China Healthcare:Achieving healthy growth in 1Q17
10.7% YoY growth in 1Q17, vs. FY16 growth of 12.0%
Growth of retail drug consumption rallied to 12.1% YoY in March, comparedwith 9.9% in 2m17. On a quarterly basis, growth in 1Q17 was 10.7%,compared with 10.7%, 11.1%, 11.6%, 15.1%, and 14.4% in 4Q16, 3Q16, 2Q16,1Q16 and 4Q15 respectively. We remind investors that drug consumption datahave high correlation with hospital drug sales.
We remain constructive on the sector
We remain constructive on the healthcare sector in 2017 on the back ofimproved regulatory environment, increased reimbursement coverage anddecreasing pricing pressure from drug tenders. We advise investors to focuson companies with new product launches and existing products with limitedpricing pressure such as CBPO (CBPO.OQ) and Hengrui (600276.SS).