20180105-招商证券_香港_-China_Healthcare_35页_4mb

报告摘要

China Healthcare Sector Summary - January 5, 2018

Core Content

The China Healthcare sector showed in-line performance with the broader market in 2017, driven by increased healthcare spending. However, there was a significant divergence between pharmaceutical companies and distributors/hospitals. Pharma companies saw strong growth due to faster drug reviews and expanded reimbursement coverage, while distributors and hospitals underperformed due to the impact of healthcare reimbursement reforms.

Main Points

Sector Performance:
- The MSCI China Healthcare index returned 38% in 2017, slightly trailing the broader market.
- Pharma companies outperformed with an average return of 102%, while distributors and hospitals only saw a 15% return.
- The divergence was the largest since 2012.
Pharma Drivers:
- Faster drug approval processes and expanded reimbursement coverage.
- Initiatives by the CFDA, such as accepting overseas clinical data and fast-track reviews.
- Several key drug approvals and filings in 2017, including PD-1, biosimilars, and generic versions of major drugs.
Distributors and Hospitals:
- Continued to bear the brunt of the reimbursement reform.
- Their relative PERs were significantly below historic averages, indicating potential upside.
Key Risks and Catalysts:
- Risks include slowing healthcare spending, lack of reimbursement benefits, lack of R&D validation, and competition from multinational corporations.
- Catalysts include updates on immunotherapy and biosimilar pipelines, new drug approvals, and the commercialisation of innovative drugs.

Investment Recommendations

Alpha Ideas:
- CSPC (1093 HK): Expected to benefit from improved competitive landscape and product launch momentum.
- SSY (2005 HK): Also shows strong potential with similar factors.
Beta Ideas:
- CR Pharma (3320 HK): A reasonably diversified and vertically integrated group, providing a buffer against potential volatility in alpha names.

Financial Highlights

Company	Ticker	Rating	Current Price (HK$)	Target Price (HK$)	Upside	FY17E EPS	FY18E EPS	FY17E P/E	FY18E P/E	FY17E P/B	FY18E P/B	FY17E ROE	FY18E ROE
CSPC	1093 HK	BUY	16.40	17.83	9%	0.45	0.57	36.5	28.7	7.1	19%	21%	21%
SSY Group	2005 HK	BUY	4.96	5.72	15%	0.23	0.27	21.5	18.2	3.5	22%	22%	22%
CR Pharma	3320 HK	BUY	10.12	12	19%	0.53	0.63	18.9	16.0	1.6	9%	10%	10%
Sino Biopharm	1177 HK	BUY	13.80	14.40	5%	0.31	0.36	44.4	38.7	9.5	21%	20%	20%
3S Bio	1530 HK	BUY	16.22	18.00	11%	0.40	0.53	40.8	30.7	5.1	11%	13%	13%

Key R&D Races

NCE (New Chemical Entity):
- Several companies are expected to file and receive approvals for new drugs in 2018.
- Notable drugs include PD-1, biosimilars, and small molecules targeting C-MET, BTK, PARP, etc.
FTM Generic:
- Focus is on generic versions of blockbuster drugs such as Plavix, Baraclude, Lipitor, and Crestor.
- Companies like Salubris, CSPC, SBP, and others are leading the race.
BE (Bioequivalence):
- The race for generic BE approvals is intense, with companies like Salubris, CSPC, and SBP leading the way.

Conclusion

The report highlights the structural shift towards innovation in the China Healthcare sector, emphasizing the importance of a balanced investment approach. It underscores the potential for growth in innovative pharma companies and the undervaluation of distributors and hospitals, suggesting that the market may still offer opportunities in the latter. The report also identifies key risks and catalysts that could impact the sector in 2018, urging investors to monitor these closely.

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