Southern Fund's Hong Kong Stock Connect Innovative Drug ETF Southern(159297) tracks an index that rose nearly 5%. The strategic position of the biopharmaceutical industry has been enhanced, and the innovative drug market is highly anticipated.

As of the close on March 6, 2026, the Southbound Innovation Drug ETF (159297) had a turnover rate of 15.32%, with a transaction volume of 245 million yuan. Market activity was lively, and the index tracked, the Guozheng Hong Kong Stock Connect Innovation Drug Index, rose by 4.7%.

Recently, the fundamentals of the innovative drug industry have continued to improve. The 2026 government work report explicitly listed biopharmaceuticals as a “new pillar industry” alongside integrated circuits, aerospace, and the low-altitude economy. It also proposed building a new pillar industry in biopharmaceuticals and promoting high-quality development of innovative drugs and medical devices, significantly elevating the industry’s status.

According to statistics, in just over two months since 2026, the total BD (business development) contract amount has exceeded 50 billion yuan, surpassing 40% of 2025. From the beginning of the year to now, BD transactions have achieved a clear breakthrough compared to last year. The normalization of BD is returning to product global value verification. Since 2020, license-out transaction volume and prices have risen simultaneously. The upfront payments and total contract amounts in 2024–2025 have continued to increase, with ADCs, bispecific antibodies, metabolism, and immunology becoming the main tracks for overseas expansion. Industry insiders generally believe that policy signals combined with continuous industry innovation are driving China’s biopharmaceutical industry into a new cycle of high-quality development, gradually becoming an important participant in the global pharmaceutical innovation system.

At the same time, attention should be paid to the potential innovative drug market from April to May. With major academic conferences such as AACR (April 17–22) and ASCO (May 29–June 2), domestic innovative drugs will enter a period of intensive data unblinding. Several key Phase 3 clinical results are expected to be released, presenting investment opportunities worth close attention.

The Southbound Innovation Drug ETF (159297) closely tracks the Guozheng Hong Kong Stock Connect Innovation Drug Index, which aims to reflect the operational characteristics of listed companies in the innovative drug sector within the Hong Kong Stock Connect scope. The top ten holdings are CSPC Pharmaceutical Group, Innovent Biologics, BeiGene, China Biologic Products, Kangfang Bio, Hansoh Pharma, Sanyuan Bio, Kelun-Bare Biological, Kangzhe Pharmaceutical, and Federal Pharmaceutical.

As a convenient tool for investing in the Hong Kong stock innovation drug sector, the Southbound Innovation Drug ETF (159297) is currently in a window of opportunity characterized by improving fundamentals, relatively low valuations, and upcoming catalysts. The industry trend is clear, and its long-term investment value is highly regarded.