China Healthcare:Monthly data tracker

Monthly data tracker: December 2017

    Recent data suggest that 1) drug consumption was up 11.0% YoY in Novembervs. 12.4% in YTD10m17; 2) inpatient and outpatient traffic increased 7.3% and3.0%, respectively, in YTD10m17; 3) government spending on healthcare dropped16% YoY in November 2017vs. 14% growth in YTD10m17; 4) vitamin C pricesremained high; 5) 6-APA and 7-ACA prices were flat in December; 6) TCM rawmaterial prices were mixed; and 7) corn prices remained the same at RMB1,690/ton in December vs. November.

    Government spending, drug consumption, patient traffic and insurance

    Government spending on healthcare declined 16% YoY to RMB99bn in November2017, while YTD10m17growth was 14% vs. 10% YoY in 2016. Meanwhile,drug consumption grew 11.0% YoY in November 2017; YTD10m17growth was12.4% vs. 12.0% YoY in 2016and vs. 14.2% YoY in 2015, respectively. Inpatienttraffic continued to outpace outpatient flow, with 7.3% vs. 3.0% YoY growth inYTD10m17. In November, inflow and outflow of urban basic medical insuranceincreased 27% and 41% YoY, respectively. For commercial insurance, the inflowof healthcare insurance shot up 36% YoY in November 2017, and growth ofhealthcare insurance outflow accelerated to 32% YoY. On a YTD basis, inflowgrew 5% and outflow climbed 29% YoY in YTD10m17.

    Vitamin C prices remained high; 6-APA and 7-ACA prices unchanged

    The ASP of domestic vitamin C edged up to RMB72.5/kg in December 2017,while exported vitamin C prices were stable at USD7.0/kg in November. Bothprices of 6-APA and 7-ACA were flat in December 2017, recording RMB230/kgand RMB450/kg respectively. We remind investors that the main manufacturersresumed production of 7-ACA in September 2015at a 16% price cut fromRMB630/kg in June 2015.

    TCM raw material prices mixed

    In December 2017, the TCM raw material price index turned from its previousuptrend and decreased 1.32% MoM to 1,266. The ASP of honeysuckle was flat,while the price of indigowoad root further dropped 4% MoM in December 2017.Honeysuckle and indigowoad are the main ingredients in Shineway’s flagshipproduct, Qing Kai Ling. The price of ophiopogon root remained unchangedin December, while ASP of radix ginseng fell 3% MoM. These are the mainingredients in Shen Mai.