This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sinopharm, Biostar, Lilly Rise on Medical Modernization in China


BEIJING (TheStreet) -- It's still popular in China to soak one's weary feet in warm ginger tea, but western-style pharmaceuticals are increasingly the remedies of choice in a country that's getting older and more urbanized.

That shift to modern medicine is accelerating, based on second-quarter and first-half financial reports released over the past week by Chinese drug companies.

Investing in this trend via U.S.-listed stocks in Chinese and non-Chinese drug companies can be tricky. Consider, for example, the legal challenges confronting GlaxoSmithKline (GSK) as Chinese authorities pursue bribery charges against the drugmaker, one of several multinationals on the mainland.

Read More: Warren Buffett's Top 10 Dividend Stocks

Moreover, shares in three among the handful of Chinese drug companies listed in New York -- Biostar Pharmaceuticals (BSPM) , China Pharma Holdings (CPHI) and Sinovac Biotech (SVA) -- have a habit of falling off cliffs. Biostar's price started sliding after hitting $15 a share in early 2010. Things looked better in March when shares rose sharply to $3, but since then the stock has returned to its November 2013 level of around $1.50.

China Pharma's performance has been dismal. The stock declined from an early 2010 peak of around $4 to just 30 cents a share today. Sinovac's stock price has fallen about 30% since hitting an all-time peak of $8 a share in mid-March.

But the second quarter may have marked a turnaround for Biostar, also called Aoxing in Chinese, thanks to its new over-the-counter drug for chronic hepatitis B, which afflicts 10% of China's 1.3 billion people. The company's net income increased to $1.6 million compared to a $730,000 loss in the second quarter last year.

Another standout is Hong Kong-listed and over-the-counter accessible Sinopharm (SHTDF) , whose shares have risen 26% over the past year. State-controlled Sinopharm, the country's biggest drugmaker, reported Monday first-half net profits climbed 25% from the same period 2013 to nearly $53 million. The company also reported revenues at its Shenzhen-listed subsidiary China National Accord Medicines jumped 14% to $1.8 billion.

Read More: For Pepsi and Coke, Taste Test Is Over -- Here's Why

Underscoring the rapid changes for health care in China is Sinopharm's rise. The company is only 11 years old but already has a network of 300 subsidiaries. Some of that growth can be linked to its mainland partnerships with global concerns including Baxter (BAX) , Pfizer (PFE) , Bayer (BAYRY) and Ipsen (IPSEF) .

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs