Healthcare stocks in Australia, Japan and India outperform in April: research

Medtech was a major catalyst for Japanese stocks while the booming plasma industry bodes well for Australia.

Asia Pacific’s healthcare-related stocks ended mixed in April as major players in Australia, Japan and India outperformed while Chinese stocks underwhelmed, according to a research note by investment banking firm Jefferies.

Jefferies said Japanese healthcare-related stocks, through the Tokyo Stock Exchange Pharmaceutical (TOPIX Pharma) subindex, traded in line with the broader TOPIX index in April but certain players outperformed, boosted by medical technology.

Biotech firm Sosei emerged as the best performer last month as it beat TOPIX by 18%, followed by medical device specialist Terumo and pharma group Otsuka.

“Japan Medtech was generally strong in April, outperforming TOPIX by 1.7%. Last-year's headwinds have ameliorated, and we think that Medtech will continue to perform well,” the note published on 8 May read.

In the Australian bourse, Jefferies said biotech behemoth CSL led the gains on the back of a bright outlook for the plasma industry globally.

“We believe the plasma industry is underpenetrated and rational. The plasma industry can continue to grow strongly despite ongoing competitive threats,” it said.

Major drugmakers Cipla and Alkem were the growth drivers in the Indian healthcare sector last month as local players are expected to benefit from a strong flu season. Jefferies also expects increased sales for Indian companies in the contract development and manufacturing organization (CDMO) market while hospital stocks may see occupancy rates rise in the coming quarter.

While healthcare stocks rose in major Asia Pacific markets, the overall Chinese stock market lagged on subdued performance of the companies. Nonetheless, Jefferies still expects certain players like pharma chain operator Yifeng Pharmacy to see robust growth this year.

“Yifeng remains one of our top picks in the subsector on its high growth and efficiency profile,” it said.

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