HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

JD Health International  / Equity Capital Markets

On Dec 8th, <a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> went public on Hong Kong Stock Exchange, making it the largest IPO in Asia in 2020. Stock price of JD Health jumped more than 55% on the first day of trading. As of December 11th, its closing price was HK$112, with a total market value of HK$381.5 billion, not only more than the market value of <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a> and <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK),</a> but also surpassed a third of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a>'s latest market value of about HK$1 trillion. Getting the favor of the capital markets is only the first step on the journey. After the COVID-19, will its performance continue to achieve such high growth? In addition to online pharmacy business, how could JD Health find new and sustainable business growth points so as to establish its core competitive advantages?

On Dec 8th, JD Health (6618 HK) went public on Hong Kong Stock Exchange, making it the largest IPO in Asia in 2020. Stock price of JD Health jumped more than 55% on the first day of trading. As of December 11th, its closing price was HK$112, with a total market value of HK$381.5 billion, not only more than the market value of Alibaba Health Information Technology (241 HK) and Ping An Healthcare and Technology Company Limited (1833 HK), but also surpassed a third of JD.com (HK) (9618 HK)'s latest market value of about HK$1 trillion. Getting the favor of the capital markets is only the first step on the journey. After the COVID-19, will its performance continue to achieve such high growth? In addition to online pharmacy business, how could JD Health find new and sustainable business growth points so as to establish its core competitive advantages? 

JD Health (6618.HK) - Opportunities Coexist with Challenges

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.

China

Yifeng Pharmacy Chain Co., Ltd. operates as a chain of retail stores that specialize in pharmaceutical and over the counter remedies and personal care products.

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Yifeng Pharmacy Chain (603939 CH)

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