Cross-Market Biomedical Investment Analysis: Balancing Short-Term Fluctuations and Long-Term Growth

Based on the investment case of Qingqiao Sunshine Fund and the performance of the cross-market biomedical industry, I will analyze how to balance short-term market fluctuations and long-term intrinsic value growth in a cross-market investment portfolio.

From the chart data, it can be seen that the biomedical sectors in different markets showed significant differences during the 2024-2025 period:

• Hong Kong Biotech
  : The strongest performance, with a yield of 60.45%, volatility of 24%, and Sharpe ratio of 88.86
• XBI US Biotech
  : Yield of 38.00%, volatility of 18%, Sharpe ratio of 77.39
• A-share Biotech
  : Relatively moderate, with a yield of 25.29%, volatility of 10%, and Sharpe ratio of 94.36

According to search results, Qingqiao Sunshine Fund focuses on the following dimensions when selecting stocks [1]:

• Dao (Essence of Industrial Business)
  : Evaluate the fundamental value and sustainability of the business
• Tian (Industrial Trend)
  : Grasp the development direction and timing of the industry
• Unified Rating System
  : Establish a horizontally comparable framework for evaluating investment opportunities

From the data performance, the Q2-Q3 period of 2025 was a key node for the differentiation of performance across markets:

: Hong Kong innovative drugs have gone through a previous “falsification period”, and the market has become cautious about innovation expectations, providing a reasonable valuation buying opportunity for high-quality companies [1].

: Positive factors such as innovative drug overseas transactions, optimization of volume-based procurement policies, and the implementation of the innovative drug Category C medical insurance catalog in the first half of 2025 drove the continuous rise of the industry [4].

Although the Hong Kong market has high volatility (24%), it provides better value discovery opportunities. Qingqiao Sunshine Fund focuses on different areas at different times through strategic allocation within the industry:

• 2022 - H1 2024
  : Emphasize medical devices, de-emphasize innovative drugs
• Q2-Q3 2025
  : Shift to innovative drugs, seize the opportunity of valuation repair in Hong Kong stocks [1]

Time is a friend of excellent investment targets. Qingqiao Sunshine Fund emphasizes the additive characteristics of intrinsic value growth:

• Short-term fluctuations
  : Utilize pricing deviations when market sentiment overreacts
• Long-term growth
  : Focus on innovative pharmaceutical companies with world-class potential, especially screening future stars among non-profitable biomedical companies in Hong Kong stocks [1]

From the correlation analysis, it can be seen that the correlation between different markets changes dynamically, providing space for portfolio diversification. Through cross-market allocation, portfolio risks can be effectively managed while maintaining focus on the pharmaceutical industry.

Valuation level + Industrial trend + Policy catalyst = Allocation weight

• Hong Kong stock oversold period
  : Increase allocation, explore high-quality targets that are mistakenly sold off
• US stock mature period
  : Stable allocation, focus on clinical pipeline progress
• A-share policy period
  : Flexible allocation, closely follow changes in medical insurance policies

• Reverse thinking
  : Seek reverse opportunities during the industry falsification period
• Long-term holding
  : Give excellent enterprises enough time to realize value
• Professional judgment
  : Based on in-depth industry research rather than market sentiment

• Position control
  : No single market accounts for more than 60% of the portfolio
• Stop-loss discipline
  : Exit decisively when fundamentals deteriorate
• Rebalancing
  : Regularly evaluate and adjust cross-market allocation ratios

The position adjustment case of Qingqiao Sunshine Fund shows that in cross-market investment, balancing short-term fluctuations and long-term value growth requires establishing a systematic investment framework, which not only requires the discerning eye to identify value but also the determination to resist market fluctuations. Only by laying out high-quality targets during the market downturn through the strict standards of “High Value + Strong Dependence + High Growth” can long-term excess returns be achieved.

[0] Gilin API Data: Cross-market biomedical index analysis data
[1] Snowball Carnival Selected Collection: Qingqiao Sunshine Fund Investment Philosophy Sharing (https://xqdoc.imedao.com/1766a89ce4acc3fe01ca2481.pdf)
[4] CMB International Pharmaceutical Industry Strategy Report: 2025 Pharmaceutical Industry Outlook (https://www.cmbi.com.hk/upload/202507/20250707129836.pdf)