Xin Lang Cai Jing·2025-10-10 02:15Core 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 Selective Index fell to a low of 6.14%, with major stocks like Innovent Biologics and China Biologic Products dropping over 10% and 7% respectively [1]. - During the previous week (September 29 - October 3), the index had gained 6.54%, reflecting a positive trend before the recent downturn [1]. Group 2: External Influences - On September 25, U.S. President Trump announced a 100% tariff on any brand or patented pharmaceutical products starting October 1, 2025, unless companies establish manufacturing facilities in the U.S. [1][3]. - This announcement is expected to directly impact Chinese innovative pharmaceutical companies that rely heavily on the U.S. market and do not have manufacturing plants in the U.S. [3]. Group 3: Future Outlook - Analysts from Southwest Securities predict that companies with high dependence on the U.S. market will face short-term pressure, while those utilizing business development (BD) strategies for international expansion will be less affected [3]. - Upcoming industry conferences, such as ESMO (October 17-21) and ASH (December), are anticipated to serve as catalysts for the innovative drug sector [3]. - The fund manager of the Hong Kong Stock Connect Innovative Drug ETF noted that the current market adjustment may provide 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 Selective Index, focusing exclusively on innovative drug research and development companies [4]. - The ETF 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].