HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>The 5th volume-based purchase (VBP) could be kicked off in May or June this year, and then officially implement in July.</li>
<li>The National Health Care Security Administration pays high attention to the promotion of "Internet +" medical insurance payment.</li>
<li>The specialized hospitals in China are expected to have more growth potential than general hospitals. 
</li>
</ul>Company news:News about the updated progress of new drugs from <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, and <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a>.Market review: Last week, stock price for healthcare sector in A share increased 2.81%, while CSI 300 increased 2.45% over the same period of time. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
The 5th volume-based purchase (VBP) could be kicked off in May or June this year, and then officially implement in July.
The National Health Care Security Administration pays high attention to the promotion of "Internet +" medical insurance payment.
The specialized hospitals in China are expected to have more growth potential than general hospitals. 

Company news:News about the updated progress of new drugs from Innovent Biologics Inc (1801 HK), Shanghai Henlius Biotech (2696 HK), and Everest Medicines (1952 HK).Market review: Last week, stock price for healthcare sector in A share increased 2.81%, while CSI 300 increased 2.45% over the same period of time. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

The presentation for Webinar: 2021 High Conviction - Investment Opportunities in China Healthcare Industry would mainly include the following parts:<ul>
<li>Stock performance review</li>
<li>Market review</li>
<li>Logic behind the rally of the stock price </li>
<li>Investment trend in 2021</li>
<li>Q&amp;A</li>
</ul>

The presentation for Webinar: 2021 High Conviction - Investment Opportunities in China Healthcare Industry would mainly include the following parts:
Stock performance review
Market review
Logic behind the rally of the stock price 
Investment trend in 2021
Q&amp;A


Presentation for Webinar: 2021 High Conviction-Investment Opportunities in China Healthcare Industry

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

We are no longer recommending an overweight to China (MSCI China) due to recent RS deterioration. Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS trends -- add exposure. MSCI EM Technology and Materials are our top two Sector overweights. Additionally, the EM Health Care Sector shows bullish price and RS inflections, making it a timely Sector to add exposure to at current levels.

We are no longer recommending an overweight to China (MSCI China) due to recent RS deterioration. Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS trends -- add exposure. MSCI EM Technology and Materials are our top two Sector overweights. Additionally, the EM Health Care Sector shows bullish price and RS inflections, making it a timely Sector to add exposure to at current levels.

Overweight EM Vs. EAFE; Dollar Weakness Continues

Throughout the year 2020, the COVID-19 had certain negative impact on the economy. The pharmaceutical industry has the attributes of relatively rigid demand and countercyclical, and some medical products and services were benefited from the epidemic. Therefore, in 2020/1H, the pharmaceutical industry outperformed the market significantly. As the epidemic in China has been effectively under control and the resumption of work and production has been comprehensively promoted, domestic investment hotspots have been frequently switched, and the pharmaceutical sector has undergone periodic adjustments. Besides, in 2020/2H, the advance of new volume-based purchasing policy in the field of drugs and high-value medical consumables also negatively impact the performance of healthcare sector. However, the development and potential of the China healthcare industry is still very promising, and there will be good investment opportunities in the future.

Throughout the year 2020, the COVID-19 had certain negative impact on the economy. The pharmaceutical industry has the attributes of relatively rigid demand and countercyclical, and some medical products and services were benefited from the epidemic. Therefore, in 2020/1H, the pharmaceutical industry outperformed the market significantly. As the epidemic in China has been effectively under control and the resumption of work and production has been comprehensively promoted, domestic investment hotspots have been frequently switched, and the pharmaceutical sector has undergone periodic adjustments. Besides, in 2020/2H, the advance of new volume-based purchasing policy in the field of drugs and high-value medical consumables also negatively impact the performance of healthcare sector. However, the development and potential of the China healthcare industry is still very promising, and there will be good investment opportunities in the future. 

2021 High Conviction - Investment Opportunities in China Healthcare Industry

On October 16, 2020, the government released a new policy for the intensive procurement of coronary stents, which kicked off the nationwide intensive procurement for high-value medical consumables. According to the policy, The amount of coronary stents purchased in the first year was around 1,074,000, accounting for about 70% of the national annual consumption of coronary stents. The results of this policy have a strong reference for the future expansion of high-value medical consumables' intensive procurement. On November 5, the policy was formally implemented and the result was released.

On October 16, 2020, the government released a new policy for the intensive procurement of coronary stents, which kicked off the nationwide intensive procurement for high-value medical consumables. According to the policy, The amount of coronary stents purchased in the first year was around 1,074,000, accounting for about 70% of the national annual consumption of coronary stents. The results of this policy have a strong reference for the future expansion of high-value medical consumables' intensive procurement. On November 5, the policy was formally implemented and the result was released.

Insights on China Healthcare Policy: New Intensive Procurement Policy for High-Value Medical Devices

China

Topchoice Medical Investment Corporation provides dental and oral health care services.

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Topchoice Medical (600763 CH)

China Healthcare Weekly (Apr.2)

This article analyzed the upcoming 5th volume-based purchase, the "Internet +" medical insurance payment, the specialized hospital market...

Xinyao (Criss) Wang

Presentation for Webinar: 2021 High Conviction-Investment Opportunities in China Healthcare Industry

This article summarized the content for the presentation in Smartkarma Webinar about the topic "2021 High Conviction - Investment opportunities in...

Xinyao (Criss) Wang

Overweight EM Vs. EAFE; Dollar Weakness Continues

Our favorite countries remain Taiwan (TAIEX) and India (SENSEX), while Brazil (Bovespa) and South Korea (KOSPI) display improving price and RS...

Vermilion Research

2021 High Conviction - Investment Opportunities in China Healthcare Industry

This article reviewed the performance of China healthcare industry in 2020 and analyzed good investment opportunities (innovative drugs, CRO/CDMO,...

Xinyao (Criss) Wang

Insights on China Healthcare Policy: New Intensive Procurement Policy for High-Value Medical Devices

The article analyzed potential impact of China's new intensive procurement policy on high-value medical devices. If interested in investing China...

Xinyao (Criss) Wang

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