The policy will be major good news for three types of enterprises, from the perspective of investment. The first is the enterprises of blood products whose demands exceed supplies, which are priced too low currently; the second is the enterprises with the Chinese patent medicine varieties currently suffering price rise in raw materials; the third is the brand OTC enterprises. The three types of enterprises will obviously benefit from the regulation of drug price control system.
The above three types of enterprises are the most optimistic about the price control loosening of blood products. Therefore, valuation of A Share enterprises of blood products has been under pressure for a long time: dynamic price earnings ratios of the leading enterprises of Hualan Bio, Tiantan Bio and Boya Bio-pharmaceutical have been lower than 30 times for a long time.
Products of current Chinese blood products enterprises are mainly divided into two categories: one is human albumin and intravenous immunoglobulins (IVIG), which can be produced by most enterprises; the other is the small products represented by blood coagulation factor, etc.
One senior executive of Boya Bio-pharmaceutical revealed the reporter, “Collection difficulty and cost of plasma rise year by year. Nutrition subsidy for plasma donator by most blood products enterprises is from 200 yuan/person to 300 yuan/person, which is obviously higher than the 150 yuan/person before 2010.” The cost pressure rises with each passing day, but the selling price is tightly controlled, therefore, the price loosening this time is hopeful to enhance the profit level of enterprises.
