Core Viewpoint - The recent draft proposal from the National Healthcare Security Administration aims to optimize drug procurement policies, which may reshape investor confidence in the pharmaceutical sector and benefit quality generic drug companies [3][4]. Group 1: Market Performance - As of March 31, 2025, the Hang Seng Healthcare Index (HSHCI) increased by 0.02%, with notable gains from companies such as Lepu Biopharma-B (up 4.72%) and Hansoh Pharmaceutical (up 4.66%) [1]. - The Hang Seng Healthcare ETF (513060) rose by 0.84%, with a latest price of 0.48 HKD and a trading volume of 230 million HKD, ranking in the top third among comparable ETFs [1]. Group 2: Policy Changes - The draft proposal includes six main areas of optimization: procurement variety and bidder standards, bidding rules, quantity rules, implementation measures, quality assessment, and information transparency [3]. - The adjustments aim to eliminate the previous low-price bidding rule, prevent malicious low bidding by companies, and ensure stable supply through a "stockout" mechanism [3]. Group 3: Investment Insights - The recent draft is expected to restore investor confidence in hospital medication, potentially benefiting quality generic drug companies and those with significant market space [4]. - The Hang Seng Healthcare ETF has seen a growth of 270 million HKD in scale over the past six months, with a financing buy-in amount of 420 million HKD and a financing balance of 576 million HKD [4]. Group 4: Performance Metrics - Since its inception, the Hang Seng Healthcare ETF has achieved a maximum monthly return of 28.34% and an average monthly return of 7.00% [4]. - As of March 28, 2025, the ETF's maximum drawdown this year was 6.06%, the smallest among comparable funds, with a management fee of 0.50% and a custody fee of 0.15% [5]. - The ETF's tracking error was 0.032%, the highest tracking precision among comparable funds, and its latest price-to-earnings ratio (PE-TTM) was 25.15, indicating a valuation below 97.83% of the past year [5]. Group 5: Top Holdings - The top ten weighted stocks in the Hang Seng Healthcare Index account for 55.69% of the index, including WuXi Biologics (02269) and BeiGene (06160) [5].