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The production value of China's pharmaceutical industry is projected to grow at an average annual rate of 22% from 2010 to 2019, according to a report issued by the Southern Medicine Economic Research Institute (SMERI).

The strong performance is attributed to the steady growth of China's economy, an aging population and increasing government investment in health care.

A key driver will be the Chinese government, which will spend a total of US$124.82 billion on health care reforms from 2009 to 2011.

However, there are challenges surrounding the Chinese pharmaceutical sector which include the slowdown of the global economy, uncertainties in export growth, instabilities and turbulences caused by the introduction of various new regulations and healthcare reform measures, looming amendments of government drug pricing policies, continuous financial pressures from hospital drug purchase tenders, and rising raw material and production costs.

Despite these issues, with continued robust market growth and active M&As, the pharmaceutical industry's future continues to be positive.

We all can profit from this trend by investing in solid Chinese companies listed in the U.S. that are still undervalued.

I selected 10 companies which have a score above 8. For the scores I used the website Trading China made by Rames Lupin. This website developed a Score Card.

Lotus Pharmaceuticals (OTCPK:LTUS)
Renhuang Pharmaceuticals (OTC:RHGP)
Weikang Bio-Tech (OTC:WKBT)
Biostar Pharmaceuticals (NASDAQ:BSPM)
China Biologic Products (NASDAQ:CBPO)
China Jo-Jo Drugstores (NASDAQ:CJJD)
China Kangtai Cactus (OTC:CKGT)
Huifeng Bio-Pharma (OTC:HFGB)
Nutrastar Int. (OTCQB:NUIN)

Tongli Pharmaceuticals [TGLP.OB]: This one doesn't have a score but could be a very interesting speculative play.

Disclosure: LONG LTUS, CBP, WKBT

Source: 10 Undervalued Chinese Pharmas