德银中国医疗保健行业2017年9月血浆月度追踪2017120811页

8December2017HealthCareChinaHealthcareHealthCareHealthCareIndustryUpdateAsiaJapanNorthAmericaIndustryChinaHealthcareDate8December2017DeutscheBankMarketsResearchMonthlyplasmatracker:September20172%declineinalbuminapprovalvolumein3Q17Albuminapprovalvolumewasdown2%YoYin3Q17,comparedwith29%/20%growthin1H17/2016,respectively.MNCsdropped5%YoYin3Q17vs.38%/15%growthin1H17/2016,respectively.Growthofdomesticcompaniesalsodeceleratedto1%YoYin3Q17from14%/28%in1H17/2016.AlbuminapprovalvolumeofCBPOandHualandecreased42%and5%YoY,respectively,in3Q17vs.4%/36%increasein1H17.Albumin:weakperformancesfromdomesticplayersandMNCsWehighlightthattheindustrygrowthtrendreversedandmostofthemajorplayersexperiencedadeclineinalbuminapprovalvolumein3Q17.Baxalta,Grifols,Octapharma,HualanandCBPOdeclined22%,7%,2%,5%and42%YoYin3Q17,vs.80%,30%,16%,36%and4%growthin1H17.AlbuminapprovalvolumeofCSLwasflatin3Q17,vs.33%growthin1H17.Incontrast,RAAScontinuedtodelivergrowthof11%YoYin3Q17,vs.119%in1H17.Weattributethegrowthdivergencetovolatilitiesincustomreleases,theapprovaltimelineandtimingofplasmacollection/fractionation.IVIGapprovalsdroppedin3Q17Overallindustrygrowthturnednegativeto-16%YoYin3Q17vs.20%/24%in1H17/2016.MarketleadersHualanandCBPOrecorded15%and40%declines,respectively,in3Q17vs.48%and43%growthin1H17.GrowthofRAASandCNBGchangedto28%and-77%,respectively,in3Q17,from-11%and30%in1H17,mainlyduetovolatileapprovaldataandfiercecompetition.Onmarketdynamics,themarketsharesofbothCBPOandHualanexpanded1%inYTD9m17.Weremindinvestorsthatapprovaldatahaveastrongcorrelationwithreportedsalesdataforalllistednames.MaintainingpricetargetsforCBPOandHualanWebaseourpricetargetofUSD130forCBPOon23.5x2018EEPS.WebelievethatCBPOdeservesavaluationpremiumoverotherpharmaceuticalpeersgivenitslong-termgrowthprospectsandstrongriskprofileamidsectorheadwinds.ForCBPO,keydownsiderisksincludeM&Aintegration,priceerosion,disruptioninplasmacollection,costinflationanddelaysinproductlaunches.OurpricetargetofRMB26forHualanisbasedon28x2018EEPS.ForHualan,upsiderisksincludesmaller-than-expectedASPcuts,whiledownsiderisksincludecostinflation/higher-than-expectedASPcuts.JackHu,Ph.D.ResearchAnalyst+852-22036208MeganXuResearchAssociate+852-22035928ToppicksSinoBiopharmaceutical(1177.HK),HKD10.98BuyUniversalMedical(2666.HK),HKD6.99BuyJointownPharmaceuticals(600998.SS),CNY18.83BuySource:DeutscheSecuritiesInc.CompaniesfeaturedChinaBiologicProducts(CBPO.OQ),USD78.43Buy2016A2017E2018EP/E(x)25.815.214.0EV/EBITDA(x)19.212.410.5Price/book(x)6.253.733.14HualanBiologicalEngineeri(002007.SZ),CNY28.59Hold2016A2017E2018EP/E(x)44.037.030.8EV/EBITDA(x)31.026.422.4Price/book(x)7.885.725.07Source:DeutscheSecuritiesInc.DeutscheBankAG/HongKongDeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.DISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIX1.MCI(P)083/04/2017.THECONTENTMAYNOTBEDISTRIBUTEDINTHEPEOPLE’SREPUBLICOFCHINA(“THEPRC”)(EXCEPTINCOMPLIANCEWITHTHEAPPLICABLELAWSANDREGULATIONSOFPRC),EXCLUDINGSPECIALADMINISTRATIVEREGIONSOFHONGKONGANDMACAU.Distributedon:08/12/201710:42:08GMT0bed7b6cf11c8December2017HealthCareChinaHealthcarePage2DeutscheBankAG/HongKong8December2017HealthCareChinaHealthcareMonthlyapprovaldataDatatrackerforhumanalbuminandIVIGWehavecollectedapprovaldataforplasmaproducts–humanalbuminandIVIG–fromtheNationalInstitutesforFoodandDrugControlandprovincialinstitutesforfoodanddrugcontrolfrom2012toSep2017.Weremindinvestorsthatthesedatapointslargelycorrelatetotherevenueandvolumegrowthofplasmaproductmanufacturers.Inaddition,wehighlightthefollowing:1)wehaveconvertedalldosagesintoone—themostcommondosage—i.e.,10gforhumanalbuminand2.5gforIVIG,forthepurposeofabettercomparison,and2)wehavemainlyusedthree-monthrollingaveragesforourdatatosmoothoutthevolatilityofapprovaldata.WesummarizekeydataforhumanalbuminandIVIGinFigure1.Figure1:GrowthratesofhumanalbuminandIVIGapprovals3Q17Overall-2%29%16%25%20%Domestictotal1%14%36%18%28%MNCtotal-5%38%3%30%15%CBPO-42%4%50%34%43%RAAS11%119%60%-14%29%Hualan-5%36%34%60%43%CSL0%33%5%20%11%Baxalta-22%80%0%20%8%Grifols-7%30%15%120%52%Octapharma-2%16%-13%-12%-13%ApprovalsforIVIG3Q17Overall-16%20%31%28%24%CNBG-77%30%67%13%37%CBPO-40%43%-5%15%4%RAAS28%-11%-5%-22%-14%Hualan-15%48%104%52%80%ApprovalsforhumanalbuminSource:Source:DeutscheBank,InstitutesforFoodandDrugControlDeutscheBankAG/HongKongPage38December2017HealthCareChinaHealthcareHumanalbuminAlbuminapprovalsdecreased2%YoYin3Q17vs.29%/20%growthin1H17/2016.Previously,MNCsoutperformeddomesticplayersin1H17withYoYgrowthof38%vs.14%.However,bothoftheperformancesofMNCsanddomesticplayerswerelacklusterin3Q17,recording-5%and1%YoYgrowth,respectively.Drivenbyrobustoutperformancein1H17,marketshareofMNCsclimbedto62%inYTD9m17vs.58%in2016.Asforthedomesticbellwethers,CBPO'salbuminapprovalswereslashed42%YoYin3Q17vs.-13%/22%/80%/22%inthepreviousfourquarter