中国医疗7月月度数据跟踪-DeutscheBank-ChinaHealthcareMonthlydatatracker,July2017

gyChina HealthcareHealth CarePharmaceuticals /BiotechnologyIndustry UpdateAsiaChinaHong KongMalaysiaIndustryChina HealthcareDate9 August 2017Deutsche BankMarkets ResearchMonthly data tracker: July 2017Monthly data tracker: July 2017Recent data suggest that: 1) drug consumption grew 12.1% YoY in 1H17 vs. 12%in 2016; 2) inpatient and outpatient traffic increased 4.0% and 1.0%, respectively,in YTD April 2017; 3) growth in government spending on healthcare reached 20%YoY in 1H17, vs. 10% in 2016; 4) vitamin C prices remained high; 5) the price of6-APA increased moderately, while that of 7-ACA dropped in July; 6) TCM rawmaterial prices were mixed; and 7) corn price decreased to RMB1,680/ton in July.Government spending, drug consumption, patient traffic and insuranceGrowth in government spending in healthcare increased to 22% YoY in June 2017(to RMB217bn); YTD 1H17 growth reached 20% compared with 10% YoY in 2016.Meanwhile, growth in drug consumption fluctuated and reached 13.6% YoY inJune 2017; YTD 1H17 growth was 12.1% vs. 12.0% and 14.2% YoY in 2016 and2015, respectively. Inpatient traffic continued to outpace outpatient flow, withthe former up 4.0% YoY and the latter rising 1.0% in YTD April 2017. In April,urban basic medical insurance inflow rose 42% and outflow increased 28%. Forcommercial insurance, the inflow of healthcare insurance declined 12% YoY inMay 2017, the first time since 2012, while the outflow of healthcare insurancecontinued to grow at 26% YoY. However, on a YTD basis, inflow still grew 17%vs. 23% for outflow.Vitamin C prices remained high; 6-APA price increased, 7-ACA price droppedDomestic vitamin C prices remained high with an ASP of RMB70/kg in July 2017,while imported vitamin C prices were down 1% to USD5.8/kg in June. The priceof 6-APA increased 11% to RMB210/kg in July 2017. The ASP of 7-ACA wasRMB370/kg, down 23% from the previous month. We remind investors that themain manufacturers had resumed the production of 7-ACA in September 2015 ata 16% price cut from RMB630/kg in June 2015.TCM raw material prices were mixedThe TCM raw material price index continued on its recent uptrend and climbed up0.5% MoM to 1,284. The ASPs of honeysuckle and indigowoad root decreased inJuly 2017. Honeysuckle and indigowoad are the main ingredients in Shineway’sflagship product, Qing Kai Ling. Ophiopogon root price increased 6%, while theprice of radix ginseng was down 9% in July – these are the main ingredients inShen Mai.Jack Hu, PhDResearch Analyst+852-2203 6208Top picksHengrui Medicine (600276.SS),CNY50.75BuySinoBiopharmaceutical(1177.HK),HKD6.98BuyUniversal Medical (2666.HK),HKD6.37BuySource: Deutsche BankDeutsche Bank AG/Hong KongDeutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should beaware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should considerthis report as only a single factor in making their investment decision. DISCLOSURES AND A