The stock price of HBM HOLDINGS-B (02142) has dropped by over 40% in the past 5 months, signaling a"sell" opportunity.

Since the stock price hit a high of 17.98 Hong Kong dollars in early September last year, HBM HOLDINGS-B (02142) stock price has been continuously fluctuating and falling. In early February this year, it dropped to a low of 10.61 Hong Kong dollars, with a range of fluctuations exceeding 40%. As of March 13, the stock price of HBM Pharmaceutical was 12 Hong Kong dollars, corresponding to a PE valuation of 18.18 times, lower than the industry average of 18.29 times. The performance of HBM Pharmaceutical in the secondary market has actually confused many investors. In terms of innovative pharmaceutical business, as a "top student in the recent years" of innovative pharmaceuticals in China, after HBM Pharmaceutical secured a 7 billion Hong Kong dollar BD deal in 2025, it also signed the first NewCo deal in the year of the horse. In terms of performance, HBM's annual profit for this year is expected to be between 88 million and 95 million US dollars (about 700 million Hong Kong dollars), with a significant innovative hematopoietic capability. However, the sluggish stock price contrasts sharply with the strong fundamentals. Is the BD deal a "sell" signal? It can be observed that since February this year, the Hong Kong stock market has performed poorly compared to global financial markets, with the Hang Seng Index falling by 2.8% in a single month, and the Hang Seng Technology Index falling by 10.1%, significantly underperforming major global stock indices. Recently, due to the surge in oil prices caused by the Middle East conflict, Brent and WTI crude oil futures prices have both exceeded 110 US dollars, triggering a chain reaction in global secondary markets. From the perspective of capital flow in the Hong Kong stock market, risk aversion sentiment in the market has strengthened the US dollar, leading global institutional investors to reduce their allocation of risk assets, causing capital to flow out of Hong Kong stocks. As a highly open market, capital outflows may put pressure on the index. Recently in the Hong Kong stock market, the Hang Seng Index briefly fell below the psychological level of 25,000 points. Data shows that in the second week of March, the daily average turnover of the Hong Kong Stock Exchange was 293.426 billion Hong Kong dollars, a decrease of 48.159 billion Hong Kong dollars from the previous week; the daily average short selling amount was 37.365 billion Hong Kong dollars, a decrease of 6.048 billion Hong Kong dollars from the previous week; the corresponding average daily ratio of short selling amount to turnover was 12.82%, an increase of 0.08 percentage points from the previous week. The situation of overall market liquidity indicates that the market may present a more structured characteristic. According to Open Source Securities, based on data from February this year, Hong Kong stocks have seen gains and losses in primary industries, with the software consumption service sector experiencing a significant pullback, and the pharmaceutical sector also experiencing a drop of around 5%. The market style is showing a "high-cut-low" defensive switch. Against the backdrop of changes in market style and temporary withdrawal of foreign capital, a typical capital market game behavior has emerged in the Hong Kong stock innovative pharmaceutical market - funds that have been pre-positioned in advance choose to take profits after the company's performance and BD realization, securing gains. Take HBM Pharmaceutical as an example. Before the market opened on February 23 this year, HBM Pharmaceutical announced that it would grant Solstice Oncology the global rights for its new generation CTLA-4 antibody HBM4003 in the Greater China region, with Solstice Oncology paying an initial consideration of over 105 million US dollars, including a down payment of 50 million US dollars, a near-term payment of 5 million US dollars, and equity worth over 50 million US dollars. In addition, HBM Pharmaceutical will also receive up to 1.1 billion US dollars in milestone payments and sales sharing. From a market point of view, after the disclosure of this huge BD transaction, it undoubtedly attracted a large number of bullish retail and institutional investors' attention, resulting in active market trading and ample liquidity: the trading volume of HBM Pharmaceutical reached 5.884 million shares that day, significantly exceeding the previous period. Under this background, a large amount of internal funding in HBM Pharmaceutical has been sold out, with large-scale selling by holding strategists, and the enormous selling pressure has quickly overwhelmed the new incoming buy orders, causing the stock price to open high and fall back. HBM Pharmaceutical's daily candlestick chart showed a significant long upper shadow, indicating a huge resistance above the stock price and weak support below. This was at the high point of HBM Pharmaceutical's stock price rebound in February, with bullish exhaustion compounded by overbought signals on the technical side, which quickly led to a pullback in the company's stock price, completing the operation of the internal stakeholders "selling on good news". True BD or "selling green shoots"? In recent years, from traditional License-out to derived NewCo, Co-Co model, and to the speculative form of "anticipated BD", the value of pharmaceutical BD has been repeatedly packaged and calculated, gradually exhausting the concept. Coupled with the recent hot concept of "selling green shoots", the market has had to carefully evaluate the true gold content behind each BD deal and analyze whether a company's BD is a "true BD" or "selling green shoots". The continuous increase in the threshold for value judgment in the secondary market undoubtedly becomes an important factor affecting the performance of HBM Pharmaceutical in the secondary market. Firstly, looking at the drug entity of this deal, the main variety of the HBM Pharmaceutical BD this time is a CTLA-4 fully humanized single chain antibody, HBM4003. CTLA-4, as a classic immune checkpoint, was once considered a thing of the past in the era of PD-1. It is known that CTLA-4's core pain point in previous research and development is its extremely narrow safety window. It is positioned upstream in the cascade immune activation pathways, and blocking CTLA-4 often leads to a more extensive and intense immune activation. However, this "broad-spectrum" activation comes at the cost of T cells indiscriminately attacking normal tissues. Compared to the occurrence of adverse reactions at a rate of about 10-15% with PD-1 blockade alone, when CTLA-4 is used as a single agent or in combination, the rate of adverse reactions often rises to over 50%. Companies like BMS, MacroGenics, etc., have encountered setbacks in their previous studies. In contrast, with the differentiated modification by HBM Pharmaceutical, HBM4003 has a molecular weight reduced to about 76 kDa, lighter compared to the traditional IgG (about 150 kDa), making it easier to penetrate dense tumor stroma and reach the core of the lesion. Its shorter serum half-life significantly reduces systemic immune adverse effects. In addition, in addition to the traditional CTLA-4 antibody mainly blocking the binding of CTLA-4 to ligand B7 to relieve T cell suppression, HBM4003 can also directly eliminate regulatory T cells (Tregs) in the tumor microenvironment: HBM4003 can enhance ADCC effect (antibody-dependent cell cytotoxicity) by modifying the Fc region, accurately eliminating these Tregs with high CTLA-4 expression, thereby fundamentally removing immune suppression. Clinical data shows that in a phase II trial treating refractory colorectal cancer patients with combination therapy with Pembrolizumab (PD-1), the objective response rate (ORR) of HBM4003 reached 34.8%, the disease control rate (DCR) reached 60.9%, and the vast majority of treatment-related adverse events were mild grade 1-2, with no severe grade 4 or above adverse events observed in clinical practice. In summary, HBM4003 can ensure strong anti-tumor activity from CTLA-4, while keeping safety risks within a manageable range. This is also the core element of HBM's 1.2 billion USD BD deal. Now back to the question of "selling green shoots." In fact, the domestic concern about Chinese innovative pharmaceutical companies "selling green shoots" essentially stems from the worry that domestic companies are giving away the future value and market potential of innovative drugs. However, looking at the NewCo contract this time, HBM Pharmaceutical's collaboration with Solstice Oncology is not a one-off authorization of global rights for HBM4003. In the initial consideration of over 105 million US dollars, HBM also included Solstice Oncology's equity worth over 50 million US dollars. This means that in addition to the up to 1.1 billion US dollars in milestone payments and sales sharing, by becoming a shareholder, HBM can also benefit further from capital operations such as Solstice Oncology's listing or acquisition, establishing a deep interest link with the cooperating company. Holding equity also allows HBM to participate in the development strategy formulation, clinical trial design, and commercialization promotion planning of HBM4003 in regions outside Greater China, further accumulating international commercialization experience, which is clearly not something that can be achieved by "selling green shoots". From the perspective of business advancement and company performance, the fundamentals of HBM remain relatively robust, while the continuous fluctuation of its stock price is related to the depth of the fluctuation in the overall Hong Kong stock market. Therefore, for HBM Pharmaceutical, which is currently undervalued compared to the industry average, whether its stock price performance is a "cut" or a "handover", different investors may have different interpretations.