HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The current policy environment determines that TCM is the core asset of pharmaceuticals, not innovative drugs. We think it is necessary to take a fresh look at TCM industry.</li>
<li>TCM formula granules have more opportunities. Exclusive variety of branded OTC TCM has better outlook. TCM medical services also deserve investors’ attention, because hospitals are the main channels for TCM. </li>
<li>China's pharmaceutical industry has its unique features. We recommend investors to leave a place in the portfolio to invest in TCM companies, which could outperform in the current pharmaceutical environment.</li>
</ul>


The current policy environment determines that TCM is the core asset of pharmaceuticals, not innovative drugs. We think it is necessary to take a fresh look at TCM industry.
TCM formula granules have more opportunities. Exclusive variety of branded OTC TCM has better outlook. TCM medical services also deserve investors’ attention, because hospitals are the main channels for TCM. 
China's pharmaceutical industry has its unique features. We recommend investors to leave a place in the portfolio to invest in TCM companies, which could outperform in the current pharmaceutical environment.


China Traditional Chinese Medicine (TCM) Industry - TCM Is Becoming Indispensable in the Portfolio

<ul>
<li>The recent rally in TCM sector is mainly driven by new favorable policies, but it may not be sustainable. It could also squeeze out the development space of innovative drugs. </li>
<li>The concerns on TCM mainly include limited medical insurance fund, VBP on TCM, difficulties in internationalization, unclear adverse reactions and contradiction with ESG investment philosophy.</li>
<li>In China, it's not wise to go against policy.Therefore, a smart play in the short term is to “follow the policy”.We analyzed different TCM varieties to identify good investment opportunities.</li>
</ul>


The recent rally in TCM sector is mainly driven by new favorable policies, but it may not be sustainable. It could also squeeze out the development space of innovative drugs. 
The concerns on TCM mainly include limited medical insurance fund, VBP on TCM, difficulties in internationalization, unclear adverse reactions and contradiction with ESG investment philosophy.
In China, it's not wise to go against policy.Therefore, a smart play in the short term is to “follow the policy”.We analyzed different TCM varieties to identify good investment opportunities.


The Concerns and Outlook About the Recent Rally in Traditional Chinese Medicine (TCM) Sector

Industry viewpoints:<ul>
<li>Thoughts and concerns on domestic pharmaceutical companies.</li>
<li>Quite a few policies about the VBP on Chinese patent medicine have been launched in some provinces.</li>
<li>Foreign companies have made good preparation for the upcoming 2021 medical insurance negotiation on their PD-1/L1 products. 
</li>
</ul>Company news:News about the updated progress on M&amp;A deal and new drugs of <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK),</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> and <a href="https://www.smartkarma.com/entities/luye-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:488:1" rel="noopener">Luye Pharma (2186 HK)</a>.Market review:Last week, stock price for healthcare sector in A share increased 0.69%, while CSI 300 increased 1.31% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Thoughts and concerns on domestic pharmaceutical companies.
Quite a few policies about the VBP on Chinese patent medicine have been launched in some provinces.
Foreign companies have made good preparation for the upcoming 2021 medical insurance negotiation on their PD-1/L1 products. 

Company news:News about the updated progress on M&amp;A deal and new drugs of Microport Scientific (853 HK),BeiGene Ltd (6160 HK) and Luye Pharma (2186 HK).Market review:Last week, stock price for healthcare sector in A share increased 0.69%, while CSI 300 increased 1.31% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly (Oct.8)-Summary of Concerns on Pharma Companies, VBP on TCM, Q4 PD-1 Bidding

Industry viewpoints:<ul>
<li>Recently, the results of the 7th demographic census was released, which is expected to drive the demand of the assisted reproduction industry.</li>
<li>The Ministry of Commerce, the State Administration of Traditional Chinese Medicine (TCM) and other seven departments jointly issued an announcement to support the development of TCM service trade and the promotion of TCM going global.</li>
<li>The room for import substitution in China chromatography packing/chromatographic medium industry would be very large.</li>
</ul>Company news:News about the updated progress on drugs and acquisition of <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/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical Electronics (300760 CH)</a>, <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> and <a href="https://www.smartkarma.com/entities/innocare-pharma-ltd" target="_blank" data-smartkarma-citation="entities:28355:1" rel="noopener">InnoCare Pharma Ltd (9969 HK)</a>.Market review:Last week, stock price for healthcare sector in A share decreased 0.69%, while CSI 300 increased 0.46% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Recently, the results of the 7th demographic census was released, which is expected to drive the demand of the assisted reproduction industry.
The Ministry of Commerce, the State Administration of Traditional Chinese Medicine (TCM) and other seven departments jointly issued an announcement to support the development of TCM service trade and the promotion of TCM going global.
The room for import substitution in China chromatography packing/chromatographic medium industry would be very large.
Company news:News about the updated progress on drugs and acquisition of Innovent Biologics Inc (1801 HK), Shenzhen Mindray Bio-Medical Electronics (300760 CH), Everest Medicines (1952 HK) and InnoCare Pharma Ltd (9969 HK).Market review:Last week, stock price for healthcare sector in A share decreased 0.69%, while CSI 300 increased 0.46% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:<ul>
<li>An important document supporting the development of the traditional Chinese medicine industry has been released recently.</li>
<li>The market size of cardiac pacemakers in China is expected to reach RMB28 billion in the future.</li>
<li>China's health care products market is expected to maintain rapid growth in the future. </li>
</ul>2. Company news:News about the progress of new drugs and strategic collaboration 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/sihuan-pharmaceutical-hldgs" target="_blank" data-smartkarma-citation="entities:33:1" rel="noopener">Sihuan Pharmaceutical Hldgs (460 HK)</a> and <a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH).</a>3. Market review:Last week, stock price for healthcare sector in A share increased 6.31%, while CSI 300 increased 5.91% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:
An important document supporting the development of the traditional Chinese medicine industry has been released recently.
The market size of cardiac pacemakers in China is expected to reach RMB28 billion in the future.
China's health care products market is expected to maintain rapid growth in the future. 
2. Company news:News about the progress of new drugs and strategic collaboration from Innovent Biologics Inc (1801 HK), Sihuan Pharmaceutical Hldgs (460 HK) and Jiangsu Hengrui Medicine (600276 CH).3. Market review:Last week, stock price for healthcare sector in A share increased 6.31%, while CSI 300 increased 5.91% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Chine Healthcare Weekly(Feb12)-TCM New Policy,Cardiac Pacemaker,Health Care Product,Innovent,Hengrui

China

Yunnan Baiyao Group Co., Ltd. manufactures and markets traditional Chinese medicines.  The Company also operates in pharmaceutical wholesale and retail trading, empty capsules manufacturing, and hotel operation.

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Yunnan Baiyao Group Co., (000538 CH)

China Traditional Chinese Medicine (TCM) Industry - TCM Is Becoming Indispensable in the Portfolio

The current policy environment in China indicates that TCM is core asset of pharmaceuticals, not innovative drug R&D. It''s time to take TCM...

Xinyao (Criss) Wang

The Concerns and Outlook About the Recent Rally in Traditional Chinese Medicine (TCM) Sector

The insight mainly analyzed the logic behind the recent rally in TCM sector, the policy impact, the concerns on limited resources, VBP,...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.8)-Summary of Concerns on Pharma Companies, VBP on TCM, Q4 PD-1 Bidding

The article analyzed thoughts and concerns on domestic pharmaceutical companies, VBP on Chinese patent medicine and foreign companies' preparation...

Xinyao (Criss) Wang

China Healthcare Weekly (May.21)

The article analyzed the results and potential impact of the 7th demographic census,new policy on TCM market,insights on China chromatography...

Xinyao (Criss) Wang

Chine Healthcare Weekly(Feb12)-TCM New Policy,Cardiac Pacemaker,Health Care Product,Innovent,Hengrui

This article analyzed industry viewpoints include new policy about traditional Chinese medicine, cardiac pacemakers market, health care products...

Xinyao (Criss) Wang

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