China China Healthcarepg.jrj.com.cn/acc/Res/CN_RES/INDUS/2017/4/18/38809fe6-a171-4f61-a… · China...

Deutsche Bank Markets Research

Asia

China

Health Care

Health Care

Industry

China Healthcare

Date

18 April 2017

Industry Update

Monthly hospital Rx tracker, February 2017

Distinctive growth profiles in 2M17

________________________________________________________________________________________________________________

Deutsche Bank AG/Hong Kong

Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 057/04/2016.

Jack Hu, Ph.D

Research Analyst

(+852 ) 2203 6208

[email protected]

Linc Yiu

Research Associate

(+852 ) 2203 6248

[email protected]

Top picks

Universal Medical (2666.HK),HKD6.99 Buy

Hengrui Medicine (600276.SS),CNY54.18 Buy

China Biologic Products (CBPO.OQ),USD109.96

Buy

Source: Deutsche Bank

Related recent research Date

Biological drugs and mAbs in China

Jack Hu

7 Feb 2017

Source: Deutsche Bank

Hospital Rx data indicate 2.8% YoY growth in 2M17, compared with 1.7% YoY growth in the same period last year and 7.3% for 2016. We attribute this to faster-than-expected growth deceleration of China-specific drugs, which we define as chemicals that are only sold in China but not ex-China. Notably, all top 10 China-specific drugs except NBP saw a growth decline during this period. In contrast, all top three oncology drugs from Roche, Rituxan, Herceptin and Avastin saw growth acceleration in 2M17 vs. 2016, due to more PRDL inclusions. We expect this trend to continue.

Implications for high frequency data: upside for NRDL/PRDL inclusion The divergence of growth of different drugs is primarily driven by competition and reimbursement. As we detailed in our FITT report Biological drugs and mAbs in China, all three aforementioned oncology drugs enjoyed benefits from PRDL inclusion. With 32%, 35% and 33% YoY growth in 2M17, vs. 21%, 24% and 22% YoY growth in 2016 for Rituxan, Herceptin and Avastin respectively, the trend continues. As such, we continue to believe that the street expectation for growth acceleration of drugs newly added to the NRDL might be conservative. For example, we believe the street expected 27% growth for Yisaipu in 2018. We anticipate growth might achieve the high end of the range, or even exceed.

Hengrui: Kai Te Li continues solid growth in 2M17 Flagship products Ai Li, Ai Su, Ai Heng, the atracurium series and Kai Te Li grew 12%/-2%/-2%/4%/35% in 2M17 vs. 13%4%/0%/5%/25% in 2016. On a 3-month rolling basis, average growth for Ai Li and Ai Su was 11%/-3% in 2M17 vs. 15%/6% in 12M16.

SBP: Runzhong decelerates, Kaifen growth momentum intact Four major products – Runzhong, Ganmei, Kaishi and Kaifen – registered growth of 11%/-4%/-8%/30% in 2M17, vs. 26%/1%/-1%/31% in 2016. On a 3-month rolling basis, average growth of Runzhong and Ganmei was 9%/-5% in 2M17 vs. 34%/5% in 12M16.

3SBio: growth moderation for EPIAO and TPIAO, SEPO solid Growth for EPIAO and TPIAO came in at -4%/6% in 2M17, compared with 5%/33% during 2016. Yisaipu is yet to enjoy the benefits from its new NRDL inclusion, growing at -5% in 2M17, vs. 2% in 2016. SEPO delivered growth of 52% YoY in 2M17.

CSPC: oncology franchise continues robust growth Flagship products NBP, Xuanning and Oulaining grew 19%/-3%/-16% in 2M17, vs. 33%/6%/4% in 2016. Oncology drugs Duomeisu and Jinyouli continued robust growth at 45%/83% in 2M17, compared with 120%/180% during 2016. On a 3-month rolling basis, average growth of NBP and Oulaining was 21% /-10% in 2M17 vs. 36%/8% in 12M16.

CBPO: albumin accelerates while IVIG lags Albumin/IVIG delivered growth of 21%/-7% in 2M17 vs. 14%/3% in 2016. On a 3-month rolling basis, average growth for albumin/IVIG was 19%/-6% in 2M17 vs. 13%/7% in 12M16.

Distributed on: 18/04/2017 10:27:52 GMT

0bed7b6cf11c

18 April 2017

Health Care

China Healthcare


Flagship drug data

In 2M17, total hospital sales grew by 2.8% YoY, vs. 1.7% YoY growth in 2M16

and 7.3% in FY16. On a quarterly basis, total drug sales registered growth of

6.2%/5.1%/6.7%/11.5% during 4Q/3Q/2Q/1Q16 respectively.

We summarize the growth details of the flagship products of 13 drug

companies in the following tables. We caution investors that monthly sales

data are subject to seasonality, and first quarter data are likely impacted by the

CNY effect.

Hengrui (600276.SS)

Oncology drugs Ai Su (Docetaxel)/Ai Li (Irinotecan)/Ai Heng grew by

-2%/12%/-2% in 2M17, vs. 4%/13%/0% in 2016.

Anaesthetic drugs Kai Te Li (Sevoflurane) and Ioversol continued to

deliver strong growth of 35% and 27% in 2M17, representing growth

acceleration from 25%/18% growth in 2016.

Figure 1: Growth summary for Hengrui (Jan 2015 – Feb 2017)

Drug name Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

Ai Su -14% 28% 2% 6% -2% 3% -38% 2% -1% -6% 8% 6%

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

9% -11% 13% -13% 13% 5% 54% 8% -2% 12% -2% -10%

Jan-17 Feb-17

6% -13%

Quarterly 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16

2% 3% -12% 3% 4% 1% 14% -1%

Kai Te Li Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

15% 65% 11% 17% 13% 28% 16% 20% 10% 7% 1% 29%


21% -21% 37% 2% 31% 3% 37% 41% 10% 48% 70% 18%

Jan-17 Feb-17

20% 66%


24% 19% 15% 13% 15% 11% 29% 43%

Atracurium series Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-3% 56% -5% 12% 6% 14% 14% 18% 12% -1% 22% 2%


20% -15% 41% -7% 13% -1% 0% 8% -2% 14% 6% -6%

Jan-17 Feb-17

5% 1%


10% 11% 14% 8% 16% 1% 2% 3%

Source: Deutsche Bank, Chinese Pharmaceutical Association

18 April 2017

Health Care

China Healthcare


Figure 2: Growth summary for Hengrui (Jan 2015 – Feb 2017) – continued


Ioversol 11% 62% 22% 33% 15% 26% 21% 18% 21% 27% 18% 26%


22% -6% 36% 12% 24% 13% 13% 27% 9% 15% 35% 17%

Jan-17 Feb-17

14% 48%


26% 25% 20% 24% 20% 16% 16% 23%

Le Jia Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

8% 53% 10% 15% 8% 14% 14% 15% 6% 3% 15% 5%


15% -6% 36% 7% 20% 9% -1% 13% 4% 9% 9% -4%

Jan-17 Feb-17

-2% -1%


19% 12% 11% 7% 16% 12% 5% 4%

Ai Li Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-14% 42% -1% 1% -5% 17% -5% 18% 7% 24% 21% 22%


18% -2% 31% 14% 32% 11% 13% 21% 1% 9% 19% 1%

Jan-17 Feb-17

21% 0%


3% 4% 6% 22% 16% 18% 11% 9%

Ai Heng Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-22% 26% -1% -4% -6% 3% 0% 0% -5% 0% 15% 5%


6% -14% 7% -9% 5% 1% 1% 14% 1% -1% -4% -8%

Jan-17 Feb-17

3% -10%


-4% -2% -2% 7% 0% -1% 5% -5%


18 April 2017

Health Care

China Healthcare


Figure 3: 3-month rolling average for Ai Su Figure 4: 3-month rolling average for Ai Li

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

10

20

30

40

50

60

70

Ai Su YoY growthRMBm

-5%

0%

5%

10%

15%

20%

25%

30%

0

5

10

15

20

25

30

35

Ai Li YoY growthRMBm



Figure 5: 3-month rolling average for Ai Heng Figure 6: 3-month rolling average for Atracurium series

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

20

21

22

23

24

25

26

27

28

Ai Heng YoY growthRMBm

-5%

0%

5%

10%

15%

20%

25%

0

10

20

30

40

50

60

Atracurium series YoY growthRMBm



Figure 7: 3-month rolling average for Ioversol Figure 8: 3-month rolling average for Kai Te Li

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

10

20

30

40

50

60

Ioversol YoY growthRMBm

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

5

10

15

20

25

30

35

40

45

50

Kai Te Li YoY growthRMBm



18 April 2017

Health Care

China Healthcare


Sino Biopharm (1177.HK)

Kaifen (Flurbiprofen) and Runzhong (Entecavir) registered decent

growth of 30%/11% YoY in 2M17, vs. 31%/26% in 2016.

Other drugs experienced deceleration, e.g. Tianqingganmei/ Kaishi

registered declines of -4%/-8% YoY growth in 2M17, vs. 1%/-1% in

2016.

Figure 9: Growth summary for Sino Biopharm (Jan 2015 – Feb 2017)


Kaifen 2% 77% 35% 49% 46% 72% 55% 69% 53% 46% 63% 58%


58% 18% 60% 26% 33% 32% 17% 31% 28% 28% 36% 18%

Jan-17 Feb-17

31% 29%


Rx data 30% 55% 59% 56% 48% 30% 25% 27%

Reported data 24% 24% 24% 23% 10% 15% 28% 15%

Tianqingganmei Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

1% 65% 17% 36% 29% 42% 31% 35% 34% 25% 34% 33%


35% 2% 21% -8% 4% -6% -8% 1% -5% -2% 3% -12%

Jan-17 Feb-17

0% -11%


Rx data 20% 36% 33% 31% 20% -4% -4% -4%

Reported data 18% 23% 27% -1% 4% -10% -10% 4%

Runzhong Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

20% 112% 58% 85% 64% 80% 77% 82% 76% 54% 74% 68%


87% 26% 55% 18% 34% 25% 16% 24% 15% 26% 20% 0%

Jan-17 Feb-17

10% 12%


Rx data 53% 77% 78% 66% 57% 25% 18% 14%

Reported data 45% 39% 37% 13% 17% 7% 14% 15%

Kaishi Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-10% 53% -5% 11% 4% 13% 2% 12% 9% 2% 11% 9%


6% -15% 23% -7% 7% 5% -7% 0% -8% -9% 4% -7%

Jan-17 Feb-17

-5% -12%


Rx data 5% 10% 8% 8% 5% 1% -5% -4%

Reported data -2% -4% -5% -7% -10% 1% -12% -17% Source: Deutsche Bank, Chinese Pharmaceutical Association

18 April 2017

Health Care

China Healthcare


Figure 10: Growth summary for Sino Biopharm (Jan 2015 – Feb 2017) – continued


Tiance 24% 78% 40% 51% 71% 69% 71% 72% 66% 48% 56% 34%


48% 28% 41% 3% 5% -5% -20% -1% -12% -15% -6% -2%

Jan-17 Feb-17

-6% -17%


Rx data 42% 63% 69% 45% 40% 0% -11% -7%

Reported data 35% 47% 52% 15% 10% -5% -13% 4%

New Ossified Triol capsules

Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-26% 21% -9% -3% -6% 16% 10% 17% 15% 10% 24% 38%


57% 17% 58% 22% 28% 14% 3% 20% 14% 15% 16% 9%

Jan-17 Feb-17

10% 8%


Rx data -9% 2% 14% 24% 45% 21% 13% 13%

Reported data 7% 4% 9% 9% 12% 16% 15% 9%

Mingzheng Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-21% 48% -4% 15% -4% 15% -8% -8% -3% -13% -14% -9%


4% -41% -3% -35% -14% -28% -32% -21% -21% -20% -18% -34%

Jan-17 Feb-17

-21% -29%


Rx data -1% 8% -6% -12% -12% -27% -25% -24%

Reported data 4% -14% -15% -29% -26% -24% -20% -16% Source: Deutsche Bank, Chinese Pharmaceutical Association

18 April 2017

Health Care

China Healthcare


Figure 11: 3-month rolling average for Runzhong Figure 12: 3-month rolling average for Ganmei

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

20

40

60

80

100

120

Runzhong YoY growthRMBm

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

20

40

60

80

100

120

Tianqingganmei YoY growth



Figure 13: 3-month rolling average for Kaishi Figure 14: 3-month rolling average for Kaifen

-10%

-5%

0%

5%

10%

15%

20%

0

10

20

30

40

50

60

70

80

90

Kaishi YoY growthRMBm

0%

10%

20%

30%

40%

50%

60%

70%

0

20

40

60

80

100

120

Kaifen YoY growthRMBm



Figure 15: 3-month rolling average for New Ossified Triol

capsules

Figure 16: 3-month rolling average for Tiance

-20%

-10%

0%

10%

20%

30%

40%

50%

0

5

10

15

20

25

30

35

New Ossified Triol capsules YoY growthRMBm

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

5

10

15

20

25

30

35

40

Tiance YoY growthRMBm



18 April 2017

Health Care

China Healthcare


3SBio (1530.HK)

Sales of EPIAO/TPIAO increased by -4%/6% in 2M17, vs. 5%/33% in

2016.

CP Guojian’s Yisaipu sales were down 5% YoY in 2M17, vs. 2%

growth in FY16.

Figure 17: Growth summary for 3SBio (Jan 2015 – Feb 2017)


EPIAO -12% 57% -4% 21% -8% 9% 3% 5% 5% -7% 13% 5%


17% -19% 26% -13% 13% 7% 4% 9% 3% 9% 8% 0%

Jan-17 Feb-17

-1% -9%


7% 7% 4% 4% 7% 1% 5% 5%

Semi-annual 1H15 2H15 1H16 2H16

Rx data 7% 4% 4% 5%

Reported data 23% 7% -6% 4%

TPIAO Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

0% 82% 9% 23% 14% 28% 18% 33% 13% 10% 36% 35%


37% -1% 92% 28% 45% 28% 27% 46% 38% 17% 28% 24%

Jan-17 Feb-17

10% 2%


22% 22% 20% 27% 39% 33% 37% 23%


Rx data 22% 24% 36% 30%

Reported data 38% 35% 37% 16%

Yisaipu Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-8% 46% -7% 9% 1% 11% 15% -3% -2% -1% 19% 17%


3% -17% 31% -10% 13% 1% -10% 16% -5% 10% 8% -11%

Jan-17 Feb-17

-6% -2%


4% 7% 3% 12% 6% 1% 0% 1%


18 April 2017

Health Care

China Healthcare


Figure 18: 3-month rolling average for EPIAO Figure 19: 3-month rolling average for TPIAO

-10%

-5%

0%

5%

10%

15%

20%

25%

0

5

10

15

20

25

30

35

40

EPIAO YoY growthRMBm

0%

10%

20%

30%

40%

50%

60%

0

5

10

15

20

25

30

35

40

45

50

TPIAO YoY growthRMBm



18 April 2017

Health Care

China Healthcare


CSPC (1093.HK)

Flagship product NBP delivered solid growth of 19% in 2M17, vs. 33%

in 2016.

Oulaining/Xuanning’s growth fluctuated to -16%/-3% in 2M17, vs.

4%/6% in 2016.

New drugs Duomeisu/Jinyouli continued their robust growth trend at

45%/83% in 2M17, vs. 120%/180% in FY16.

Figure 20: Growth summary for CSPC (Jan 2015 – Feb 2017)


NBP 8% 85% 32% 46% 33% 48% 47% 43% 37% 30% 49% 45%


62% 27% 58% 27% 42% 31% 20% 39% 37% 25% 29% 19%

Jan-17 Feb-17

23% 14%


Rx data 35% 43% 42% 41% 49% 33% 32% 24%

Reported data 43% 35% 34% 31% 36% 43% 43% 32%

Oulaining Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

7% 117% 31% 39% 45% 48% 40% 34% 36% 20% 21% 28%


42% -1% 30% 5% 2% -3% -10% 5% -3% 4% 2% -10%

Jan-17 Feb-17

-10% -24%


Rx data 38% 44% 36% 23% 24% 1% -3% -2%

Reported data 22% 21% 24% 26% 16% 10% 8% 8%

Xuanning Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-10% 57% 14% 20% 15% 23% 29% 27% 32% 8% 29% 32%


28% -5% 34% -4% 11% 10% -3% 9% 0% -3% 7% -6%

Jan-17 Feb-17

5% -13%


Rx data 14% 19% 29% 23% 19% 5% 2% -1%

Reported data 31% 33% 16% 10% 16% 14% 9% 16%

Duomeisu Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

89% 431% 88% 160% 102% 364% 133% 265% 180% 119% 362% 282%


241% 209% 288% 173% 234% 81% 66% 129% 132% 69% 62% 57%

Jan-17 Feb-17

95% -5%


Rx data 141% 196% 183% 242% 247% 148% 110% 62%

Reported data 72% 126% 109% 109% 27% 22% 24% 21% Source: Deutsche Bank, Chinese Pharmaceutical Association

18 April 2017

Health Care

China Healthcare


Figure 21: Growth summary for CSPC (Jan 2015 – Feb 2017) – continued


Jinyouli 185% 247% 181% 114% 201% 217% 194% 233% 159% 109% 212% 203%


326% 214% 250% 290% 216% 163% 145% 119% 126% 207% 152% 190%

Jan-17 Feb-17

112% 47%


Rx data 200% 180% 190% 175% 261% 211% 129% 181%

Reported data 168% 75% 97% 180% 68% 78% 67% 63%

Biapenem Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-45% 34% 109% -34% -7% -66% -30% 119% 9% 28% 44% 78%


104% 44% 72% 47% -19% 284% 59% -6% -42% 1% 15% 5%

Jan-17 Feb-17

9% -5%


-2% -37% 25% 50% 73% 60% -5% 7%


Figure 22: 3-month rolling average for NBP Figure 23: 3-month rolling average for Oulaining

0%

10%

20%

30%

40%

50%

60%

0

20

40

60

80

100

120

NBP YoY growthRMBm

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0

10

20

30

40

50

60

70

80

90

100

Oulaining YoY growthRMBm



Figure 24: 3-month rolling average for Xuanning Figure 25: 3-month rolling average for Duomeisu

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

2

4

6

8

10

12

14

Xuanning YoY growthRMBm

0%

50%

100%

150%

200%

250%

300%

350%

0

2

4

6

8

10

12

14

16

18

Duomeisu YoY growthRMBm



18 April 2017

Health Care

China Healthcare


Fosun Pharma (2196.HK)

Aodejin/Atomolan’s growth rates were stable at -10%/13% in 2M17,

vs. -13%/9% YoY in 2016.

Newly-launched drug Youdier accelerated to 83% YoY in 2M17, vs.

79% in 2016.

Figure 26: Growth summary for Fosun (Jan 2015 – Feb 2017)


Aodejin -23% 46% -1% 7% 3% 7% 0% 8% -3% -10% 4% 5%


13% -32% -9% -18% -13% -18% -13% -10% -15% -10% -13% -14%

Jan-17 Feb-17

-6% -16%


-1% 6% 1% 0% -9% -17% -13% -12%

Atomolan Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-11% 86% 10% 22% 15% 35% 26% 22% 26% 13% 22% 21%


31% -15% 37% -8% 14% 6% -4% 17% 7% 10% 16% 7%

Jan-17 Feb-17

11% 15%


16% 24% 25% 19% 18% 4% 6% 11%

Youdier Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

47% 104% 29% 68% 52% 92% 66% 94% 79% 31% 99% 59%


89% 25% 177% 83% 121% 79% 77% 75% 59% 78% 55% 59%

Jan-17 Feb-17

87% 76%


52% 70% 79% 63% 101% 93% 69% 62%

Bangting Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-17% 65% 8% 23% 15% 36% 21% 25% 17% 14% 17% 19%


42% -22% 36% -3% 5% -8% -6% 2% -9% -3% 3% -5%

Jan-17 Feb-17

-12% -6%


8% 24% 21% 17% 20% -2% -5% -2%

Shaduolika Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-35% 31% 13% 4% -19% 18% 6% 20% 15% -19% 9% -1%


24% -6% 71% 0% -4% -38% -28% -20% -27% 8% 3% 3%

Jan-17 Feb-17

-10% -51%


-9% 1% 13% -3% 27% -16% -25% 4% Source: Deutsche Bank, Chinese Pharmaceutical Association

18 April 2017

Health Care

China Healthcare


Figure 27: 3-month rolling average for Aodejin Figure 28: 3-month rolling average for Bangting

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

0

20

40

60

80

100

120

140

Aodejin YoY growthRMBm

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0

5

10

15

20

25

30

Bangting YoY growthRMBm



Figure 29: 3-month rolling average for Atomolan Figure 30: 3-month rolling average for Youdier

0%

5%

10%

15%

20%

25%

30%

35%

0

10

20

30

40

50

60

Atomolan YoY growthRMBm

0%

20%

40%

60%

80%

100%

120%

140%

0

5

10

15

20

25

30

35

40

45

Youdier YoY growthRMBm



18 April 2017

Health Care

China Healthcare


China Biologic Products (CBPO.OQ)

Albumin and IVIG grew by 21%/-7% in 2M17, vs. 14%/3% in 2016.

Figure 31: Growth summary for CBPO (Jan 2015 – Feb 2017)


Albumin -12% 22% -1% 4% 23% 3% 30% 16% 20% 45% 32% -2%


39% -13% -4% 29% -6% 33% 7% 20% 10% 13% 18% 24%

Jan-17 Feb-17

9% 44%


Rx data 0% 10% 21% 21% 9% 17% 12% 18%

Reported data 14% 37% 18% 8% 28% 43% 12% 30%

IVIG Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

43% 101% 64% 11% 48% 47% 29% 40% 4% 10% 41% 39%


7% 15% 0% 19% -1% -2% -11% 10% 7% 6% 6% -14%

Jan-17 Feb-17

6% -22%


Rx data 64% 35% 22% 30% 7% 5% 2% -2%

Reported data 62% 29% 16% 17% 10% -4% -6% 2%


Figure 32: 3-month rolling average for Albumin Figure 33: 3-month rolling average for IVIG

0%

5%

10%

15%

20%

25%

30%

35%

0

5

10

15

20

25

30

35

Albumin YoY growthRMBm

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

0

5

10

15

20

25

30

35

40

IVIG YoY growthRMBm



18 April 2017

Health Care

China Healthcare


Hualan Biological (002007.SZ)

Albumin sales declined by 42% in 2M17, vs. a 20% decline in 2016.

IVIG enjoyed growth acceleration with 51% YoY in 2M17, vs. 28% in

FY16.

Figure 34: Growth summary for Hualan (Jan 2015 – Feb 2017)


Albumin 9% 173% 8% 144% 35% 133% 86% 193% 84% 17% 47% 119%


17% 52% 6% -10% 47% -26% -15% -41% -92% -50% -26% -32%

Jan-17 Feb-17

-20% -59%


34% 103% 123% 57% 24% -4% -50% -35%

IVIG Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-34% 35% -40% -24% -31% -21% -38% -18% -8% -35% -32% -44%


-16% -31% 42% -11% 51% -4% 34% 67% 30% 85% 68% 85%

Jan-17 Feb-17

80% 17%


-21% -25% -23% -37% -7% 11% 42% 79% Source: Deutsche Bank, Chinese Pharmaceutical Association

Figure 35: 3-month rolling average for Albumin Figure 36: 3-month rolling average for IVIG

-100%

-50%

0%

50%

100%

150%

200%

0

2

4

6

8

10

12

14

16

Albumin YoY growthRMBm

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

0

5

10

15

20

25

30

IVIG YoY growthRMBm



18 April 2017

Health Care

China Healthcare


Tonghua Dongbao (600867.SS)

The Gansulin series grew by 12% in 2M17, vs. 13% YoY growth in

2016.

Figure 37: Growth summary for Tonghua Dongbao (Jan 2015 – Feb 2017)


Gansulin 30R -1% 59% 8% 15% 0% 16% 0% 12% 3% -4% 11% -1%


14% -25% 12% -4% 12% -2% 4% 12% 0% 10% 5% 14%

Jan-17 Feb-17

15% 4%


16% 10% 5% 1% 1% 2% 5% 10%

Gansulin series Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-1% 60% 10% 16% 9% 25% 12% 25% 17% 11% 20% 10%


32% -12% 31% 12% 23% 10% 11% 23% 3% 5% 17% 3%

Jan-17 Feb-17

14% 9%


16% 16% 18% 13% 18% 15% 12% 8% Source: Deutsche Bank, Chinese Pharmaceutical Association

Figure 38: 3-month rolling average for Gansulin series Figure 39: 3-month rolling average for Gansulin 30R

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0

1

2

3

4

5

6

7

8

Gansulin series YoY growthRMBm

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

1

2

3

4

5

6

7

Gansulin 30R YoY growthRMBm



18 April 2017

Health Care

China Healthcare


Sihuan (0460.HK)

Yuanzhijiu/GM1/Yinbixin grew by -22%/8%/-3% in 2M17, vs.

14%/16%/10% in 2016. Sales of Oudimei and Kelinao recorded a

decline of 13%/5% in 2M17.

Figure 40: Growth summary for Sihuan (Jan 2015 – Feb 2017)


Oudimei -4% 86% 22% 29% 26% 33% 22% 32% 10% 11% 16% 22%


31% -11% 42% -1% 6% 8% -3% 4% 3% 16% -4% -10%

Jan-17 Feb-17

-8% -20%


23% 29% 20% 17% 22% 4% 1% -1%


Rx data 27% 19% 12% 0%

Reported data 49% -10% -29% 79%

Yuanzhijiu Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

27% 256% 92% 93% 127% 125% 102% 87% 74% 58% 75% 58%


92% 9% 45% 16% 13% 8% 10% 23% 8% 15% -14% -18%

Jan-17 Feb-17

-18% -30%


89% 114% 86% 64% 49% 12% 13% -8%


Rx data 103% 74% 27% 3%


Kelinao Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-9% 61% 47% 63% 65% 93% 98% 66% 75% 67% 79% 67%


89% 29% 36% -4% 6% -6% -12% 6% -4% 4% 5% 1%

Jan-17 Feb-17

-1% -11%


25% 73% 79% 71% 51% -2% -4% 3%


Rx data 51% 75% 18% -1%

Reported data 27% -31% -41% 15%

Yinbixin (Guhong) Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

23% 146% 48% 61% 36% 58% 33% 54% 56% 56% 44% 35%


36% -13% 33% 3% 12% 11% 5% 19% 11% -5% 1% 7%

Jan-17 Feb-17

-7% 3%


55% 51% 47% 44% 20% 8% 11% 1%


Rx data 53% 46% 14% 6%

Reported data 129% -56% -27% 5%


18 April 2017

Health Care

China Healthcare


Figure 41: Growth summary for Sihuan (Jan 2015 – Feb 2017) – continued


GM 1 (Aogan + Xiangtong)

-52% 22% -27% 0% -8% -17% 22% 44% 70% 111% 45% 107%


70% -16% 63% 17% 22% 49% -4% 24% 2% -3% 19% -14%

Jan-17 Feb-17

4% 17%


-31% -9% 43% 84% 40% 29% 6% -1%


Rx data -20% 62% 34% 2%

Reported data 15% 38% -22% 34%

Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

Yimaining -7% 61% 5% 23% 13% 42% 22% 24% 27% 15% 27% 23%


34% -10% 32% -5% 0% -6% -11% -10% -3% -15% -5% -12%

Jan-17 Feb-17

-17% -12%


12% 25% 24% 22% 20% -4% -8% -11%


Rx data 19% 23% 7% -9%

Reported data 19% -15% -6% 12% Source: Deutsche Bank, Chinese Pharmaceutical Association

18 April 2017

Health Care

China Healthcare


Figure 42: 3-month rolling average for Oudimei Figure 43: 3-month rolling average for Kelinao

-20%

-10%

0%

10%

20%

30%

40%

50%

0

20

40

60

80

100

120

140

Oudimei YoY growthRMBm

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

10

20

30

40

50

60

70

80

90

Kelinao YoY growthRMBm



Figure 44: 3-month rolling average for Yuanzhijiu Figure 45: 3-month rolling average for Yimaining

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

0

10

20

30

40

50

60

70

80

90

100

Yuanzhijiu YoY growthRMBm

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

0

5

10

15

20

25

30

35

40

Yimaining YoY growthRMBm



18 April 2017

Health Care

China Healthcare


China Medical System (0867.HK)

Xinhuosu, Ursofalk and Salofalk delivered solid growth of

16%/16%/21% in 2M17, vs. 26%/14%/25% in 2016. Growth for

Deanxit dropped to -26% YoY in 2M17, vs. a 10% decline in 2016.

Figure 46: Growth summary for CMS (Jan 2015 – Feb 2017)


Xinhuosu -10% 44% 40% 60% 32% 29% 42% 56% 55% 43% 40% 32%


90% 37% 45% 3% 35% 23% 27% 27% -2% 37% 24% 7%

Jan-17 Feb-17

24% 3%


19% 40% 52% 37% 57% 19% 15% 20%


Rx data 30% 44% 36% 17%


Ursofalk Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

5% 81% 30% 25% 25% 22% 27% 24% 18% 15% 28% 21%


30% -6% 21% 2% 14% 6% 9% 29% 11% 17% 29% 13%

Jan-17 Feb-17

17% 15%


31% 24% 23% 21% 16% 7% 15% 19%


Rx data 22% 22% 11% 17%


Salofalk Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-6% 76% 29% 39% 24% 25% 24% 22% 15% 24% 20% 14%


33% 14% 22% 9% 20% 33% 15% 49% 26% 18% 31% 30%

Jan-17 Feb-17

35% 2%


23% 29% 20% 19% 23% 21% 29% 27%


Rx data 26% 19% 22% 28%


Deanxit Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-7% 73% 17% 26% 20% 29% 35% 32% 26% 19% 33% 20%


39% -4% 17% -11% -5% -13% -21% -16% -24% -23% -22% -21%

Jan-17 Feb-17

-19% -36%


18% 25% 31% 24% 18% -10% -20% -22%


Rx data 22% 27% 3% -21%

Reported data 17% 6% 4% -1%


18 April 2017

Health Care

China Healthcare


Figure 47: Growth summary for CMS (Jan 2015 – Feb 2017) – continued


Plendil -21% 19% -4% -6% -2% -3% -10% 5% -13% -25% 12% -3%


0% -26% 6% -13% -6% -6% -11% -6% 1% 11% -9% -7%

Jan-17 Feb-17

8% 7%


-5% -4% -7% -5% -7% -9% -5% -3%

Imdur Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-28% 26% -22% -18% -16% -14% -11% -10% -7% -21% -4% -7%


11% -16% 13% -31% -23% -12% -19% -10% -14% -10% -12% -1%

Jan-17 Feb-17

-15% -31%


-14% -16% -9% -10% 2% -22% -15% -8% Source: Deutsche Bank, Chinese Pharmaceutical Association

Figure 48: 3-month rolling average for Deanxit Figure 49: 3-month rolling average for Ursofalk

-30%

-20%

-10%

0%

10%

20%

30%

40%

0

5

10

15

20

25

Deanxit YoY growthRMBm

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

5

10

15

20

25

30

35

40

Ursofalk YoY growthRMBm



Figure 50: 3-month rolling average for Xinhuosu Figure 51: 3-month rolling average for Imdur

0%

10%

20%

30%

40%

50%

60%

0

5

10

15

20

25

30

Xinhuosu YoY growthRMBm

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

0

5

10

15

20

25

30

35

Imdur YoY growthRMBm

Source: Deutsche Bank; Chinese Pharmaceutical Association

Source: Deutsche Bank; Chinese Pharmaceutical Association

18 April 2017

Health Care

China Healthcare


Humanwell (600079.SS)

Remifentanil/Sufentanil registered stable growth of 8%/24% in 2M17,

while Fentanyl declined by 10% YoY, compared to 12%/15%/-11% in

2016 respectively.

Figure 52: Growth summary for Humanwell (Jan 2015 – Feb 2017)


Remifentanil -14% 79% 1% 15% 5% 17% 11% 20% 10% -1% 15% 14%


32% -11% 43% 7% 13% 11% 1% 14% 9% 23% 14% -3%

Jan-17 Feb-17

10% 6%


9% 12% 14% 10% 22% 10% 8% 10%

Sufentanil Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

4% 95% -1% 16% 11% 26% 23% 18% 19% -1% 11% 18%


27% -21% 60% 14% 7% 15% -2% 22% 8% 37% 22% 6%

Jan-17 Feb-17

23% 26%


21% 18% 20% 10% 22% 12% 9% 19%

Fentanyl Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-25% 36% -22% -7% -23% -6% -18% -6% -17% -17% -16% -9%


-11% -32% 17% -18% -6% -9% -18% -4% -17% -4% -2% -19%

Jan-17 Feb-17

-9% -11%


-11% -12% -14% -13% -9% -12% -13% -9% Source: Deutsche Bank, Chinese Pharmaceutical Association

Figure 53: 3-month rolling average for Remifentanil Figure 54: 3-month rolling average for Sufentanil

0%

5%

10%

15%

20%

25%

0

5

10

15

20

25

30

35

40

45

50

Remifentanil YoY growthRMBm

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

5

10

15

20

25

30

35

40

45

50

Sufentanil YoY growthRMBm



18 April 2017

Health Care

China Healthcare


Fudan Zhangjiang (1349.HK)

ALA/ Libod registered growth deceleration with negative growth of

15%/22% in 2M17, vs. 12%/-6% in 2016.

Figure 55: Growth summary for Fudan Zhangjiang (Jan 2015 – Feb 2017)


ALA 4% 106% 69% 41% 50% 99% 40% 64% 32% 15% 74% 89%


72% 47% 39% 15% 26% 4% 5% 0% 16% -5% 2% -20%

Jan-17 Feb-17

-3% -31%


47% 62% 45% 60% 52% 14% 7% -9%


Rx data 55% 52% 29% -1%


Libod Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

29% 45% 15% 8% 18% 38% 15% 2% 15% -18% -2% -6%


4% 12% -20% -16% 5% -11% -18% 6% -20% -18% -11% 19%

Jan-17 Feb-17

-4% -42%


28% 20% 10% -9% -2% -8% -11% -3%


Rx data 24% 0% -5% -7%

Reported data 54% 9% 13% -1%


Figure 56: 3-month rolling average for ALA Figure 57: 3-month rolling average for Libod

-40%

-20%

0%

20%

40%

60%

80%

100%

0

2

4

6

8

10

12

ALA YoY growthRMBm

-20%

-10%

0%

10%

20%

30%

40%

50%

0

2

4

6

8

10

12

Libod YoY growthRMBm



18 April 2017

Health Care

China Healthcare


Luye Pharma (2186.HK)

Figure 58: Growth summary for Luye (Jan 2015 – Feb 2017)


Lipusu -3% 49% 24% 22% 15% 31% -23% 29% 27% 10% 36% 30%


36% 19% 23% 1% 35% 20% 67% 25% 7% 31% 20% 12%

Jan-17 Feb-17

26% -3%


19% 23% 11% 26% 26% 18% 27% 20%

Lutingnuo Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-6% 43% 7% 47% 26% 43% 40% 31% 62% 29% 45% 35%


55% 8% 37% -12% 13% -13% -13% 14% 1% 9% 15% 1%

Jan-17 Feb-17

8% 10%


10% 39% 45% 36% 35% -5% 0% 8%

Maitongna Monthly Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

-8% 89% 19% 35% 41% 52% 27% 28% 35% 22% 36% 27%


59% -17% 35% 2% -2% -11% -7% 6% -14% -6% -2% -3%

Jan-17 Feb-17

-7% 1%


20% 43% 30% 28% 27% -4% -6% -4%


Figure 59: 3-month rolling average for Lipusu Figure 60: 3-month rolling average for Maitongna

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

20

40

60

80

100

120

140

Lipusu YoY growthRMBm

-20%

-10%

0%

10%

20%

30%

40%

50%

0

2

4

6

8

10

12

14

16

Maitongna YoY growthRMBm



18 April 2017

Health Care

China Healthcare


Dawnrays (2348.HK)

Figure 61: Growth summary for Dawnrays (Jan 2015 – Feb 2017)


Leiyide 45% 85% 35% 83% 72% 54% 50% 23% 17% 47% 28% 48%

(Entecavir) Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

34% -11% 60% -11% 23% 12% 30% 24% 3% 8% 34% -14%

Jan-17 Feb-17

10% 15%


50% 69% 29% 41% 31% 7% 19% 7%


Figure 62: 3-month rolling average for Leiyide

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

2

4

6

8

10

12

14

Leiyide YoY growthRMBm


18 April 2017

Health Care

China Healthcare


Appendix 1

Important Disclosures

*Other information available upon request

Disclosure checklist

Company Ticker Recent price* Disclosure

Universal Medical 2666.HK 6.99 (HKD) 13 Apr 17 NA

Hengrui Medicine 600276.SS 54.18 (CNY) 17 Apr 17 NA

China Biologic Products CBPO.OQ 109.96 (USD) 17 Apr 17 NA Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors . Other information is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr. Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the "Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing. For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr

Analyst Certification

The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Jack Hu

Historical recommendations and target price: Universal Medical (2666.HK) (as of 4/13/2017)

1

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17

Secu

rity

Pri

ce

Date

Previous Recommendations

Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating

Current Recommendations

Buy Hold Sell Not Rated Suspended Rating

*New Recommendation Structure as of September 9,2002

**Analyst is no longer at Deutsche Bank

1. 31/10/2016: Upgrade to Buy, Target Price Change HKD9.60 Jack Hu, Ph.D

18 April 2017

Health Care

China Healthcare


Historical recommendations and target price: Hengrui Medicine (600276.SS) (as of 4/17/2017)

1

2

3 45

67

8

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17

Secu

rity

Pri

ce

Date







1. 06/10/2015: Upgrade to Buy, Target Price Change CNY55.00 Jack Hu, Ph.D

5. 31/08/2016: Buy, Target Price Change CNY50.00 Jack Hu, Ph.D

2. 30/10/2015: Buy, Target Price Change CNY60.00 Jack Hu, Ph.D 6. 01/11/2016: Buy, Target Price Change CNY55.00 Jack Hu, Ph.D



Historical recommendations and target price: China Biologic Products (CBPO.OQ) (as of 4/17/2017)

1

2

3

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17

Secu

rity

Pri

ce

Date







1. 12/07/2015: Upgrade to Buy, Target Price Change USD149.00 Jack Hu, Ph.D

3. 26/02/2017: Buy, Target Price Change USD155.00 Jack Hu, Ph.D

2. 06/01/2016: Buy, Target Price Change USD162.00 Jack Hu, Ph.D

18 April 2017

Health Care

China Healthcare


Equity rating key Equity rating dispersion and banking relationships

Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ) , we recommend that investors buy the stock.

Sell: Based on a current 12-month view of total share-holder return, we recommend that investors sell the stock

Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell.

Newly issued research recommendations and target prices supersede previously published research.

53 %

36 %

11 %17 % 16 % 18 %

050

100150200250300350400450500

Buy Hold Sell

Asia-Pacific Universe

Companies Covered Cos. w/ Banking Relationship

18 April 2017

Health Care

China Healthcare


Additional Information

The information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively

"Deutsche Bank"). Though the information herein is believed to be reliable and has been obtained from public sources

believed to be reliable, Deutsche Bank makes no representation as to its accuracy or completeness.

If you use the services of Deutsche Bank in connection with a purchase or sale of a security that is discussed in this

report, or is included or discussed in another communication (oral or written) from a Deutsche Bank analyst, Deutsche

Bank may act as principal for its own account or as agent for another person.

Deutsche Bank may consider this report in deciding to trade as principal. It may also engage in transactions, for its own

account or with customers, in a manner inconsistent with the views taken in this research report. Others within

Deutsche Bank, including strategists, sales staff and other analysts, may take views that are inconsistent with those

taken in this research report. Deutsche Bank issues a variety of research products, including fundamental analysis,

equity-linked analysis, quantitative analysis and trade ideas. Recommendations contained in one type of communication

may differ from recommendations contained in others, whether as a result of differing time horizons, methodologies or

otherwise. Deutsche Bank and/or its affiliates may also be holding debt or equity securities of the issuers it writes on.

Analysts are paid in part based on the profitability of Deutsche Bank AG and its affiliates, which includes investment

banking, trading and principal trading revenues.

Opinions, estimates and projections constitute the current judgment of the author as of the date of this report. They do

not necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank provides

liquidity for buyers and sellers of securities issued by the companies it covers. Deutsche Bank research analysts

sometimes have shorter-term trade ideas that are consistent or inconsistent with Deutsche Bank's existing longer term

ratings. Trade ideas for equities can be found at the SOLAR link at http://gm.db.com. A SOLAR idea represents a high

conviction belief by an analyst that a stock will outperform or underperform the market and/or sector delineated over a

time frame of no less than two weeks. In addition to SOLAR ideas, the analysts named in this report may from time to

time discuss with our clients, Deutsche Bank salespersons and Deutsche Bank traders, trading strategies or ideas that

reference catalysts or events that may have a near-term or medium-term impact on the market price of the securities

discussed in this report, which impact may be directionally counter to the analysts' current 12-month view of total return

or investment return as described herein. Deutsche Bank has no obligation to update, modify or amend this report or to

otherwise notify a recipient thereof if any opinion, forecast or estimate contained herein changes or subsequently

becomes inaccurate. Coverage and the frequency of changes in market conditions and in both general and company

specific economic prospects make it difficult to update research at defined intervals. Updates are at the sole discretion

of the coverage analyst concerned or of the Research Department Management and as such the majority of reports are

published at irregular intervals. This report is provided for informational purposes only and does not take into account

the particular investment objectives, financial situations, or needs of individual clients. It is not an offer or a solicitation

of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. Target prices are

inherently imprecise and a product of the analyst’s judgment. The financial instruments discussed in this report may not

be suitable for all investors and investors must make their own informed investment decisions. Prices and availability of

financial instruments are subject to change without notice and investment transactions can lead to losses as a result of

price fluctuations and other factors. If a financial instrument is denominated in a currency other than an investor's

currency, a change in exchange rates may adversely affect the investment. Past performance is not necessarily

indicative of future results. Unless otherwise indicated, prices are current as of the end of the previous trading session,

and are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank,

subject companies, and in some cases, other parties.

The Deutsche Bank Research Department is independent of other business areas divisions of the Bank. Details regarding

our organizational arrangements and information barriers we have to prevent and avoid conflicts of interest with respect

to our research is available on our website under Disclaimer found on the Legal tab.

Macroeconomic fluctuations often account for most of the risks associated with exposures to instruments that promise

to pay fixed or variable interest rates. For an investor who is long fixed rate instruments (thus receiving these cash

18 April 2017

Health Care

China Healthcare


flows), increases in interest rates naturally lift the discount factors applied to the expected cash flows and thus cause a

loss. The longer the maturity of a certain cash flow and the higher the move in the discount factor, the higher will be the

loss. Upside surprises in inflation, fiscal funding needs, and FX depreciation rates are among the most common adverse

macroeconomic shocks to receivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation

(including changes in assets holding limits for different types of investors), changes in tax policies, currency

convertibility (which may constrain currency conversion, repatriation of profits and/or the liquidation of positions), and

settlement issues related to local clearing houses are also important risk factors to be considered. The sensitivity of fixed

income instruments to macroeconomic shocks may be mitigated by indexing the contracted cash flows to inflation, to

FX depreciation, or to specified interest rates – these are common in emerging markets. It is important to note that the

index fixings may -- by construction -- lag or mis-measure the actual move in the underlying variables they are intended

to track. The choice of the proper fixing (or metric) is particularly important in swaps markets, where floating coupon

rates (i.e., coupons indexed to a typically short-dated interest rate reference index) are exchanged for fixed coupons. It is

also important to acknowledge that funding in a currency that differs from the currency in which coupons are

denominated carries FX risk. Naturally, options on swaps (swaptions) also bear the risks typical to options in addition to

the risks related to rates movements.

Derivative transactions involve numerous risks including, among others, market, counterparty default and illiquidity risk.

The appropriateness or otherwise of these products for use by investors is dependent on the investors' own

circumstances including their tax position, their regulatory environment and the nature of their other assets and

liabilities, and as such, investors should take expert legal and financial advice before entering into any transaction similar

to or inspired by the contents of this publication. The risk of loss in futures trading and options, foreign or domestic, can

be substantial. As a result of the high degree of leverage obtainable in futures and options trading, losses may be

incurred that are greater than the amount of funds initially deposited. Trading in options involves risk and is not suitable

for all investors. Prior to buying or selling an option investors must review the "Characteristics and Risks of Standardized

Options”, at http://www.optionsclearing.com/about/publications/character-risks.jsp. If you are unable to access the

website please contact your Deutsche Bank representative for a copy of this important document.

Participants in foreign exchange transactions may incur risks arising from several factors, including the following: ( i)

exchange rates can be volatile and are subject to large fluctuations; ( ii) the value of currencies may be affected by

numerous market factors, including world and national economic, political and regulatory events, events in equity and

debt markets and changes in interest rates; and (iii) currencies may be subject to devaluation or government imposed

exchange controls which could affect the value of the currency. Investors in securities such as ADRs, whose values are

affected by the currency of an underlying security, effectively assume currency risk.

Unless governing law provides otherwise, all transactions should be executed through the Deutsche Bank entity in the

investor's home jurisdiction. Aside from within this report, important conflict disclosures can also be found at

https://gm.db.com/equities under the "Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to

review this information before investing.

United States: Approved and/or distributed by Deutsche Bank Securities Incorporated, a member of FINRA, NFA and

SIPC. Analysts located outside of the United States are employed by non-US affiliates that are not subject to FINRA

regulations.

Germany: Approved and/or distributed by Deutsche Bank AG, a joint stock corporation with limited liability incorporated

in the Federal Republic of Germany with its principal office in Frankfurt am Main. Deutsche Bank AG is authorized under

German Banking Law and is subject to supervision by the European Central Bank and by BaFin, Germany’s Federal

Financial Supervisory Authority.

United Kingdom: Approved and/or distributed by Deutsche Bank AG acting through its London Branch at Winchester

House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank AG in the United Kingdom is authorised by the

Prudential Regulation Authority and is subject to limited regulation by the Prudential Regulation Authority and Financial

Conduct Authority. Details about the extent of our authorisation and regulation are available on request.

Hong Kong: Distributed by Deutsche Bank AG, Hong Kong Branch.

18 April 2017

Health Care

China Healthcare


India: Prepared by Deutsche Equities India Pvt Ltd, which is registered by the Securities and Exchange Board of India

(SEBI) as a stock broker. Research Analyst SEBI Registration Number is INH000001741. DEIPL may have received

administrative warnings from the SEBI for breaches of Indian regulations.

Japan: Approved and/or distributed by Deutsche Securities Inc.(DSI). Registration number - Registered as a financial

instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA,

Type II Financial Instruments Firms Association and The Financial Futures Association of Japan. Commissions and risks

involved in stock transactions - for stock transactions, we charge stock commissions and consumption tax by

multiplying the transaction amount by the commission rate agreed with each customer. Stock transactions can lead to

losses as a result of share price fluctuations and other factors. Transactions in foreign stocks can lead to additional

losses stemming from foreign exchange fluctuations. We may also charge commissions and fees for certain categories

of investment advice, products and services. Recommended investment strategies, products and services carry the risk

of losses to principal and other losses as a result of changes in market and/or economic trends, and/or fluctuations in

market value. Before deciding on the purchase of financial products and/or services, customers should carefully read the

relevant disclosures, prospectuses and other documentation. "Moody's", "Standard & Poor's", and "Fitch" mentioned in

this report are not registered credit rating agencies in Japan unless Japan or "Nippon" is specifically designated in the

name of the entity. Reports on Japanese listed companies not written by analysts of DSI are written by Deutsche Bank

Group's analysts with the coverage companies specified by DSI. Some of the foreign securities stated on this report are

not disclosed according to the Financial Instruments and Exchange Law of Japan. Target prices set by Deutsche Bank's

equity analysts are based on a 12-month forecast period.

Korea: Distributed by Deutsche Securities Korea Co.

South Africa: Deutsche Bank AG Johannesburg is incorporated in the Federal Republic of Germany (Branch Register

Number in South Africa: 1998/003298/10).

Singapore: by Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch (One Raffles

Quay #18-00 South Tower Singapore 048583, +65 6423 8001), which may be contacted in respect of any matters

arising from, or in connection with, this report. Where this report is issued or promulgated in Singapore to a person who

is not an accredited investor, expert investor or institutional investor (as defined in the applicable Singapore laws and

regulations), they accept legal responsibility to such person for its contents.

Taiwan: Information on securities/investments that trade in Taiwan is for your reference only. Readers should

independently evaluate investment risks and are solely responsible for their investment decisions. Deutsche Bank

research may not be distributed to the Taiwan public media or quoted or used by the Taiwan public media without

written consent. Information on securities/instruments that do not trade in Taiwan is for informational purposes only and

is not to be construed as a recommendation to trade in such securities/instruments. Deutsche Securities Asia Limited,

Taipei Branch may not execute transactions for clients in these securities/instruments.

Qatar: Deutsche Bank AG in the Qatar Financial Centre (registered no. 00032) is regulated by the Qatar Financial Centre

Regulatory Authority. Deutsche Bank AG - QFC Branch may only undertake the financial services activities that fall

within the scope of its existing QFCRA license. Principal place of business in the QFC: Qatar Financial Centre, Tower,

West Bay, Level 5, PO Box 14928, Doha, Qatar. This information has been distributed by Deutsche Bank AG. Related

financial products or services are only available to Business Customers, as defined by the Qatar Financial Centre

Regulatory Authority.

Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute,

any appraisal or evaluation activity requiring a license in the Russian Federation.

Kingdom of Saudi Arabia: Deutsche Securities Saudi Arabia LLC Company, (registered no. 07073-37) is regulated by the

Capital Market Authority. Deutsche Securities Saudi Arabia may only undertake the financial services activities that fall

within the scope of its existing CMA license. Principal place of business in Saudi Arabia: King Fahad Road, Al Olaya

District, P.O. Box 301809, Faisaliah Tower - 17th Floor, 11372 Riyadh, Saudi Arabia.

United Arab Emirates: Deutsche Bank AG in the Dubai International Financial Centre (registered no. 00045) is regulated

18 April 2017

Health Care

China Healthcare


by the Dubai Financial Services Authority. Deutsche Bank AG - DIFC Branch may only undertake the financial services

activities that fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai

International Financial Centre, The Gate Village, Building 5, PO Box 504902, Dubai, U.A.E. This information has been

distributed by Deutsche Bank AG. Related financial products or services are only available to Professional Clients, as

defined by the Dubai Financial Services Authority.

Australia: Retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product

referred to in this report and consider the PDS before making any decision about whether to acquire the product. Please

refer to Australian specific research disclosures and related information at

https://australia.db.com/australia/content/research-information.html

Australia and New Zealand: This research is intended only for "wholesale clients" within the meaning of the Australian

Corporations Act and New Zealand Financial Advisors Act respectively.

Additional information relative to securities, other financial products or issuers discussed in this report is available upon

request. This report may not be reproduced, distributed or published without Deutsche Bank's prior written consent.

Copyright © 2017 Deutsche Bank AG

David Folkerts-Landau Group Chief Economist and Global Head of Research

Raj Hindocha Global Chief Operating Officer

Research

Michael Spencer Head of APAC Research

Global Head of Economics

Steve Pollard Head of Americas Research

Global Head of Equity Research

Anthony Klarman Global Head of Debt Research

Paul Reynolds Head of EMEA

Equity Research

Dave Clark Head of APAC

Equity Research

Pam Finelli Global Head of

Equity Derivatives Research

Andreas Neubauer Head of Research - Germany

Stuart Kirk Head of Thematic Research

International locations

Deutsche Bank AG

Deutsche Bank Place

Level 16

Corner of Hunter & Phillip Streets

Sydney, NSW 2000

Australia

Tel: (61) 2 8258 1234

Deutsche Bank AG

Große Gallusstraße 10-14

60272 Frankfurt am Main

Germany

Tel: (49) 69 910 00

Deutsche Bank AG

Filiale Hongkong

International Commerce Centre,

1 Austin Road West,Kowloon,

Hong Kong

Tel: (852) 2203 8888

Deutsche Securities Inc.

2-11-1 Nagatacho

Sanno Park Tower

Chiyoda-ku, Tokyo 100-6171

Japan

Tel: (81) 3 5156 6770

Deutsche Bank AG London

1 Great Winchester Street

London EC2N 2EQ

United Kingdom

Tel: (44) 20 7545 8000

Deutsche Bank Securities Inc.

60 Wall Street

New York, NY 10005

United States of America

Tel: (1) 212 250 2500

China China Healthcarepg.jrj.com.cn/acc/Res/CN_RES/INDUS/2017/4/18/38809fe6-a171-4f61-a… · China...

Documents

Transcript of China China Healthcarepg.jrj.com.cn/acc/Res/CN_RES/INDUS/2017/4/18/38809fe6-a171-4f61-a… · China...