‘We are on an upcycle in the industry and sentiment is very strong,’ Xufunds Investment fund manager Wang Chen says
Chinese biopharmaceutical stocks have become extremely popular with investors this year amid strong policy support and a rise in licensing deals with multinational companies.
A more than 100 per cent gain in the Hang Seng innovative drug index this year is an indication of the euphoria sweeping the sector. Key industry players such as Hansoh Pharmaceutical Group and WuXi Biologics, which are also members of the Hang Seng Index, have more than doubled year to date.
The trade is reminiscent of the red-hot gains earlier this year in technology stocks, which were turbocharged by start-up DeepSeek’s launch of its artificial intelligence model and Beijing’s push to make the tech industry self-reliant. Years of policy support for the biotech industry – including significantly cutting the time for regulatory approvals – are bearing fruit, generating a long pipeline of innovative drugs that are now in development.
“China regards the biotech industry as a strategic one and that [support] is very important for the development of the sector,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai. “We are on an upcycle in the industry and sentiment is very strong.”
