HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

With the deepening of medical reform and the continuous promotion of medical insurance fee control policies such as the consistency evaluation and volume-based purchase policy, the process of prescription outflow is accelerated. The decline in in-hospital drug sales has been accompanied by a shift in sales channels to out-of-hospital market, such as the retail pharmacies. Besides, with the improvement of public healthcare demand and the increase of commercial insurance coverage, there is a growing demand for various kinds of drugs. It is expected that retail pharmacies will become a necessary and indispensable trend.

With the deepening of medical reform and the continuous promotion of medical insurance fee control policies such as the consistency evaluation and volume-based purchase policy, the process of prescription outflow is accelerated. The decline in in-hospital drug sales has been accompanied by a shift in sales channels to out-of-hospital market, such as the retail pharmacies. Besides, with the improvement of public healthcare demand and the increase of commercial insurance coverage, there is a growing demand for various kinds of drugs. It is expected that retail pharmacies will become a necessary and indispensable trend.

Industry Report - Investment Opportunity in China Retail Pharmacy Market

1.Industry viewpoints:<ul>
<li>Recently, the National Medical Products Administration has released a new policy (draft version) about the online drug sales.</li>
<li>Vaccine is a hot topic in 2020, so let’s talk about vaccine.</li>
<li>The upsurge in the application of AI in medical imaging in China provides a new direction for the development, which may be the most promising field for China to surpass foreign countries.</li>
</ul>2. Company news:News about the updated progress of new drugs and the marketing approval of new products from <a href="https://www.smartkarma.com/entities/betta-pharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:25883:1" rel="noopener">Betta Pharmaceuticals (300558 CH)</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a> , Kangpu Biopharmaceuticals, and <a href="https://www.smartkarma.com/entities/venus-medtech-hangzhou-inc" target="_blank" data-smartkarma-citation="entities:28257:1" rel="noopener">Venus MedTech (2500 HK).</a>3. Market review:Last week, stock price for healthcare sector in A share decreased 1.43%, while CSI 300 increased 1.78% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1.Industry viewpoints:
Recently, the National Medical Products Administration has released a new policy (draft version) about the online drug sales.
Vaccine is a hot topic in 2020, so let’s talk about vaccine.
The upsurge in the application of AI in medical imaging in China provides a new direction for the development, which may be the most promising field for China to surpass foreign countries.
2. Company news:News about the updated progress of new drugs and the marketing approval of new products from Betta Pharmaceuticals (300558 CH), BeiGene Ltd (6160 HK) , Kangpu Biopharmaceuticals, and Venus MedTech (2500 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 1.43%, while CSI 300 increased 1.78% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Equity Capital Markets

JD Health International  / Equity Capital Markets

According to Analysys, the market size of China's online healthcare business was RMB133.7 billion in 2019, up 35.6% YoY. Due to the epidemic, the market size is expected to reach RMB200 billion in 2020, with a growth rate of 49.6%, which is the highest growth rate since 2015. With huge growth potential of the online healthcare business, <a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (JDH HK)</a> filed its IPO prospectus with the Hong Kong Stock Exchange on September 27. The Company is planning to raise at least $3 billion in the IPO.

According to Analysys, the market size of China's online healthcare business was RMB133.7 billion in 2019, up 35.6% YoY. Due to the epidemic, the market size is expected to reach RMB200 billion in 2020, with a growth rate of 49.6%, which is the highest growth rate since 2015. With huge growth potential of the online healthcare business, JD Health (JDH HK) filed its IPO prospectus with the Hong Kong Stock Exchange on September 27. The Company is planning to raise at least $3 billion in the IPO. 

Pre-IPO JD Health (JDH.HK) - A Better Candidate of Online Healthcare Business In China?

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

In our weekly Shanghai/Shenzhen Connect Ideas series, we aim to help our investors understand the flow of northbound trades via the Shanghai and Shenzhen Connect, as analyzed by our proprietary data engine and highlight interesting trade ideas. We split the stocks eligible for the Shanghai/Shenzhen Connect trade into two groups: stocks with a market capitalization above USD 5 billion, as well between USD 1 billion and USD 5 billion.In this insight, we will highlight the consecutive two weeks of net outflow from the A-share market. We will also briefly discuss Hikvision, Muyuan, Moutai, and Wuliangye.

In our weekly Shanghai/Shenzhen Connect Ideas series, we aim to help our investors understand the flow of northbound trades via the Shanghai and Shenzhen Connect, as analyzed by our proprietary data engine and highlight interesting trade ideas. We split the stocks eligible for the Shanghai/Shenzhen Connect trade into two groups: stocks with a market capitalization above USD 5 billion, as well between USD 1 billion and USD 5 billion.In this insight, we will highlight the consecutive two weeks of net outflow from the A-share market. We will also briefly discuss Hikvision, Muyuan, Moutai, and Wuliangye. 

Shanghai/Shenzhen Connect Ideas: Technologies, Porks and Hard Liquors (2019-05-17)

In our Discover SZ/SH Connect series, we aim to help our investors understand the flow of northbound trades via the Shanghai Connect and Shenzhen Connect, as analyzed by our proprietary data engine. We will discuss the stocks that experienced the most inflow and outflow by offshore investors in the past seven days.We split the stocks eligible for the northbound trade into three groups: those with a market capitalization of above USD 5 billion, and those with a market capitalization between USD 1 billion and USD 5 billion.We note that in March, northbound inflows turned more cautious vs strong inflows in February (link to our <a href="https://www.smartkarma.com/insights/shanghai-shenzhen-connect-8-4-bn-inflows-in-february-kweichow-moutai-aier-eye-luxshare" target="_blank">Feb note</a>) and January (link to our <a href="https://www.smartkarma.com/insights/shanghai-shenzhen-connect-8-5-bn-of-inflow-in-january-kweichow-moutai-gree-midea" target="_blank">Jan note</a>). Nevertheless we see strong inflows into Healthcare sector, led by <a href="https://www.smartkarma.com/entities/14128" target="_blank" data-smartkarma-citation="entities:14128:1">Jiangsu Hengrui Medicine Co., (600276 CH)</a>. We also highlight Universal Scientific Industrial Shanghai (601231 CH 环旭电子) in the mid cap space that attracted strong northbound inflows.

In our Discover SZ/SH Connect series, we aim to help our investors understand the flow of northbound trades via the Shanghai Connect and Shenzhen Connect, as analyzed by our proprietary data engine. We will discuss the stocks that experienced the most inflow and outflow by offshore investors in the past seven days.We split the stocks eligible for the northbound trade into three groups: those with a market capitalization of above USD 5 billion, and those with a market capitalization between USD 1 billion and USD 5 billion.We note that in March, northbound inflows turned more cautious vs strong inflows in February (link to our Feb note) and January (link to our Jan note). Nevertheless we see strong inflows into Healthcare sector, led by Jiangsu Hengrui Medicine Co., (600276 CH). We also highlight Universal Scientific Industrial Shanghai (601231 CH 环旭电子) in the mid cap space that attracted strong northbound inflows.

Shanghai/Shenzhen Connect - Inflow Turned Cautious in March but MSCI Adjustment Ahead

China

Yixintang Pharmaceutical Group Co., Ltd. operates pharmaceutical stores. The Company retails Chinese medicines, western medicines, and other products. Yixintang Pharmaceutical Group also provides medical equipment.

Yixintang Pharmaceutical Group (002727 CH)

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Yixintang Pharmaceutical Group (002727 CH)

Industry Report - Investment Opportunity in China Retail Pharmacy Market

The article analyzed China retail pharmacy market, retail pharmacy chain, related policy, and highlight good investment opportunity such as...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov. 20)

The article summarized the new healthcare policy released, major industry viewpoints, company news and capital market review in China healthcare...

Xinyao (Criss) Wang

Pre-IPO JD Health (JDH.HK) - A Better Candidate of Online Healthcare Business In China?

In this article, not only the business model of JD Health are analyzed, but also include the insightful industry data about China's pharmaceutical...

Xinyao (Criss) Wang

Shanghai/Shenzhen Connect Ideas: Technologies, Porks and Hard Liquors (2019-05-17)

In our weekly Shanghai/Shenzhen Connect Ideas series, we aim to help our investors understand the flow of northbound trades via the Shanghai and...

Ke Yan, CFA, FRM

Shanghai/Shenzhen Connect - Inflow Turned Cautious in March but MSCI Adjustment Ahead

In our Discover SZ/SH Connect series, we aim to help our investors understand the flow of northbound trades via the Shanghai Connect and Shenzhen...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)