This wide sell-off could be due to a combination of factors, including the overall negative sentiment for China investment, Hengrui’s 1H21 underperformance, Anhui’s IVD GPOs, and a few sub-sector news incidentally coming out these days.

Most news items are not entirely new, except Hengrui’s 1H21 numbers. Hence, the market could be taking an opportunity to correct.

Looking into the rest of 2021, we reiterate that investors should focus on companies with FIC/BIC assets and globalisation potential.