China Meheco(SH:600056)2025-08-11 02:58Summary of Conference Call on China Healthcare Sector Industry Overview - The conference call focused on the China Healthcare sector, particularly the pharmaceutical industry, amidst concerns regarding potential tariffs from the US on pharmaceutical products and services [1][67]. Key Points and Arguments 1. Tariff Concerns: The US announced a ~100% tariff on semiconductor chips, which has negatively impacted market sentiment regarding upcoming pharmaceutical tariffs [2][8]. 2. Low Likelihood of Tariffs on BD Deal Payments: The analysis suggests a low probability of tariffs being imposed on out-licensing deal payments, as US tariffs have primarily targeted tangible goods rather than service-related income [3][8]. 3. Focus on Manufacturing Rights: Most business development (BD) agreements grant manufacturing rights to licensors, with some companies like Pfizer planning to manufacture licensed products in the US [3][8]. 4. Expectations for Future BD Deals: There is an expectation for an increase in BD deals in the second half of 2025, particularly from key pharmaceutical companies with robust pipelines such as Hengrui, Hansoh, Sino Biopharma, and CSPC [4][8]. 5. Minimal Impact of Tariffs: Chinese pharmaceutical companies have low exposure to finished drug sales in the US, indicating that any potential tariffs would likely have a minimal immediate impact [4][8]. Additional Important Insights - Market Reaction: The Hang Seng Healthcare index experienced a 3% decline during the trading session, attributed to profit-taking and concerns over US pharmaceutical tariffs [8]. - Service Trade Surplus: The US maintains a services trade surplus with China, which may further reduce the likelihood of tariffs on service-related income, including intellectual property transfers [3][8]. - Exhibit Data: An exhibit presented data showing that most Chinese pharmaceutical companies have minimal overseas sales contributions, reinforcing the argument that tariffs would not significantly affect their operations [11][12]. Conclusion - The overall sentiment regarding the China Healthcare sector remains attractive, with expectations for continued growth in business development activities despite tariff concerns [5][67].