Jinwu Financial News | According to CMB International Development Research, the MSCI China Healthcare Index has a cumulative decline of 17.6% since the beginning of the year, outperforming the MSCI China Index by 30.1%. Benefiting from overseas interest rate cuts and improvements in the domestic macroeconomic environment, pharmaceuticals are expected to outperform the market as a highly flexible industry. The new medical insurance catalogue has been announced, and a number of major domestically produced innovative drugs have been included. The bank expects a moderate drop in the price of renewed varieties, reflecting the continued strong support of the Health Insurance Fund for innovative drugs. In September/October of this year, the balance of basic medical insurance (co-ordinated fund) improved markedly. As the policy focus shifts to stimulating the economy, the bank believes that the health insurance fund income and expenditure situation is expected to improve drastically. Health insurance fund regulations are becoming stricter, and products that meet the three characteristics of in-hospital, immediate needs, and health insurance will continue to grow. The medical equipment renewal policy is expected to be implemented at an accelerated pace and promote the profit recovery of domestic medical equipment companies.
The bank expects that sectors benefiting from improved health insurance funding include: 1) innovative drugs will receive more comprehensive health insurance coverage; 2) medical service institutions, improved accounts receivable and improved bad debts; 3) improved commercial circulation, accounts receivable, and increased revenue growth; 4) improved medical equipment and tendering. I am optimistic about BeiGene Shenzhou (06160), Cinda Biotech (01801), Columbotai Biotech (06990), Lianying Healthcare (688271), Pharmaceuticals (02359), Giant Biotech (02367), and Sansheng Pharmaceuticals (01530).