CHINA (OBSERVATORY) – China, the world’s manufacturing center, is moving towards an economy with higher added value, and there is one large industry in which a country can dominate both as a producer and a consumer: health, CNBC writes.
This is due to the fact that China has become the second largest economy in the world for decades with the strict policies of one child, contributing to the emergence of a rapidly aging society and the growing need to improve the scope of medical services.
According to the health information company IQVIA, China was the world’s second largest national pharmaceutical market in 2017, its volume is estimated at $ 122.6 billion. The country has also become the largest emerging pharmaceutical market, which by 2020 will reach $ 175 billion.
” The development of the healthcare industry in China is still in its infancy, as evidenced by low health expenditure as a percentage of GDP … and a smaller proportion of the population aged 60 and older, “DBS analysts Mark Kong and Chris Gao said. it requires a lot of space for growth because, as the population is aging, the demand for drugs will increase.”
According to experts, there is still room for growth, although the average annual growth rate of the Chinese pharmaceutical market from 2013 to 2017. was 9.4%.
For comparison, the world’s largest medical services market in the US in 2017 was estimated at $ 466.6 billion, while Japan spent $ 84.8 billion on medicine in the same year.
Bank Credit Suisse has selected shares of several pharmaceutical companies in China, which will be suitable for speculation in 2018.
The company, registered in Hong Kong, has two leading medicines: anlotinib for the treatment of lung cancer and tenofovir for hepatitis B – and several generics that must be approved before 2021.
The top choice of Credit Suisse, Sino Biopharm, is already the leader in the Chinese market medicines from hepatitis with a 22% market share in 2016. The company also has a full portfolio of drugs for hepatitis.
According to Credit Suisse, the company has more than 10 thousand sales representatives in China, and half of them are engaged in drugs for hepatitis.
In 2016, the anti-oncology company had a share of 11% of the company’s total sales. The index will increase to 19% by 2020, after annotinib will be launched in the first quarter of 2018, noted in Credit Suisse. This product is likely to be competitive compared to comparable drugs from transnational corporations, the bank added.
Jiangsu Hengrui Medicine
“Jiangsu Hengrui” is the largest company in China, whose shares are quoted on the exchange. And with the consolidation of the industry due to changes that have occurred under the leadership of the government, this will be the best opportunity to follow the trends, said Credit Suisse.
This is due, according to the bank, with an effective portfolio of drugs from Jiangsu Hengrui, a powerful drug delivery potential, its leading position in cancer treatment and a well-established sales team.
In 2018, the pharmaceutical company intends to launch three main drugs, two of which are drugs for the treatment of oncology. The latter is a common product for respiratory diseases.
The Swiss bank said that the Hong Kong CSPC is ready for short-term profitability and the strongest organic growth among large pharmaceutical names.
Including an injection used for stroke and cancer treatment as part of China’s health care reimbursement system will help stimulate growth, Credit Suisse added.