ETF Daily (08.07) | With mid-term report performance exceeding expectations and the concentrated release of overseas dividends, the innovative drug ETF has strengthened across the board, while the gold sector continues to rise

According to Zhitong Finance APP, the Hong Kong stock market opened lower today but rose throughout the day, with the three major indices turning positive by the end. Leading companies reported better-than-expected mid-term results and raised their performance guidance, with overseas dividends being concentratedly released, leading to a comprehensive strengthening of innovative drug ETFs; expectations for interest rate hikes by the Federal Reserve have significantly cooled, and global central banks continue to increase their gold reserves, resulting in a continued rise in gold ETFs. By the close, the Hang Seng Index rose 0.54% to 25,668.03 points, with a total turnover of HKD 259.686 billion; the Hang Seng Tech Index rose 0.78% to 4,858.29 points. In terms of Hong Kong stock ETFs, among the products ranked by size, the Tracker Fund (02800) rose 0.62% to HKD 26.16; Southbound Hang Seng Tech (03033) rose 0.68% to HKD 4.766; Hang Seng China Enterprises (02828) rose 0.5% to HKD 87.98.

Industry Performance

1. Leading companies reported better-than-expected mid-term results, raised performance guidance, and overseas dividends were concentratedly released, leading to a comprehensive strengthening of innovative drug ETFs. By the close, the innovative drug ETF from E Fund (516080.SH) rose 7.06% to RMB 0.728; the Hong Kong Stock Connect innovative drug ETF from Wan Jia (520700.SH) rose 6.58% to RMB 1.571; the innovative drug ETF from Yinhua (159992.SZ) rose 6.56% to RMB 0.910.

WuXi AppTec (02359), BeiGene (06160), and other leading companies reported better-than-expected results and raised their performance guidance, combined with the "three-layer expansion" logic of AI drug development in the pharmaceutical industry. CITIC Securities believes that after the adjustment of the domestic CXO industry from 2022 to 2024, overseas orders have shown signs of recovery, coupled with the active overseas licensing of domestic innovative drug assets driving a rebound in investment and financing, it is expected that new orders and performance for domestic CRO/CDMO will accelerate growth by 2026. In addition, the National Medical Products Administration publicly solicited opinions in July on optimizing the review and approval of cell and gene therapy drugs, further strengthening market expectations for improved R&D efficiency in the CGT industry.

Guotai Junan Securities stated that the turning point for innovative drug companies to return to profitability has arrived, with a dense schedule of clinical data catalysts throughout the year, coupled with smooth overseas clinical progress of pipelines already BD overseas, optimistic about investment opportunities in the innovative drug sector. In terms of specific layout strategies: 1) Layout during the performance report window period, digging for targets with better-than-expected performance; 2) Pay attention to conference dynamics to seize the window for the release of significant clinical data; 3) Focus on core tracks, continuously monitor investment opportunities in related targets such as small nucleic acids, bispecific antibodies, and ADCs, and seize the dividend market during the industry's realization period.

2. Expectations for interest rate hikes by the Federal Reserve have significantly cooled, and global central banks continue to increase their gold reserves, resulting in a continued rise in gold ETFs. By the close, the gold stock ETF from Yongying (517520.SH) rose 3.99% to RMB 2.112; the gold stock ETF from Guotai (517400.SH) rose 3.3% to RMB 1.658; the gold stock ETF from Huaxia (159562.SZ) rose 3.2% to RMB 2.289.

Spot gold broke through USD 4,300 per ounce this week, reaching a seven-week high, supported by continued accumulation by global central banks and cooling expectations for interest rate hikes by the Federal Reserve. The ADP private sector added only 44,000 jobs in July, significantly below the market expectation of 70,000-75,000, and the June data was also revised down, indicating clear signs of cooling in the job market After the data was released, U.S. Treasury yields and the dollar weakened simultaneously, boosting gold prices from a valuation perspective. Guojin Securities believes that the disappointing U.S. ADP employment data for July has significantly cooled market expectations for Federal Reserve interest rate hikes, opening a "Davis Double Play" window for gold price valuation recovery and profit improvement, driving both volume and price increases in gold resource stocks.

Guojin Securities also stated that the trend of global central banks purchasing gold has restarted, the U.S. dollar credit system is loosening, and the trend of de-globalization continues, collectively forming a solid long-term bottom for gold prices. Previously, precious metals were suppressed by oil price pulses and temporary hawkish expectations triggered by the U.S.-Iran conflict, causing gold prices to retreat from high levels to around $4,000. However, the most liquidity-tight moments have passed, and as subsequent CPI and other data continue to decline, the macro shackles suppressing valuations are gradually being lifted.

Institutional Views

West Securities believes that the global AI narrative focus has shifted to China, strategically bullish on Hong Kong internet stocks. It previously indicated that the U.S. dollar index did not have obvious conditions for a significant decline in May-June, and Hong Kong stocks might experience a "final drop." Currently, it assesses that the dollar index is more likely to decline than to rise, and Hong Kong stocks have a strategic basis for bullishness. At the same time, the global AI narrative is also shifting from the North American chain to the domestic chain, from the computing power end to the application end, which is expected to open up upward space for Hong Kong internet stocks: the prosperity of the Chinese AI chain is beginning to catch up with the North American chain; the global AI narrative focus is shifting from hardware to applications; and funds in AI hardware are loosening, making it easier to flow into undervalued Hong Kong stocks.

ETF Trends

The Chemical ETF Bosera (158006.SZ) debuted, closing up 0.97% at 1.046 yuan, with a transaction volume of 156 million yuan; the fund tracks the CSI Sub-Industry Chemical Theme Index, focusing on cyclical resource themes and investing in leading stocks in the basic chemical, petrochemical, chemical raw materials, and chemical products sectors.

The NA Stock ETF E Fund (561890.SH) debuted, closing up 0.99% at 1.02 yuan, with a transaction volume of 198 million yuan; the fund tracks the CSI A-Share Index, with its top ten holdings including industry leaders such as CATL and Zhongji Xuchuang.

The N Medical Device ETF Huatai-PB (561810.SH) debuted, closing up 2.01% at 1.015 yuan, with a transaction volume of 89.9164 million yuan; the fund tracks the CSI All Index Medical Device Index, mainly covering three core directions of the medical device industry chain: medical equipment, medical consumables, and in vitro diagnostics.

The N Construction Machinery ETF Huaan (512420.SH) debuted flat, closing at 1 yuan, with a transaction volume of 76.0498 million yuan; the fund tracks the CSI Construction Machinery Theme Index, covering core product areas of construction machinery such as excavators, cranes, forklifts, and hydraulic components