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Coronavirus pandemic
BusinessCompanies

Coronavirus in China: 2021 outlook brightens for health care operators, pharmaceutical and device makers after price cuts

  • Hospital operators, internet-platform owners are likely to be among winners in 2021 as the pandemic impact wanes, Citigroup says
  • Price pressures could hit drug and device manufacturers as China imposed new centralised procurement system

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A student volunteer shows a senior resident how to make a hospital appointment using mobile phone at a community activity centre in Beijing on December 8, 2020. Photo: Xinhua
Eric Ng
China’s health care sector can expect a brighter outlook as services resume their growth trajectory after the government tackled the Covid-19 pandemic to strengthen economic expansion, analysts said.

While vaccine deployment is certain to hog the limelight, Citigroup said internet platform operators can profit from ongoing policy reforms to spur greater adoption of online services and reduce hospital trips. Pressure on drug prices is a key challenge to market players, China Renaissance Securities said.

“We expect hospital operators to see better fortunes,” Cui Cui, head of China health care research at Citigroup, said in an interview with South China Morning Post. “Pharmaceutical firms whose new drug sales ramp-up has been slower than expected due to disruptions should also benefit, while internet health care platform operators should continue to do well.”

An MSCI index tracking 81 Chinese health care stocks with a combined market value of HK$1.15 trillion (US$148 billion) advanced 61 per cent in 2020, the biggest gain since 2003 as the pandemic fuelled online delivery channels. WuXi Biologics, the biggest constituent with 20.5 per cent weight, surged 213 per cent, making it the top performer among all Hong Kong-listed stocks.

A separate gauge for 80 mainland-listed players climbed 29.4 per cent in 2020. The biggest member, Jiangsu Hengrui Medicine, gained 53 per cent after a near-doubling in 2019, according to Bloomberg data.

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