China Healthcare-PharmaMonitor:Monthly Prescription Data (#3,April,2016)

GS Monthly Prescription Monitor.

    In PharmaMonitor, we track the growth of Chinaprescription drugs (Rx). We look at the monthlyRx sales/volume data of lead drugs from 1,021Class 3/2 sample hospitals via CMEI (as a proxy toIMS Rx data) to gauge the growth trend of thepharma market and our covered companies.

    April Rx sales growth at 1.8%; YTD 8.0%.

    April sales / volume growth (+1.8% / -1.1% y/y)was notably slower than March (probably drivenby temporary channel restocking), which could bedue to distributors’ shipment controls during thetransition to the “two-invoice” distribution andbusiness tax to VAT conversion effective in May.

    Key data takeaways & stock implications.

    For lead drugs sales / volume growth from ourkey coverage companies in April: CSPC’s NBP(+26% / +26% y/y) and Oulaining (+17% / +10%y/y); Sino Biopharm’s Runzhong (+17% / +25%y/y); 3SBio’s EPIAO (-13% / -13% y/y) and TPIAO(+26% / + 28% y/y); Luye’s Lipusu (-2% / -1% y/y).

    We reiterate Buy on Luye (CL), Sino Biopharm andCSPC in view of YTD resilient key drug sales.