高盛高华-中国医药行业2015年展望-091218.pdf.pdf

迅嘉机构内参-
December 18, 2009 China: Healthcare
December 18, 2009
China: Healthcare


2010 outlook: Drug lists and rural focus to drive l-t secular growth
Two major themes for 2010
We see a rising interest in the fast growing rural areas and expect China’s ON-SHORE HEALTHCARE STOCKS CURRENTLY TRADE
AT 17% PREMIUM TO CSI300 (TRAILING P/E), VS. 4-YR
healthcare industry to grow at an average rate of 23% in 2010E, with 35%-40% HISTORICAL AVERAGE OF 33%
growth in rural areas. We envision two major themes in tapping China’s rural 80 China-A DS Healthcare Index CSI 300 Index
healthcare markets. Theme 1: Change in product packaging (minimum 70
dosage) and shift to low-cost formulation (., from capsules to tablets) to fend 60
off pricing pressure. Theme 2: Focus on preventive care and diagnostic- 50
40
related products, as we see the Chinese government trying to shift its focus on (X) P/E
30
disease prevention (., ines). Moreover, we envision an accelerated growth
20
in diagnostic-related products fueled by hospital’s incentive to lift prescriptions
10
for medical testing to offset the losses from zero drug price mark-ups. 0
Mar-05 Aug-05 Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09

Drug reimbursement list, a key differentiator Source: DataStream, Bloomberg, Gao Hua Securities
Research.
In order to provide basic medical care and control rising medical costs, China’s
gov’t has launched two drug lists, the EDL, launched in August 2009, and a ON-SHORE HEALTHCARE STOCKS HAVE
UNDERPERFORMED YTD
revised 2009 version of the RDL, launched in November. We think that these
two drug lists will e a key differentiator for drug makers in the near to 150% 141%
medium term, with volume expansion outpacing margin pressure long-term. 113%
98%
100% 93% 91%
78% 77%
67%
Strong, sustainable secular growth not fully priced in 47%
50% 43%
The Chinese pharma sector has underperformed ytd. We believe t