On September 28, A-shares underwent a deep correction, yet the pharmaceutical sector once again demonstrated resilience, with the sector as a whole significantly outperforming the broader market, while internal structural divergence remained pronounced.
The biotech segment was led by innovative drugs, with traditional Chinese medicine lending support: Livzon Pharmaceutical Group hit the daily limit, while Apeloa Pharmaceutical and Health-Mate rose nearly 6%. Traditional Chinese medicine stocks Yunnan Baiyao and Dong-E-E-Jiao closed higher, and the pharmaceutical index tracked by Pharma ETF Huabao (562050) closed up against the market trend.
Medical devices and CXO provided localized resonance to bolster healthcare: heavyweight leaders Mindray Medical and United Imaging Healthcare rose 2.88% and 3.39% respectively, while Asymchem gained 1.25%. The CSI Medical Index tracked by Medical ETF Huabao (512170) edged down 0.14%.
Since September, pharmaceuticals have frequently outperformed against the market trend. What supports this defensive strength?
Recently, the industry has seen a rare convergence of policy and industrial catalysts in recent years. On September 18, the "15th Five-Year Plan for Pharmaceutical Industry Development" was released, proposing multiple quantitative targets, including: by 2030, the innovative drug industry scale should achieve an average annual growth rate of over 20%, with first-in-class (FIC) drugs accounting for over 25% of the global total; and the cumulative number of innovative medical devices approved should exceed 200.
On the industrial side, following the World Conference on Lung Cancer (WCLC), the latest breakthrough abstracts from the European Society for Medical Oncology (ESMO) congress further strengthened internationalization expectations for domestic ADC and bispecific antibody drugs. Meanwhile, China's innovative drug BD overseas expansion momentum remains strong, with AIDD (AI-assisted drug discovery) major events landing intensively.
From a trading perspective, pharmaceuticals stand out for their oversold attributes, and relatively high investment cost-effectiveness has attracted "high-to-low" rotation capital attention. As of market close, the price-to-earnings ratios (TTM) of the underlying indices for Pharma ETF Huabao (562050) and Medical ETF Huabao (512170) stood at 29.12 times and 30.46 times respectively, located at the 10.86% and 25.44% percentiles over the past 10 years, with valuation levels at historically relatively low positions.
Zhang Fang, fund manager of Pharma ETF Huabao (562050) and Medical ETF Huabao (512170), pointed out that the main investment theme in pharmaceuticals may be shifting from the earlier "undervaluation repair" to being driven by "innovation realization," while the AIDD industry chain provides new structural opportunities. Comprehensive judgment suggests that the medium-term allocation value of pharmaceuticals remains, current valuation percentiles are not high, policies support innovation, and some sub-sectors continue to show prosperity, warranting continued attention going forward.
Related investment tools of interest: Pharma ETF Huabao (562050): the only ETF in the entire market tracking the pharmaceutical index, with an exclusive allocation of "70% innovative drugs + 20% traditional Chinese medicine," combining the high growth of innovative drugs with the high dividends of traditional Chinese medicine. Off-exchange feeder fund: 024986.
Medical ETF Huabao (512170): a flagship pharmaceutical and healthcare ETF, with second-quarter report scale of 25.624 billion yuan. Focused on medical devices + medical services (CXO content exceeding 30%), while also covering AI healthcare. Off-exchange feeder fund: 012323.
【Data Source】 Public information from Shanghai-Hong Kong-Shenzhen exchanges, China Securities Index Company, Hang Seng Index Company, etc. Weight data as of August 31, 2026.
【Fund Fee Rates】 ETF funds do not charge sales service fees. When investors subscribe or redeem fund shares, subscription and redemption agent brokers may charge a commission at a standard not exceeding 0.5%, which includes related fees charged by stock exchanges, registration institutions, etc. Fund fee rates are detailed in each fund's legal documents.
【Special Notice】 The risk level assessed by the fund manager for Medical ETF Huabao and its feeder fund is R4-medium-high risk, suitable for aggressive (C4) and above investors. The risk levels for Pharma ETF Huabao and its feeder fund, as well as Medical ETF Huabao, are R3-medium risk, suitable for balanced (C3) and above investors.
【Risk Warning】 The index constituent stocks mentioned in this article are for display purposes only. Individual stock descriptions do not constitute investment advice in any form, nor do they represent the holdings information or trading activities of any fund under the management company. The constituent stocks of the underlying index are adjusted from time to time according to the index compilation rules. Any information appearing in this article (including but not limited to individual stocks, comments, predictions, charts, indicators, theories, and any form of expression) is for reference only, and investors must be responsible for their own independent investment decisions. In addition, any views, analyses, and predictions in this article do not constitute investment advice in any form to readers, nor shall they bear any responsibility for direct or indirect losses caused by the use of the content of this article. Fund investment involves risks, past performance of funds does not represent future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Fund investment requires caution. MACD golden cross signals have formed, and these stocks are performing well!