Table of contents
Invest in China’s pharmaceutical sector ................................................................. 3
Analysis of the global pharma industry.................................................................. 7
The pharmaceutical industry in China.................................................................. 24
Generic pharmaceuticals in China........................................................................ 42
Who will succeed in the API and generic sectors in China?.................................... 56
The United Laboratories (3933 HK); BUY.............................. 75
Investment thesis................................................................................................ 76
Valuation ............................................................................................................ 81
Earnings outlook................................................................................................. 87
Cash flow and balance sheet ............................................................................... 97
Investment considerations................................................................................. 100
Company overview............................................................................................ 105
Company structure............................................................................................ 110
Market analysis ................................................................................................. 112
Business development strategy.......................................................................... 121
Risks to our investment thesis........................................................................... 122
China Pharmaceutical Group Ltd (1093 HK); BUY................ 125
Investment thesis.............................................................................................. 126
Valuation .......................................................................................................... 129
Earnings outlook............................................................................................... 133
Cash flow and balance sheet ............................................................................. 143
Investment considerations................................................................................. 146
Company overview............................................................................................ 149
Company structure............................................................................................ 152
Market analysis ................................................................................................. 154
SWOT analysis................................................................................................... 159
Company strategy ............................................................................................. 160
Risks to our investment recommendation.......................................................... 161
Appendix 2: Important Disclosures.................................................................... 164