Healthcare Sector: Driven by aging population acrossthe globle the demand of more specialised drugs&device incnease at high speed

The healthcare sector has been growing approximately 15% annually from 2000 to 2016, and we believe it will continue to grow at a similarly significant pace for decades to come due to the increases in disposable income and an aging population. Compared to the American healthcare sector accounting for 19% of the country's GDP. The Chinese healthcare sector accounts for only about 6% of country's GDP. The key sub-sectors such as pharma, medical devices, services and biotech are all attractive areas. However, most sub-sectors are currently characterized as fragmented, sub-scale, relatively low tech and inefficient. We believe the improvement of technology through either innovation or IP licensing and industry consolidation are the main industry development drivers. For example, the number of pharma plants dropped from 10,000 to 6,000. We foresee a potential decrease to 3,000, in the future, which will create many new segment leaders.
Public companies are better off in such an environment of consolidation and upgrading processes. With their advantages in capital, size, talent, and their favorable supports from banks and governments, listed companies can develop both organically and through M&A. Investing in companies with leading positions in certain therapeutic areas, and then applying our value creation programs, stands to be both safe and rewarding.

Table: Healthcare Public Companies Accessible by Harmony, 2021  




Out of the 200 stocks, Harmony has tracked more than 100 for many years and short listed about 20.