28 Jul | Purchase – Hutchison China Meditech
Anyone who’s dropped by Investor Trader more than once over the journey would know of my penchant for Chinese investments. I have no defense. In the short time we’ve been online we’ve held Renesola, West China Cement, China Biodiesel and Asian Citrus. Hell, even Synergy Health had a Chinese interest. That’s a fair slice of China in our investment pie.
China may be a juggernaut that’s cooled its jets a little of late (purposefully I might add) but the massive potential for a well-managed Chinese company constantly has me on the lookout for more.
So after a little homework it’ll come as no surprise that we’ve added a bunch of Hutchison China Meditech to our portfolio – 520 shares to be exact, that were purchased for £3.14 a pop on 19th July 2010.
The crux of the buy: Anyone who’s picked up a newspaper in the past decade knows that times in China, they are a changin’. China’s move from a predominantly agrarian economy to a 21st century economic super-power brings with it certain knock on effects. Health-care reform is now firmly in the sights of Party leaders and that’s where Hutchison China Meditech step in.
Chinese authorities have recently released a list of 307 primary medicines that state-owned health-care centres must stock by 2020. Hutchison China Meditech produces 17 of these, 16 of these are generic (predominantly over-the-counter and prescription traditional Chinese medicines) but one – SXBX, patented until 2016 – is not. This alone is more than justification for a little investor excitement.
Hutchison China Meditech also has its finger in a couple of other pies: it owns one of China’s largest pharma R&D businesses which in all likelihood, will be floated on Nasdaq in the next couple of years. HCM.L is also involved in an organic foods joint venture which has the potential to become a very significant contributor to profits in the coming years.
As always do your own homework, the Hutchison China Meditech website is a good place to start. Thanks again for dropping by.