On July 29, 2026, the Hong Kong stock market showed divergent trends throughout the day. The Hang Seng Index closed slightly down 0.23% at 19,534 points, but the Hang Seng Healthcare Index rose 1.86% against the trend, becoming one of the brightest sectors today. Among them, BeiGene (06160.HK) rose 8.2%, Innovent Biologics (01801.HK) rose 6.5%, and Akeso (09926.HK) rose 5.4%, driving the innovative drug segment to strengthen collectively.
Policy Boost Continuously Unfolds
Last night, the National Medical Products Administration (NMPA) issued the "Several Measures to Further Optimize the Review and Approval of Innovative Drugs," clearly merging and simplifying processes such as breakthrough therapy drugs and conditional approval. For clinically urgent oncology and rare disease drugs, the review period is expected to be shortened to within 6 months. At the same time, the document proposes a green channel of "simultaneous review and approval" for eligible traditional Chinese medicine innovative drugs. This is another substantive positive policy following the first half's "Implementation Plan for Full-Chain Support for Innovative Drug Development."
Industry analysts pointed out that the new policy will directly accelerate the monetization process of drug companies' R&D pipelines, especially for Biotech companies with differentiated targets and clinical data. Hong Kong stocks, as a major listing venue for innovative drug companies, have gathered over 50 unprofitable biotech companies, and the policy dividend's boosting effect on sector valuation is particularly significant.
Interim Results Catalyze Market
Entering late July, Hong Kong-listed pharmaceutical companies have successively disclosed their 2026 interim performance forecasts. As of now, more than ten companies have forecasted net profit year-on-year growth of over 50%. Among them, Innovent Biologics announced that its core product PD-1 inhibitor sales increased 35% year-on-year and achieved a turnaround to profitability; BeiGene benefited from the global volume expansion of Zanubrutinib, with revenue growth exceeding 40%. Better-than-expected results have become a catalyst for phased capital inflows.
Southbound capital net bought HK$2.6 billion in Hong Kong stocks today, with the biomedical sector net inflow of HK$780 million, ranking first among all industries. Southbound funds have recently preferred defensive growth sectors, and the performance certainty and policy support of pharmaceutical stocks make them a top allocation choice.
Sector Valuation and Risks Coexist
Despite the short-term high enthusiasm, the valuation risk of the biomedical sector cannot be ignored. Currently, the Hang Seng Healthcare Index has a P/E ratio (TTM) of about 35 times, at a mid-to-high level in the past three years. Some individual stocks such as Keymed Biosciences and RemeGen have risen sharply due to pipeline progress expectations. UBS Hong Kong stock strategist pointed out that innovative drug companies need to pay attention to clinical trial data, the extent of price cuts in medical insurance negotiations, and uncertainties in overseas market expansion. Investors should be cautious about chasing highs.
From the perspective of institutional moves, some long-term funds have reduced positions in the second quarter, but short-term hot money remains active. Market participants suggest focusing on leading companies with commercialization capabilities and ample cash flow, while using technical indicators such as RSI and MACD to determine buying points, avoiding chasing up and selling down.
Outlook
Looking ahead to August, the Hong Kong biomedical sector still has many event drivers: early August will see multiple international medical conferences releasing clinical data, and the National Healthcare Security Administration plans to organize a new round of national medical insurance negotiations in late August, where innovative drug varieties are expected to obtain reasonable pricing. Huachuang Securities believes that in a low-interest-rate environment, Hong Kong innovative drug assets have valuation revaluation momentum, suggesting investors select targets from two dimensions: R&D pipeline and sales pipeline.
Overall, today's strong performance of the biomedical sector is the result of the resonance of policy, performance, and capital. Investors should focus on the long term, pay attention to "true growth" companies with core competitiveness and relatively reasonable valuations, while being wary of the risk of a pullback after short-term overheating sentiment. The HK Stock Barometer column will continue to track market changes and bring you timely interpretation.
