HUTCHMED (00013): From following the sector to outperforming the sector, when will a new round of rally begin after the fundamentals are confirmed?

Since hitting a stage low of 2,938.07 points intraday on June 22, the Hang Seng Healthcare Index (800804) has gone through a three-month recovery. Based on the intraday high of 4,018.32 points on August 26, the sector's maximum gain over the period reached 36.77%. It is understood that as a stock that has risen and fallen almost in sync with the sector, HUTCHMED (00013) also staged a strong rally during this period, climbing from an intraday low of HK$15.57 on June 22 all the way to an intraday high of HK$23.56 on September 30, a maximum gain of 51.32% over the period, clearly outperforming the index. From low-level share price repair to "fundamental confirmation" From April 17 to June 22, under the dual impact of sluggish market sentiment and short-selling pressure, HUTCHMED's share price retreated by more than 35%. But after June 22, HUTCHMED's share price began to rebound, a performance also highly correlated with the sector trend over the same period. Although overall capital in the Hong Kong stock market continued to see net outflows at the time, the information technology and healthcare sectors maintained net inflows, and because the AI sector was still oscillating at high levels, some funds began looking for valuation depressions to rebalance assets. The pharmaceutical sector, with both defensive and growth attributes, became an important destination for spillover funds. This also became one of the main reasons HUTCHMED's share price began to repair from low levels. Driven by the sector-led low-level repair logic, HUTCHMED's share price surged on July 16, simultaneously touching the 60-day moving average and the upper Bollinger Band. Although the company's PE valuation at the time was only 4.55x, far below the industry average of more than 20x, and still in an oversold and undervalued state, the overheated short-term performance still led to a brief pullback after July 16, until the company disclosed its 26H1 financial report on July 30. On July 30, HUTCHMED officially disclosed its 2026 interim financial report. The report showed that the company achieved revenue of US$278 million for the period, up 0.22% year-on-year; net income attributable to shareholders was US$16.242 million, down 96.43% year-on-year. Market views on this interim report were clearly positive. On the one hand, the sharp decline in book net profit was due to the one-off gain from the sale of a 45% equity stake in the company's prescription drug business (Shanghai Hutchison) in the same period last year; on the other hand, in this financial report, HUTCHMED confirmed positives including the recovery of core product sales during the period, progress on the ATTC platform, later-stage clinical catalysts for savolitinib, and ample cash reserves. Especially on the business side, in the first half of this year, HUTCHMED's combined oncology and autoimmune product revenue reached US$162 million, up 13% year-on-year. Among them, fruquintinib outside the United States grew about 70% year-on-year, driving its global sales to US$185 million. In the domestic market, sales of fruquintinib and surufatinib grew 41% and 45% year-on-year, respectively. The growth performance of the innovative drug business also partly dispelled earlier market doubts about whether HUTCHMED could achieve steady growth after "weaning off" its prescription drug business. In short, HUTCHMED's 26H1 financial report provided fundamental support of "commercialization recovery + cash safety + pipeline catalysts." This also accelerated the shift in market sentiment from divergence to consensus. In fact, HUTCHMED's share price still closed down 1.34% the day after the financial report was disclosed, and the stock's trading volume that day expanded to about 2.78 times the average of the previous 5 days. This shows that after seeing the sharp drop in net profit, the market did not immediately price in "earnings beating expectations." But at the same time, the long lower shadow that day also reflected that investors inside and outside the market, after confirming HUTCHMED's interim results support, accelerated their reassessment of its forward expectations, and this result was ultimately reflected on the board on August 7. It was observed that on August 7, HUTCHMED's share price officially began its first volume-backed acceleration after the financial report disclosure. While the share price closed up 5.53%, trading volume also reached 6.53 times the average of the previous 5 days, with the corresponding turnover rate rising to 1.25%; on August 17, the company's share price closed up 4.64% again, while trading volume further expanded to 6.76 times the average of the previous 5 days. After expectations accelerate into reality, when will the "main upward wave" arrive? From the board performance after the interim report, it is not difficult to see that the dominant logic behind HUTCHMED's share price rise in this round is not traditional revenue and profit growth, but the market's repricing of its subsequent BD expectations after confirming the company's commercialization recovery support. Therefore, investors can easily see that HUTCHMED's share price performance from July 30 to now has not been a continuous steady rise, but rather included a pullback between August 19 and September 2. From a news perspective, during the above period, HUTCHMED announced on August 28 and August 31 respectively the launch of the new drug Ailinda (fruquintinib) and the latest research data for the combination therapy of Vorasidenib and Tagrisso, but this still could not stop the share price pullback trend at the time. The company's share price even briefly touched the lower Bollinger Band on September 2. It was not until midday during the lunch break on September 3 that HUTCHMED issued an announcement stating that the company had reached a global collaboration with GlaxoSmithKline (GSK) on the preclinical project HMPL-A830. Under the agreement, HUTCHMED will receive US$110 million upfront and total milestone payments of up to US$1.295 billion, plus sales-based royalties. It is worth mentioning that this project originated from HUTCHMED's independently developed ATTC platform, making it the first candidate drug discovered through this platform and out-licensed externally by HUTCHMED. After the announcement was disclosed, the market began repricing the value of HUTCHMED's ATTC platform that afternoon, with concentrated fund buying: the company's intraday share price rose as much as 16.41%, eventually closing up 14.32%; in terms of volume, the company's trading volume that day reached 35.9795 million shares, about 6.97 times the average of the previous 20 days, with the corresponding OBV indicator rising to 44.30 million shares. Such price-volume performance shows that the direction of capital accumulation that day was consistent with the direction of the price breakout, which to a certain extent indicates that the day was not simply an emotional pulse-driven move. After disclosing the BD transaction with GSK, HUTCHMED also received updated research reports from multiple institutions on September 4, including Daiwa, Citi, CLSA, and CICC. Among them, Citi raised its oncology/immunology product revenue forecast by 27%, and raised its target price from HK$36 to HK$39; while Daiwa upgraded HUTCHMED's rating by two notches from "Hold" to "Buy," with a corresponding target price raised to HK$28.5. However, although the above institutional judgments further strengthened HUTCHMED's short-term risk appetite, with the technical structure on the board clearly strengthening, HUTCHMED's share price instead showed a high-level divergence signal on September 4: it closed up only 3.02% that day, and trading volume fell to 18.364 million shares. This was immediately followed by a "five consecutive declines" in its share price and a subsequent repair-style rebound. It was observed that on September 14, HUTCHMED's share price rebounded strongly again after falling to touch the middle Bollinger Band the previous day, and then staged a rebound of about half a month through September 30. But this does not mean HUTCHMED has entered a new main upward wave. Although HUTCHMED's intraday high on September 30 had broken above the previous high of HK$23.40 on September 4, its closing price that day of HK$23.00 was still below HK$23.40, which may indicate that there is real trapped and profit-taking pressure in the HK$23.40-23.56 range. In addition, the company's trading volume on September 30 was only about 53.6% of that on September 4, and turnover was about 54.6% of that on September 4. Moreover, while the share price hit a new intraday high that day, the OBV indicator did not hit a new high in sync. The lack of sustained expansion in capital accumulation strength also partly verifies that in the current, there has not yet been a large-scale relay by incremental funds. Whether it can subsequently close with volume and stand above the previous high may become an important price-volume indicator for investors' technical assessment of whether HUTCHMED is likely to launch a new round of main upward wave.