Anti-graft campaign in medical sector a focus in H2, most pharmaceutical firms’ valuation now at low levels – CICC

 

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China’s National Health Commission and other government departments in July issued the “Key Tasks on Deepening the Reform in the Healthcare System in Second Half of 2023”, in which anti-corruption was listed as a focus of the authorities work. 

The latest amendment to the Criminal Law, which is under review, has also included bribery in the medical field in the provision of heavier penalties, reflecting the authorities’ greater efforts to combat corruption in the field, CICC said. 

Considering that the pharmaceutical sector has see corrections in valuation, most companies’ valuation is at a reasonable level and investors are suggested to pay heed to the more defensive stocks whose interim results exceed market expectations and whose valuation is at low historic lows, or companies whose results are weaker than expectation but with the ability to achieve long-term steady growth, it said.

CICC’s ratings and target prices of major Chinese pharmaceutical companies: 

Wuxi Biologics  | Outperform | HK$82

Akeso | Outperform | HK$60

CSPC Pharm | Outperform| HK$10.74

Hygeia Health | Outperform| HK$72.8

Sinopharm | Outperform| Hk$36.4

Livzon Pharmaceutical | Outperform| HK$34.2

Keymed Biosciences  | Outperform| HK$86.56