Economic Observation Network China CITIC Securities has released a report stating that the valuation of the Boshi Hang Seng Medical ETF sector has a safety margin and is expected to see a valuation recovery in the third quarter.

Institutional perspective:
The core logic comes from the report of CITIC Securities on July 15th ：
Time window: The third quarter is a golden window for sector valuation recovery, as market funds are shifting from high priced sectors to undervalued and high growth pharmaceutical tracks.
Valuation Security: The Hang Seng Healthcare Index PE-TTM is 29.97 times, which is in the 18.91% percentile of the past 5 years, indicating that the valuation has been lower than 81% of the past 5 years, and the safety margin is sufficient.
Segmented opportunities: The commercialization of emerging fields such as medical devices (such as surgical robots, AI medical equipment) is accelerating, which is expected to see a dual repair of performance and valuation.

Fund inflow and outflow situation:
Although there has been a significant influx of southbound funds recently, attention should be paid to their sustainability. On July 7th, the ETF experienced a daily net outflow of 244 million yuan 。

Policy updates:
On July 14th, the results of the review of the adjustment of the medical insurance catalog were announced, with a high pass rate (91%), paving the way for innovative drugs to be included in medical insurance in the future. This is a key policy catalyst 。

Institutions believe that the current situation is a time of "low valuation+policy warmth" layout, but whether the market can continue depends on whether southbound funds continue to flow in and the actual results of subsequent innovative drug and medical insurance negotiations.

The above content is based on publicly available information and does not constitute investment advice.