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The 2014 All-China Research Team: Health Care, No. 3: Qiyong (Jack) Hu

< The 2014 All-China Research TeamQiyong (Jack) HuDeutsche BankFirst-place appearances: 0

Total appearances: 3

Analyst debut: 2012

For a second consecutive year, Qiyong (Jack) Hu of Deutsche Bank appears at No. 3 on this lineup. The Hong Kong–based analyst follows 18 Chinese health care names and is commended by money managers for maintaining good relationships with companies in the industry. He also helps investors “to understand both the company fundamentals for the long term and the market sentiment for the short term,” one fan remarks. “This is very helpful in a complicated market like China.” Hu has been closely monitoring regulatory changes to the provincial-level centralized bidding procurement process by which most mainland health care institutions are required to purchase drugs. Price erosion resulting from this drug tenuring, which determines the companies that are allowed to sell their products in a given province, has tempered the analyst’s optimism on pharmaceuticals makers, he says. However, manufacturers positioned to take advantage of related volume-growth opportunities should be standouts, especially those that boast established flagship drugs or a pipeline of blockbusters. His favorite names in this line are Hong Kong–based CSPC Pharmaceutical Group and Beijing’s Sihuan Pharmaceutical Holdings Group. Regarding the hospitals subsector, Hu is “convinced that privatization of public hospitals is poised to create value on multiple fronts.” Phoenix Healthcare Group Co. of Beijing and other first movers will likely benefit from this wave of reform, he believes.

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