< The 2016 All-Asia Research Team

Shengji (Sean) Wu & team
Morgan Stanley
First-Place Appearances: 8

Total Appearances: 8

Team Debut: 2009

Morgan Stanley’s regional health care coverage is under new leadership, but that change at the top doesn’t stop the team from securing its eighth consecutive first-place finish. Newcomer Shengji (Sean) Wu now oversees the research effort, taking over from Bin Li, who captained this squad in all of its previous appearances and decamped last summer to become CEO and CIO of Asia-focused hedge fund Ally Bridge LB Healthcare Fund. Wu tracked biotechnology companies for Rodman & Renshaw in New York before his first stint at Morgan Stanley, where he reported on health care names in Shanghai and Hong Kong. He left for J.P. Morgan and spent four years covering the sector before returning to assume his current responsibilities in September. The researcher holds a bachelor’s degree in genetics from Shanghai’s Fudan University, an MBA in accounting and finance from the University of Chicago Graduate School of Business and a Ph.D. in cellular and molecular biology from New York University. He manages a five-person group whose members are based in Hong Kong, Mumbai, Seoul and Sydney; together they monitor 70 companies. “The sector has by and large underperformed the market because of policy headwinds against the drug names from government tender price cuts and reimbursement control,” reports Wu. “We see continued stress in the near term, but after the tenders are done — and with more policy clarity with drug reimbursement and pricing — we would expect the sector to rebound in the second half of 2016.” He and his associates are touting China’s Sinopharm Holding Co., a pharmaceuticals supply chain services provider, as the best name in this space. They like its “easy money environment, which means a much lower finance cost burden for a high-gearing company with a large amount of working-capital needs,” says Wu. In addition, the state-owned enterprise is relatively immune to drug price cuts, they contend, and is ripe for M&A and service expansion into other areas of the health care industry. Finally, Sinopharm’s standing as one of the mainland’s six SOEs targeted for reform “with regard to management incentive schemes and asset restructuring could unlock further potential for upside,” Wu notes. Morgan Stanley’s analysts win praise for their quality research and grasp of sector dynamics from one fund manager who asserts that “Sean follows his companies closely and has high convictions.”