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Fosun Pharma stock upgraded, other Chinese vaccine producers to profit from inoculation drive, analysts say
- An index of vaccine makers in mainland China has risen 6.2 per cent this year, outpacing the CSI 300 Index’s 1.5 per cent drop
- Valuations and patent waivers are among key challenges to bullish profit outlook, analysts say
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Chinese vaccine producers stand to benefit from the quickening pace of Covid-19 vaccinations in mainland China and a sudden surge in infections across Asia, adding to a market-beating rally this year, analysts said.
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Beijing announced in March that 40 per cent of its 1.4 billion population would be vaccinated by June, with an estimated 70 to 80 per cent to be fully inoculated by early next year, if vaccine production is guaranteed. The government will foot the bill.
Daily inoculations could reach 20 million if needed, the equivalent of roughly half of the population of California, according to Shao Yiming, a researcher with the Chinese Centre for Disease Control and Prevention. With increased supplies of vaccines in the second half, herd immunity could be achieved within 2021, he told state broadcaster CCTV last week.
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“Earnings contribution to vaccine makers in China could be [sustained] for longer than expected,” said Chris Liu, a money manager at Invesco in Hong Kong. His China Health Care Equity Fund, which started on December 15, has gained 3.2 per cent this year. “We see more Chinese vaccines being approved and the competition is likely to dilute the market share of those early [movers].”
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