Xin Lang Ji Jin·2025-10-09 02:42Core Viewpoint - The Hong Kong pharmaceutical sector experienced a significant decline on October 9, with the Hang Seng Biotechnology Index dropping over 5%, influenced by external factors such as U.S. tariff announcements on pharmaceutical products [1][3]. Group 1: Market Performance - The Hang Seng Hong Kong Stock Connect Innovative Drug ETF (520880) saw a decline of over 1% after initially opening up 1.75% [1]. - The Hang Seng Hong Kong Stock Connect Innovative Drug Selected Index recorded a weekly increase of 6.54% during the previous week, reflecting a positive trend before the recent downturn [1]. - Notable declines were observed in key stocks, with Innovent Biologics and China Biologic Products falling over 8% and 7% respectively [1]. Group 2: External Influences - U.S. President Trump's announcement on September 25 regarding a 100% tariff on pharmaceutical products without U.S. manufacturing facilities starting October 1, 2025, has raised concerns for Chinese innovative drug companies heavily reliant on the U.S. market [1][3]. - Southwest Securities predicts that companies with direct export capabilities to the U.S. without local manufacturing will face short-term pressure, while those utilizing business development (BD) strategies will be less affected [3]. Group 3: Future Outlook - Upcoming industry conferences, such as ESMO (October 17-21) and ASH (December), are expected to serve as catalysts for the innovative drug sector [3]. - The fourth quarter will see the implementation of domestic policy changes, including adjustments to the medical insurance catalog, which may impact the sector positively [3]. - The fund manager of the Hong Kong Stock Connect Innovative Drug ETF (520880) indicated that the current market adjustment could present a buying opportunity for high-quality innovative drug companies [3]. Group 4: ETF Characteristics - The Hong Kong Stock Connect Innovative Drug ETF (520880) is the first ETF tracking the Hang Seng Hong Kong Stock Connect Innovative Drug Selected Index, focusing exclusively on innovative drug R&D companies [4]. - The index has shown a year-to-date increase of 119.75%, outperforming other innovative drug indices, and aims to avoid the influence of contract research organizations (CROs) on its performance [5].