China Biotechnology: Recent market concerns weigh on biotech valuations

Research evidence excerpt

China Biotechnology: Recent market concerns weigh on biotech valuations

23 June 2026

Equity Research Report

China Biotechnology EquitiesBiotechnology

Recent market concerns weigh on biotech valuations China

◆ The Hang Seng Innovative Drug Index is down 18% YTD, Linda Shu*, PhD (Reg. No. S1700522120001)

despite solid business development momentum Head of China Healthcare Research HSBC Qianhai Securities Limited

linda.y.l.shu@hsbcqh.com.cn

◆ Biotech valuations under pressure as AI stocks draw liquidity +86 755 88983246

Cindy Chai* (Reg. No. S1700523040001)

◆ We like Buy-rated Innovent, BeOne, Kelun Biotech and Akeso Analyst, China Healthcare Research

HSBC Qianhai Securities Limited

cindy.x.r.chai@hsbcqh.com.cn

Business up, valuations down. The Hang Seng Innovative Drug Index (HSIDI) is +86 21 5066 2005

down 18% YTD, despite the sector experiencing one of its strongest upswings in Andre Sun* (Reg. No. S1700526040001)

Analyst, China Healthcare

business development (BD) momentum. The total number of BD deals increased by HSBC Qianhai Securities Limited

30% and total deal size by 87% in the year to 31 May. We think this is because a andre.h.j.sun@hsbcqh.com.cn

+86 21 50662034

drop in liquidity has dented valuations in the Hong Kong biotech sector as investors

switched to AI supply chain names that offer near-term visible earnings rather than * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

innovative drugs which have a 3- to 5-year commercialisation horizon. Despite strong not registered/ qualified pursuant to FINRA regulations

clinical data at the 2026 American Society of Clinical Oncology meeting, Hong Kong

biotech stocks also slumped after the market started pricing in potential Fed rate

hikes.