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ChinaBio® Survey Finds Rising Insider Optimism for China Healthcare
Commissioned by Barclays Bank, ChinaBio® recently completed a survey of 70 participants in the China healthcare sector (doctors, pharmacists, sales directors and executives), polling their outlook for the sector over the next six months. Over half of the respondents are optimistic. One year ago, only 44% considered themselves positive on the future of their industry. According to Barclays, the change in sentiment is one of several reasons to expect higher prices on China healthcare stocks (see report).
Barclays follows a portfolio of healthcare stocks that are traded in ex-China markets, mostly Hong Kong. Jason Mann, MD, PhD, Barclays’ analyst for China healthcare, believes the rise in sentiment shows that difficulties caused by government policy – which means mainly mandated price reductions – are now largely behind us.
One year ago, Barclays was not so optimistic. Its take on the sector was that most company’s stock prices were overpriced, compared to industry norms. And as the ChinaBio® survey pointed out, industry insiders were more pessimistic than analysts, who were not directly involved in day-to-day decisions. That discrepancy caused Dr. Mann to view the stocks skeptically.
All of that skepticism is now in the past. The survey shows that insiders are increasingly optimistic, and Barclays expects outsized results from smaller healthcare companies with increasing revenues and from larger, national-scale companies that will profit from increasing consolidation.
Disclosure: ChinaBio® has a business relationship with Barclays Bank.