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Medical in China may be key to invest in August. Candidates are: China Medical Technologies (CMED), (MR) Mindray Medical, (SCR) Simcere Pharmaceutical, (SSRX) 3SBIO Pharma, (WX) WuXi Pharmatech July 23, 2008

Posted by deminvest in 3SBIO Pharma, China Medical Technologies, China Mobile, China stock, CHL, CMED, growth stock, Mindray Medical, MR, nasdaq, Nasdaq stock, SCR, Simcere Pharmaceutical, Single stocks, SSRX, stocks.
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Chinese Hospitals must be huge and many

Chinese Hospitals must be huge and many

When I see US Economy stuck and China Economy growing 10% pace my simple mind thinks:

1) I want to invest in China rather than in the US

2) I don’t want to invest in a Chinese company which exports to US

So I wonder… what will Chinese people spend on, as soon as they have some money in their pockets. The answer is easy. First on Cell phone, second on Health-care. Since I already am an happy owner of (CHL) China Mobile, China’s largest Cell Phone company, I should look at the Medical business.

CMED is a (healthy) health care company. China Medical Technologies provides tools for medical analysis, specially connected with fertility problems. CMED is quite expensive with Trailing P/E: 26 and Forward P/E: 15. What is interesting is the fact that China Medical Technologies is growing its Revenues 74.30% year on year. Earnings had a slower growth of 17.50%, but that is probably because the company is now mainly focused in gaining market shares and growing. CMED also pays a 1.00% dividend yield which is nice for such growth company.

MR is a larger than CME. Mindray had a nice growth: 8% yoy revenue growth 46% earnings growth yoy are strong and interesting. The fact that Mindray owns $313.84M of cash, about 8% of its Market Cap, is also pretty good.

(SCR) Simcere Pharmaceutical mainly produces generic pharmaceuticals which are good specially in an overpopulated and still poor country like China. Current P/E around 15 is an honest price-tag for a company that grew with Qtrly Revenue Growth (yoy):26.40% and Qtrly Earnings Growth (yoy):67.50%. Also 130 Millions cash are great news for a company that is valued as a whole 770 Million Market Cap.

(SSRX) 3SBIO is a Chinese biotech company that does biotech research for new pharmaceuticals. At 3SBIO they have already developed two good one:s EPIAO and TPIAO for blood diseases. Those two already guarantee Trailing P/E (yoy):16 and Forward P/E:12 which are excellent for a company that still plenty of cash for new research: SSRX owns 115.71M cash, more than half the market CAP 197.72M.

Market Cap: 195.99M. Meaning that half of this company’s price is made by cash.

(WX) WuXi Pharmatech is a Chinese – American company that offers services and products to Biotech research companies. I don’t like it because, from what I understood, it doesn’t do its own research, but gets pay by other biotech companies to help them. This should mean WX will never hit a Bingo. Also it is quite expensive, compared to the above: Trailing P/E :32.24, Forward P/E: 18.68. I must admit growth rates are impressing: Qtrly Revenue Growth (yoy):68.70%, Qtrly Earnings Growth :131.90%.

Comments»

1. scubaxx - November 16, 2008

@Demin

With a HealtCare reform on the way imposed by this comming administration.
Are there any stocks that you like, that would benefit directly from this reform? (Long term – HOLD)

Mauricio

2. deminvest - November 17, 2008

@ Mauricio,

the honest answer it that I don’t have a clue🙂
I know too little about Obama’s HealtCare reform. Those reforms may mean more money for healthcare companies, or the opposite: Public Hospitals and less money for private health-care.

Said that, healthcare resents less than other industries of recessions, so it should be pretty good now🙂


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