Hong Kong stocks narrowing and some leading companies even turning to a premium [1][5]. - As of July 14, 2025, five companies, including Heng Rui Medicine, have reported positive premiums for their H-shares compared to A-shares, indicating a broader trend in the market [2][3]. - Heng Rui Medicine's H-shares have increased by over 29% since May 23, while A-shares have only risen by 10.19%, leading to a notable premium [4]. Group 2: Valuation Factors - The narrowing of discounts and the emergence of premiums in Hong Kong pharmaceutical stocks are attributed to the acceleration of innovation capabilities and the realization of value in the sector [7]. - The influx of southbound capital into Hong Kong stocks, particularly in leading companies like Heng Rui Medicine, has contributed to the narrowing of the long-standing price gap between A-shares and H-shares [7][8]. - The improvement of the Hong Kong Stock Connect mechanism has facilitated easier access for mainland institutional investors to invest in H-shares, enhancing liquidity and demand [8]. Group 3: Future Outlook - The trend indicates a potential long-term separation in the performance of H-shares, with companies that have strong internationalization and technological advantages likely to maintain premiums of 20%-30% [9][10]. - Companies that fail to innovate or adapt may face further valuation declines, leading to a market environment where stronger firms thrive while weaker ones are consolidated [9][10]. - The shift in valuation from liquidity-based pricing to value assessment based on global competitiveness is expected to reshape investor perceptions and enhance the attractiveness of Chinese pharmaceutical innovations [11].
再引活水，医药A+H股溢价格局“反转”