中国医疗行业月度跟踪-DeutscheBank-ChinaHealthcare：Monthlyplasmatracker：June2017

gyChina HealthcareHealth CarePharmaceuticals /BiotechnologyIndustry UpdateAsiaChinaHong KongIndustryChina HealthcareDate10 August 2017Deutsche BankMarkets ResearchMonthly plasma tracker: June 2017Growth decelerated in 2Q17; domestic players laggedAlbumin approval volume grew 16% YoY in 2Q17, compared with 22%/20%in 1Q17/2016, respectively. MNCs grew 29% YoY in 2Q17 vs. 18%/15% in1Q17/2016, respectively. However, growth of domestic companies dropped to-2% YoY in 2Q17 from 30%/28% in 1Q17/2016. Bellwethers CBPO and Hualangrew -13% and 59% YoY, respectively, in 2Q17 vs. 22%/9% in 1Q17.MNCs significantly outperformed; mixed performance from domestic playersBaxalta, Grifols and Hualan delivered exceptional growth of 97%, 46% and 59%YoY in 2Q17 vs. -5%, 14% and 9% in 1Q17. In comparison, growth of CSL,Octapharma and CBPO decelerated to 5%, -10% and -13% YoY in 2Q17 vs. 38%,6% and 22% in 1Q17. We attribute the growth divergence to volatilities in customreleases, approval timeline and timing of plasma collection/fractionation. Thatbeing said, we ponder how sustainable the growth from MNCs could be.IVIG approval growth moderated in 2Q17The overall industry growth moderated to 13% YoY in 2Q17 vs. 29%/24%in 1Q17/2016. Hualan and CBPO recorded YoY growth of 39% and 43%,respectively, in 2Q17 vs. 58% and 43% in 1Q17. Growth of RAAS and CNBGslumped to -47%/-22% in 2Q17 from 74%/161% in 1Q17, mainly due to volatileapproval data and fierce competition. On market dynamics, the market share ofCBPO and Hualan expanded by 5% and 1%, respectively, during 1H17. We remindinvestors that approval data has a strong correlation with reported sales data forall listed names.Maintaining price targets for CBPO and HualanWe base our price target of USD130 for CBPO on 23.5x 2018E EPS. Webelieve that CBPO deserves a valuation premium over other pharmaceutical peersgiven its long-term growth prospects and its strong risk profile amid sectorheadwinds. For CBPO, key downside risks include price erosion, disruption inplasma collection, cost inflation and delays in product launches. Our price targetof RMB38 for Hualan is based on 34x our 2018E EPS estimate. For Hualan,downside risks include lower-than-expected plasma collection volume, larger-than-expected increase in plasma costs, and smaller-than-expected ASP increase.Jack Hu, PhDResearch Analyst+852-2203 6208Top picksHengrui Medicine (600276.SS),CNY50.75BuyUniversal Medical (2666.HK),HKD6.37BuySinoBiopharmaceutical(1177.HK),HKD6.98BuySource: Deutsche BankCompanies featuredChina Biologic Products(CBPO.OQ),USD93.21Buy2016A 2017E 2018EP/E (x)25.818.716.9EV/EBITDA (x)19.215.312.9Price/book (x)6.254.493.76Hualan BiologicalEngineeri(002007.SZ),CNY29.00Buy2016A 2017E 2018EP/E (x)44.033.126.1EV/EBITDA (x)31.023.218.7Price/book (x)7.885.664.83Source: 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 i