摩根史丹利中国医疗市场报告2010

January 14, 2010 China Healthcare Valuation Map January 2010 First comprehensive valuation overview for the China healthcare universe: With recent IPOs of some interesting names in drug distribution and healthcare services subsectors, we find the time is right to launch our first comprehensive valuation overview for all listed Chinese healthcare companies along the value chain, including manufacturers of healthcare products (i.e. chemical drugs, traditional Chinese medicines TCM, biotech drugs, and medical devices), healthcare providers (hospitals and services), distributors, and retail pharmacies. To make the report more comprehensive, we also include valuation comparisons for China-based healthcare companies listed in various countries China, Hong Kong, the US, Singapore, and the UK. We will update this valuation report periodically. Off-shore cheaper than on-shore； US-listed cheaper than HK-listed； Reiterate overweight on drug sector: The total market cap of China healthcare companies was stable between 2000-05 but has expanded about seven times since 2006, thanks to stock appreciation and expanded listings in both domestic and foreign markets. Given the overall high valuation of the A-share market, it is not surprising that domestically listed companies are more expensive than those off-shore listed. US-listed China healthcare names are trading at about 9% lower than HK-listed. Drug stocks have underperformed the device stocks in the past 3 years. For 2010, we expect to see drug sector to outperform the device sector for the first time because we view drug companies as the direct and immediate beneficiaries of the ongoing healthcare reform. For details, please see our 2010 Year Ahead Report (published on 12/16/09). Inside pages include topics on: 1) Observations on valuation； 2) Market cap of sub-sectors； 3) Valuation comparison on P/E and PEG； 4) Top price performers； 5) Valuation gap between A and H-shares； 6) Industry valuation overview； 7) Sub-sector valuation； 8) Global valuation comparison； 9) Market cap as % of GDP； and 10) Complete list of Chinese healthcare companies. The purpose of this report is to provide a valuation overview on Chinese Healthcare industry periodically, including all companies in different sub-sectors and listed in various countries. China Healthcare Market Cap Progression (US$bn) 05010015000 01 02 03 04 05 06 07 08 09 10YTDChinese Healthcare companies listed globally# of Mkt CapListed In comps (US$bn) PE 10E 09 YTDChina 106 111 31.7x 120% 0%Hong Kong 46 23 18.5x 115% 3%U.S. 24 10 16.9x 135% 5%Singapore 6 0.5 9.3x 99% 4%London 3 0.5 39.7x 250% 0%Total 185 145 26.0x 122% 1%PerformanceSubsectors of Chinese healthcare companies# of Mkt CapSubsector comps (US$bn) PE 10E 09 YTDBiotech 27 16 26.4x 154% 2%Chemical 80 57 24.8x 118% 1%Device 14 11 22.2x 123% 5%Distributors 7 13 32.7x 96% 3%Drugstores 5 7 23.3x 126% 1%TCM 45 39 27.8x 119% 0%Hospital/Services 7 0.5 15.4x 91% 3%Total 185 145 26.0x 122% 1%PerformanceSource: Factset for non-covered companies, Morgan Stanley Research Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. += Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to NASD/NYSE restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Morgan Stanley Asia Limited+ Bin Li Bin.L +852 2239 7596 Sean Wu Sean.W +86 21 2326 0046 Christopher Lui C.L +852 2239 1883 MORGAN STANLEY RESEARCH ASIA/PACIFIC 2 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map China Healthcare: Valuation Map Introduction The purpose of this report is to offer a valuation overview on the Chinese Healthcare industry periodically, including all companies in different sub-sectors and listed in various countries. Several observations on valuation Market cap and PE The total market cap for the Chinese healthcare sector is close to US$145B. Total market cap for Chemical Drugs is $80B, TCM $45B, Biotech $16B, Medical Devices $11B, Distribution $13B, Drugstores $10B, and Hospital/Services $0.5B. The price to earnings (PE 10) ratios are chemical drug 24.8x, TCM 27.8x, biotech 26.4x, and medical devices companies 22.2x. Manufacturing companies dominate the industry, accounting for 85% of the total sector. This resembles the situation in the US market where the market cap for US healthcare manufacturers is 87% of the total healthcare market cap. Device and service sector under-represented Drug stocks dominate the Chinese healthcare market cap with 78% share. Medical device and services provider companies are well under represented in the Chinese stock market at 11% and 0.4%, respectively. A-share accounts for 77% of market cap The total market cap of China-listed (A-share) healthcare companies has reached $111B, or 77% of the China healthcare universe that we are tracking. Hong Kong and US-listed China healthcare companies accounted for 16% and 7% of the total market cap, respectively. A-share Stocks more expensive than Hong Kong and US Stocks The 2010 PE ratio of A-share companies is 31.7x while H-shares and US-listed China companies are 18.5x and 16.9x, respectively. A-share companies also have an average of PEG ratio of 1.5x where H-shares and US-listed both have 1.1x. 3 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Contents China Healthcare: Valuation Map the Introduction. 2 Several observations on valuation .2 Market cap of healthcare sub-sectors on the value chain (China vs. U.S.) .4 A, H subsector market cap progression .6 Valuation comparison on PE and PEG.7 Top price performers in China Healthcare.10 Valuation gap between A and H-shares.11 Valuation overview of the Chinese healthcare industry.12 Sub-sector valuation .13 Global Valuation Comparison.14 Expecting Drug Sector to outperform in 2010 .17 Complete List of Chinese Healthcare Companies.27 All priced as of January 11, 2010 4 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Market cap of healthcare sub-sectors on the value chain (China vs. U.S.) Exhibit 1 Market Cap on China Healthcare Value Chain (China) .Chemical, 57TCM, 39Biotech, 16Device, 11Hospital/Services, 0.5Drugstores, 7, Distributors, 13.Healthcare Value Chain in China US$145bnSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 2 Market Cap on the US Healthcare Value Chain (U.S.) .Chemical, 665Device, 323Biotech, 263Hospital/Services, 57Drugstores, 88, Distributors, 48, .Healthcare Value Chain in the U.S. US$1444bn,Source: Factset, Morgan Stanley Research, Priced as of Jan 11 2010 5 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 3 Total market cap of Chinese healthcare subsectors Biotech11%Device8%TCM27%Distributors9%Drugstores5%Chemical40%Hospital/Services0.4%ChinaUS$145bnSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 4 Total market cap of U.S. healthcare subsectors Biotech18%Device22%Hospital/Services4%Distributors3%Drugstores6%Chemical47%USUS$1444bnSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 5 Total market cap of China, U.S. healthcare subsectors China USSubsector US$bn % US$bn %Biotech 16 11% 263 18%Chemical 57 40% 665 46%Device 11 8% 323 22%Distributors 13 9% 48 3%Drugstores 7 5% 88 6%Hospital/Services 0.5 0.4% 57 4%TCM 39 27%Total 145 100% 1444 100%Source: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 6 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map A, H subsector market cap progression Exhibit 6 Total market Cap soared since 2007 (US$bn) 05010015095 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10YTDTCMHospital/ServicesDrugstoresDistributorsDeviceChemicalBiotechSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 7 Market cap progression for China Healthcare industry Year end 95969798990001020304050607080910YTDBiotech 0.1 0.2 0.2 0.1 1.8 2.1 3.1 4.2 3.9 3.1 4.8 11.1 7.5 16.1 16.2Chemical 0.1 0.6 1.0 1.2 1.9 12.4 11.3 10.5 10.3 8.3 8.1 13.7 47.6 28.9 55.6 57.4Device 0.3 0.3 0.4 0.6 0.9 2.0 4.3 7.8 4.9 8.4 11.4Distributors 1.8 1.5 1.5 1.1 0.8 0.7 1.5 4.5 3.1 8.1 13.0Drugstores 0.1 0.2 0.5 0.6 1.5 1.3 1.3 1.0 0.4 0.4 1.5 9.0 2.7 6.9 7.0Hospital/Services 0.0 0.2 0.1 0.1 0.2 0.1 0.3 0.4 0.8 0.3 0.5 0.5TCM 0.2 0.2 0.2 0.9 4.9 5.7 5.0 5.3 6.0 5.9 11.6 28.8 17.2 38.9 39.3China Total 0.1 1.1 1.5 2.1 3.5 23 22 22 23 20 20 38 110 65 134 145Biotech 12% 11% 8% 4% 8% 9% 14% 19% 19% 15% 13% 10% 12% 12% 11%Chemical 100% 57% 67% 56% 55% 54% 51% 48% 45% 41% 40% 36% 43% 45% 41% 40%Device 1% 1% 2% 3% 5% 10% 11% 7% 8% 6% 8%Distributors 8% 7% 7% 5% 4% 3% 4% 4% 5% 6% 9%Drugstores 12%1%25%16%7%6%6%4%2%2%4%8%4%5%5%Hospital/Services 0.3%0.8%0.3%0.4%0.8%0.7%1.4%1.1%0.7%0.4%0.4%0.4%TCM 19% 12% 11% 24% 21% 25% 23% 23% 29% 29% 31% 26% 27% 29% 27%China Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%Market Cap (US$bn)Subsector as % of total Market CapSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 7 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Valuation comparison on PE and PEG We have used PE and PEG (based on the current price, estimated 10 EPS and growth rate) to assess the valuation of China-based healthcare companies listed in China, Hong Kong, the US, the UK, and Singapore. We have plotted various sub-sectors based on their PEG and PE ratios. We divide the graph into four quadrants using PEG ratio of 1.0x and PE ratio of 25.0x (the average PE for all China healthcare stocks is 26.0x): 1) Quadrant I - lowest PE and PEG (PE1.0) 3) Quadrant III - high PE and high PEG (PE25, PEG1.0) 4) Quadrant IV - high PE but low PEG (PE25, PEG1.0) Conclusion: A-shares (most expensive)； US-listed (least expensive) On average, China-listed healthcare companies have high valuation measured by PE and PEG. Although Hong Kong-listed healthcare companies are trading at a PEG ratio of 1.1x, their PE is still below 20.0x. US listed Chinese healthcare companies are trading at 16.9x PE and 1.1x PEG ratios. Exhibit 8 PE & PEG Comparison of A, H, US, Singapore and London listed Chinese healthcare companies CHHKUSLN0.0x0.5x1.0x1.5x2.0x2.5x0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 40.0x 45.0x 50.0xII IIIIIVPEG10EPE 10ESource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 8 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 9 PE & PEG Comparison of Chinese healthcare subsectors A-BiotechA-ChemicalA-DeviceA-TCMH-ChemicalH-DeviceH-TCMH-Hospital/ServicesUS-BiotechUS-ChemicalUS-DeviceA-Distributors0.0x0.5x1.0x1.5x2.0x2.5x0.0x 5.0x 10.0x 15.0x 20.0x 25.0x 30.0x 35.0x 40.0x 45.0x 50.0xPEG10EPE 10EII IIII IVSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 10 PE & PEG for Chinese Healthcare companies (sorted by listing location and subsector) Legend Listed in PE 10 PEG 10 Legend Listed in Subsector PE 10 PEG 10CH China 31.7x 1.5x A-Biotech China Biotech 44.6x 2.3xHK Hong Kong 18.5x 1.1x A-Chemical China Chemical 30.4x 1.2xUS US 16.9x 1.1x A-Device China Device 34.2x 1.0xSP Singapore 9.3x 2.6x A-TCM China TCM 30.9x 1.8xLN London 39.7x 0.5x A-Distributors China Distributors 29.7x 1.0xH-Biotech China Biotech 7.0x 3.1xH-Chemical China Chemical 18.1x 0.7xH-Device China Device 22.2x 1.0xH-TCM China TCM 14.8x 0.8xH-Distributors China Distributors 50.6x 1.6xH-Hospital/Services China Hospital/Servic 12.4x 1.9xUS-Biotech China Biotech 15.0x 0.4xUS-Chemical China Chemical 13.4x 1.4xUS-Device China Device 14.3x 0.9xUS-Drugstores China Drugstores 3.1x 26.3xSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 9 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 11 Quadrants info for subsectors / countries listed for Chinese Healthcare companies For Exhibit 8 I) Low PE Low PEGII) Low PE High PEG US, Singapore & Hong Kong listed China HealthcareIII) High PE High PEG China listed Chinese HealthcareIV) High PE Low PEG London listed Chinese HealthcareFor Exhibit 9 I) Low PE Low PEG H-Chemical H-TCM US-Biotech US-DeviceII) Low PE High PEG H-Biotech H-Device H-Hospital/Services US-Chemical US-DrugstoresIII) High PE High PEG A-Biotech A-Chemical A-Device A-TCM H-DistributorsIV) High PE Low PEG A-DistributorsSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 10 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Top price performers in China Healthcare Exhibit 12 Top A-shares performers (2009) Performance Market CapTicker Rating Price Company 09 (US$mn) 09E 10E PE10E PE11E PEG10E EV/Sales 10E1 000078-CN N/C CNY 15.93 Shenzhen Neptunus Bioengineering Co. Ltd. 446% 15152 600866-CN N/C CNY 13.99 Guangdong Zhaoqing Starlake Bioscience Co. Inc. 277% 9803 600421-CN N/C CNY 8.44 Wuhan National Pharmaceutical Technology Co. Ltd. 244% 2434 002004-CN N/C CNY 41.81 Chongqing Huapont Pharmaceutical Co. Ltd. 237% 818 96 110 45.9x 36.4x 2.4x 7.4x5 600976-CN N/C CNY 14.36 Wuhan Jianmin Pharmaceutical Groups Co. Ltd. 219% 3226 600739-CN N/C CNY 41.90 Liaoning Cheng Da Co. Ltd. 213% 5031 20.4x7 000788-CN N/C CNY 17.78 PKU International Healthcare Group Southwest Pharmaceutical C 213% 6038 600297-CN N/C CNY 8.95 Merro Pharmaceutical Co. Ltd. 210% 4589 000766-CN N/C CNY 8.91 Tonghua Golden-Horse Pharmaceutical Industry Co. Ltd. 200% 58510 000661-CN N/C CNY 27.85 Changchun High & New Technology Industries (Group) Inc. 194% 52311 200028-CN N/C HKD 19.18 Shenzhen Accord Pharmaceutical (B) 194% 698 147 177 17.9x 16.6x 0.8x 5.2x12 600773-CN N/C CNY 8.95 Along Tibet Co. Ltd. PLC 194% 30413 000990-CN N/C CNY 17.71 Chengzhi Co. Ltd. 192% 72614 600466-CN N/C CNY 10.69 Sichuan Dikang Sci & Tech Pharmaceutical Industry Co. Ltd. 190% 27315 600222-CN N/C CNY 9.32 Henan Taloph Pharmaceutical Stock Co. Ltd. 186% 43216 600993-CN N/C CNY 38.51 MaYinglong Pharmaceutical Group Co. Ltd. 185% 916 184 241 30.1x 22.3x 0.6x 3.6x17 000522-CN N/C CNY 12.60 Guangzhou Baiyunshan Pharmaceutical Co. Ltd. 178% 868 410 451 46.7x 38.2x 1.8x 2.3x18 002219-CN N/C CNY 23.77 Gansu Duyiwei Biological Pharmaceutical Co. Ltd. 177% 65519 600538-CN N/C CNY 7.83 Beihai Gofar Marine Biological Industry Co. Ltd. 175% 31920 600351-CN N/C CNY 17.31 Yabao Pharmaceutical Group Co. Ltd. 168% 800 223 268 27.9x 22.3x 0.7x 3.1xTotal A-share Chinese healthcare companies: Mean 120%Median 113%Sales (US$mn)Source: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 13 Top Off shore listed performers (2009) Performance Market CapTicker Rating Price Company 09 (US$mn) 09E 10E PE10E PE11E PEG10E EV/Sales 10E1 WWIN-US N/C USD 7.60 Winner Medical Group Inc. 823% 85 98 98 13.8x 10.0x 0.3x 1.7x2 CBPO-US N/C USD 12.92 China Biologic Products Inc. 504% 293 104 123 11.8x 10.5x 0.4x 2.7x3 HCM-GB N/C GBP 1.98 Hutchison China MediTech Ltd. 405% 161 134 169 0.8x4 1177-HK N/C HKD 2.40 Sino Biopharmaceutical Ltd. 369% 2102 430 547 22.0x 18.0x 0.5x 3.5x5 SVA-US N/C USD 6.67 Sinovac Biotech Ltd. 359% 284 93 98 12.6x 12.9x 0.3x 2.8x6 BSPM-US N/C USD 4.19 Biostar Pharmaceuticals Inc. 341% 977 RHGP-US N/C USD 0.99 Renhuang Pharmaceuticals Inc. 326% 378 8019-HK N/C HKD 0.23 Everpride Biopharmaceutical Co. Ltd. 318% 219 CMSH-GB N/C GBP 4.78 China Medical System Holdings Ltd. 304% 360 87 142 14.7x 10.6x 0.5x 2.4x10 8221-HK N/C HKD 1.97 Lees Pharmaceutical Holdings Ltd. 278% 11411 587-HK N/C HKD 2.34 Hua Han Bio-Pharmaceutical Holdings Ltd. 259% 399 132 132 16.8x 2.6x12 8143-HK N/C HKD 0.08 Hua Xia Healthcare Holdings Ltd. 243% 4813 CPHI-US N/C USD 3.87 China Pharma Holdings Inc. 238% 164 61 75 7.0x 7.4x 1.2x 2.2x14 2877-HK N/C HKD 14.92 China Shineway Pharmaceutical Group Ltd. 233% 1591 224 274 15.2x 12.9x 0.5x 4.7x15 512-HK N/C HKD 0.68 China Grand Pharmaceutical & Healthcare Holdings Ltd. 225% 9416 8231-HK N/C HKD 0.96 Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co. Ltd. 207% 8817 2327-HK N/C HKD 0.40 Jiwa Bio-Pharm Holdings Ltd. 198% 8318 233-HK EW HKD 1.42 Mingyuan Medicare Development Co. Ltd. 192% 536 55 68 21.4x 18.9x 1.5x 9.3x19 8058-HK N/C HKD 7.15 Shandong Luoxin Pharmacy Stock Co. Ltd. 181% 56220 R12-SG N/C SGD 0.31 Reyoung Pharmaceutical Holdings Ltd. 180% 70Total H-share Chinese healthcare companies: Mean 125%Median 88%Sales (US$mn)Source: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 11 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Valuation gap between A and H-shares Shandong Xinhua has a big price gap of 70% between its A and H-shares. Its A-share has risen 122% in 2009, vs. H-share of 143%. The price gap for Guangzhou Pharmaceutical is 48%, smaller than that of Xinhuas. Guangzhou Pharmas A-share rose 93% in 2009 vs. H-share of 123%. The Guangzhou Pharma H-share is trading at a forward PE of 13.1x, compared to 22.3x for the A-shares. Exhibit 14 Valuation analysis between dual-listed healthcare stocks % Discounted vs. Market CapTicker Rating Company Price Price (USD) A-shares 09 YTD (US$mn) 10E 11E PEG10E EV/Sales 10E874-HK OW Guangzhou Pharmaceutical Co Ltd HKD 6.39 USD 0.82 123% 9% 1124 16.7x 13.1x 0.6x 0.9x600332-CN UW Guangzhou Pharmaceutical Co. Ltd. CNY 10.89 USD 1.60 93% -4% 1124 28.5x 22.3x 1.0x 1.9xDifference -0.77 48%719-HK N/C Shandong Xinhua Pharmaceutical Co. Ltd. HKD 2.92 USD 0.38 143% 1% 172 14.2x 12.4x 0.3x 0.5x000756-CN N/C Shandong Xinhua Pharmaceutical Co. Ltd. CNY 8.45 USD 1.24 122% -1% 552 45.8x 40.0x 1.0x 1.7xDifference -0.86 70%Non Pharmaceutical H-shares discount vs. A-shares (Avg): 35%1 USD = 7.7558 HKD1 USD = 6.8275 RMBMonday, January 11, 2010Performance PESource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 12 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Valuation overview of the Chinese healthcare industry The entire China healthcare universe is about $145B measured by market cap. A-share listed healthcare companies have the majority of the share with total market cap of $111B. HK-listed companies have a total market cap of $23B, followed by the US-listed companies $10B. We note the average price of A-share stocks has increased 120% and US-listed China healthcare companies rose 135%. In contrast, the price of H-share stocks have risen 115% last year. Exhibit 15 Valuation of Chinese healthcare companies listed in different markets # of Mkt Cap EPS CAGR EV EV/SalesListed In comps (US$bn) 09E 10E 11E 09E 10E 11E 09-11E 09E 10E 11E (US$bn) 10E 09 YTDChina 106 111 19 22 24 39.7x 31.7x 27.6x 29% 1.7x 1.5x 1.3x 116 5.8x 120% 0%Hong Kong 46 23 12 15 19 22.8x 18.5x 14.7x 25% 1.2x 1.1x 1.0x 26 3.6x 115% 3%U.S. 24 10 3 3 4 20.0x 16.9x 15.5x 20% 1.4x 1.1x 1.0x 10 2.9x 135% 5%Singapore 6 0.5 0.1 0.1 0.1 9.3x 9.3x 7.9x 4% 2.6x 2.6x 2.2x 0.4 1.5x 99% 4%London 3 0.5 0.2 0.3 0.4 18.3x 39.7x 10.6x 31% 0.6x 0.5x 0.3x 0.5 1.2x 250% 0%Total 185 145 35 41 47 31.7x 26.0x 21.7x 26% 1.6x 1.4x 1.2x 152 4.4x 122% 1%Sales (US$bn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 16 Market cap of Chinese healthcare companies (by listing location) China77%Hong Kong16%London0.4%U.S.7%Singapore0.3%US$145bnSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 13 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Sub-sector valuation The chemical drug sector is the biggest sub-sector with a market cap of $57B and a forward PE of 24.8x. TCM is the second biggest sub-sector with a market cap of $39B and a forward PE of 27.8x. Biotech has a market cap of $16B, where Medical Device and distributors are $13B and $11B in market cap, respectively. They are trading at 26.4x, 22.2x and 32.7x, respectively, on forward PE. Exhibit 17 Valuation for Chinese Healthcare subsectors # of Mkt Cap EPS CAGR EV EV/SalesListed In comps (US$bn) 09E 10E 11E 09E 10E 11E 09-11E 09E 10E 11E (US$bn) 10E 09 YTDChemical 80 57 9 10 11 28.2x 24.8x 19.7x 26% 1.4x 1.2x 1.0x 60 3.3x 118% 1%TCM 45 39 7 8 8 34.9x 27.8x 22.9x 23% 1.7x 1.6x 1.4x 38 4.1x 119% 0%Biotech 27 16 1.7 2.1 2.3 34.0x 26.4x 26.7x 24% 1.8x 1.7x 1.5x 17 9.7x 154% 2%Distributors 7 13 15 19 23 39.4x 32.7x 26.8x 36% 1.3x 1.1x 0.9x 16 2.5x 96% 3%Device 14 11 1.4 1.7 2.1 28.1x 22.2x 17.4x 32% 1.2x 1.0x 0.8x 12 6.5x 123% 5%Drugstores 5 7 0.3 0.4 0.4 33.7x 23.3x 21.9x 9% 4.4x 3.1x 2.6x 8 1.2x 126% 1%Hospital/Servi 7 0.5 0.3 0.4 0.1 17.9x 15.4x 12.0x 7% 2.0x 1.9x 1.8x 0.4 0.7x 91% 3%Total 185 145 35 41 47 31.7x 26.0x 21.7x 26% 1.6x 1.4x 1.2x 152 4.4x 122% 1%Sales (US$bn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 18 Market cap of Chinese healthcare companies (by subsector) TCM27%Device8%Hospital/Services0.4%Chemical40%Drugstores5%Biotech11%Distributors9%US$145bnSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 14 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Global Valuation Comparison Exhibit 19 Healthcare companies in different regions # of Mkt Cap EPS CAGRListed In comps (US$bn) 09E 10E 11E 09E 10E 11E 09-11E 09E 10E 11E 09 YTDNorth Am. 867 1464 1009 1081 1143 20.3x 18.7x 17.9x 20% 1.4x 1.4x 1.2x 94% 7%Europe 338 924 462 486 513 20.2x 19.5x 15.6x 22% 1.3x 1.1x 0.9x 41% 5%Japan 155 218 234 241 243 16.3x 15.6x 14.6x 22% 1.1x 1.0x 0.9x 23% 0%China 185 145 35 41 47 31.7x 26.0x 21.7x 26% 1.6x 1.4x 1.2x 122% 1%India 124 57 18 21 22 18.8x 16.0x 14.9x 24% 1.0x 0.8x 0.9x 105% 3%Australia 150 42 21 21 25 18.0x 18.4x 13.1x 12% 1.7x 1.7x 1.1x 96% 2%Sales (US$bn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 15 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 20 Healthcare correlates with S&P index, but outperforms in the bear market 10020030040095 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11S&P 500 S&P 500 / Health Care -SECBear in 2000 - 2002 Bear started in 2007Source: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 21 Chinese Healthcare stocks have outperformed the market since 2008 01/08 04/08 07/08 10/08 01/09 04/09 07/09 10/09 01/1020406080100120140MSCI China A-share HC Off-shore China HealthcareSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 16 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 22 Chinese Device sector outperformed and Drug sector underperformed vs. MSCI since 2008 305070901101/1/2008 7/1/2008 1/1/2009 7/1/2009Drugs Device MSCI ChinaDrug includes: SSRX-US, 874-HK, 600276-CN, SCR-US, 000538-CN； Device includes: CMED-US, MR-US, 233-HK, 8199-HK Source: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 23 CRO, Retail Drugstore, and Distribution vs. MSCI China 0501001502001/1/2008 7/1/2008 1/1/2009 7/1/2009Distribution Retail DrugstoresCRO MSCI ChinaCRO: WX-US； Retail Drugstore: NPD-US； Distribution: 1099-HK Source: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 17 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Expecting Drug Sector to outperform in 2010 Exhibit 24 2010 EPS growth forecast for companies within our coverage universe 0% 30% 60%WuXiSinopharmNepstarCMEDMingyuanMindrayWeigaoSimcere3SBioHengruiGZ PharmaYunan BaiyaoDrugsDeviceRetail DrugstoreDistributorContract Research OrganizationSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 25 2010 Sales Growth Forecast for subsectors within our coverage universe 0%10%20%30%40%50%Distribution CRO Drug Device Retail*Device: CMED Fiscal year ends in March, *Drug: The United Labs and China Pharmaceutical Group are excluded due to 2/3 of their business contains cyclical commodity pricings Source: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 26 2010 EPS Growth Forecast for subsectors within our coverage universe 0%10%20%30%40%50%Retail Drug Distribution CRO Device*Device: CMED Fiscal year ends in March, *Drug: The United Labs and China Pharmaceutical Group are excluded due to 2/3 of their business contains cyclical commodity pricings Source: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 18 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 27 2010 Sales Growth Forecast for companies within our coverage universe 0%10%20%30%40%Sinopharm Weigao 3SBio WuXi Mingyuan YunanBaiyaoGZ Pharma Hengrui Mindray Nepstar CMED* Simcere United Labs CPG*CMED Fiscal year ends in March, Source: Morgan Stanley Research estimates Exhibit 28 2010 EPS Growth Forecast for companies within our coverage universe -25%0%25%50%75%YunanBaiyaoNepstar GZ Pharma Hengrui Sinopharm Weigao United Labs Mindray Mingyuan WuXi CMED* 3SBio Simcere CPG*CMED Fiscal year ends in March, Source: Morgan Stanley Research estimates 19 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 29 China Healthcare Comp Sheet (snapshot of selected companies) Market Cap EPS CAGR EV/SalesTicker Company Name Rating (US$mn) 09E 10E 11E 09E-11E 10E 11E EV 10E 09 YTDBin Li Coverage (Morgan Stanley Research Estimates)SSRX-US 3SBio Inc. (ADS) OW USD 13.20 284 22.9x 20.6x 17.0x 39% 0.5x 0.4x 177 3.1x 76% -4%CMED-US China Medical Technologies Inc. (ADS) EW USD 15.16 415 6.8x 6.0x 5.0x 4% 1.4x 1.1x 721 4.4x -31% 8%NPD-US China Nepstar Chain Drugstore Inc. EW USD 7.37 786 37.7x 26.3x 21.9x 9% 3.1x 2.6x 440 1.2x 44% 1%1093-HK China Pharmaceutical Group Ltd. EW HKD 4.48 888 7.4x 9.6x 14.9x 887 1.0x 58% 4%874-HK Guangzhou Pharmaceutical Co Ltd OW HKD 6.39 1,124 22.7x 16.7x 13.1x 30% 0.6x 0.4x 630 0.9x 123% 9%600332-CN Guangzhou Pharmaceutical Co. Ltd. UW CNY 10.89 1,124 38.7x 28.5x 22.3x 30% 1.0x 0.8x 1,255 1.9x 93% -4%600276-CN Jiangsu Hengrui Medicine Co. Ltd. OW CNY 49.30 4,482 46.1x 35.2x 28.2x 37% 1.0x 0.8x 4,372 8.4x 64% -6%MR-US Mindray Medical International Ltd. (ADS) OW USD 36.54 3,921 27.9x 23.1x 17.7x 21% 1.1x 0.8x 3,921 5.3x 88% 8%233-HK Mingyuan Medicare Development Co. Ltd. EW HKD 1.42 536 25.7x 21.4x 18.9x 14% 1.5x 1.3x 641 9.3x 192% 7%8199-HK Shandong Weigao Group Medical Polymer Co. Ltd EW HKD 26.10 3,360 43.1x 34.4x 27.4x 25% 1.4x 1.1x 3,623 9.8x 120% 1%SCR-US Simcere Pharmaceutical Group (ADS) UW USD 9.64 600 19.4x 19.0x 20.4x 587 1.9x 29% 4%1099-HK Sinopharm Group Co. Ltd. OW HKD 31.00 6,544 65.8x 50.6x 38.7x 31% 1.6x 1.3x 8,901 1.0x 74% 13%3933-HK United Laboratories International Holdings Ltd. EW HKD 4.27 661 11.8x 9.6x 8.0x 14% 0.7x 0.6x 878 1.4x 101% 4%WX-US WuXi PharmaTech (Cayman) Inc. OW USD 17.66 1,126 21.5x 19.0x 15.4x 8% 2.4x 2.0x 1,171 3.5x 100% 11%000538-CN Yunnan Baiyao Group Co. Ltd. EW CNY 56.93 4,453 51.9x 32.7x 25.9x 32% 1.0x 0.8x 4,161 3.1x 76% -6%Average of above Bin Li Coverage (Morgan Stanley Research Estimates) 30.5x 23.7x 19.8x 21% 1.4x 1.1x 3.8x 81% 4%Selected ComparablesAOB-US American Oriental Bioengineering Inc. N/C USD 4.69 367 8.4x 7.7x 7.4x 0% 381 1.1x -32% 1%600055-CN Beijing Wandong Medical Equipment Co. Ltd. N/C CNY 10.20 323 334 85% 0%BJGP-US BMP Sunstone Corp. N/C USD 5.74 239 49.9x 259 1.5x 2% 1%2877-HK China Shineway Pharmaceutical Group Ltd. N/C HKD 14.92 1,591 16.4x 15.2x 12.9x 29% 0.5x 0.4x 1,288 4.7x 233% 3%CHDX-US Chindex International Inc. N/C USD 14.34 212 22.6x 18.5x 164 0.7x 78% 1%2348-HK Dawnrays Pharmaceutical Holdings Ltd. N/C HKD 1.39 140 132 79% 11%801-HK Golden Meditech Co. Ltd. N/C HKD 1.69 347 11.2x 10.8x 10.2x 65% 0.2x 0.2x 288 4.0x 79% -10%587-HK Hua Han Bio-Pharmaceutical Holdings Ltd. N/C HKD 2.34 399 16.8x 16.8x 348 2.6x 259% 22%8143-HK Hua Xia Healthcare Holdings Ltd. N/C HKD 0.08 48 41 243% 5%2005-HK Lijun International Pharmaceutical Holding Co. Ltd. N/C HKD 1.33 348 14.2x 12.7x 11.2x 33% 0.4x 0.3x 426 1.7x 119% 6%8058-HK Shandong Luoxin Pharmacy Stock Co. Ltd. N/C HKD 7.15 562 562 181% 15%600587-CN Shinva Medical Instrument Co. Ltd. N/C CNY 16.90 333 317 93% 4%1177-HK Sino Biopharmaceutical Ltd. N/C HKD 2.40 2,102 28.0x 22.0x 18.0x 45% 0.5x 0.4x 1,929 3.5x 369% -2%SVA-US Sinovac Biotech Ltd. N/C USD 6.67 284 11.9x 12.6x 12.9x 39% 0.3x 0.3x 278 2.8x 359% 5%8069-HK Tong Ren Tang Technologies Co. Ltd. N/C HKD 14.26 360 13.8x 12.4x 11.4x 10% 1.2x 1.1x 360 1.7x 122% 2%690-HK Uni-Bio Science Group Ltd. N/C HKD 0.45 75 72 173% -2%1889-HK Wuyi International Pharmaceutical Co. Ltd. N/C HKD 0.79 174 7.6x 5.9x 5.2x 3% 1.9x 1.6x 23 0.2x 10% 1%600267-CN Zhejiang Hisun Pharmaceutical Co. Ltd. N/C CNY 23.46 1,544 37.3x 29.0x 24.2x 31% 0.9x 0.8x 1,958 3.0x 62% -3%Average of above Selected Comparables 26.9x 21.8x 19.2x 25% 1.1x 0.9x 3.4x 102% 3%PricePE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 20 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 30 China Biotech comp sheet Market Cap EPS CAGR EV/SalesTicker Company Name Rating (US$mn) 09E 10E 11E 09E-11E 10E 11E EV 10E 09 YTDChina listed Biotech companies600196-CN Shanghai Fosun Pharmaceutical (Group) Co. Ltd. N/C CNY 20.70 3,644 31.0x 25.5x 21.2x 20% 1.3x 1.0x 4,071 6.5x 84% 6%600161-CN Beijing Tiantan Biological Products Co. Ltd. N/C CNY 24.94 1,783 68.3x 61.6x 59.4x 15% 4.0x 3.9x 1,813 13.1x 83% -6%002007-CN Hualan Biological Engineering Inc. N/C CNY 55.50 2,925 54.5x 43.1x 46.6x 31% 1.4x 1.5x 2,905 21.0x 130% 0%002022-CN Shanghai Kehua Bio-Engineering Co. Ltd. N/C CNY 20.65 1,240 41.5x 33.0x 26.1x 25% 1.3x 1.0x 1,192 10.5x 22% -6%000627-CN Hubei Biocause Pharmaceutical Co. Ltd. N/C CNY 7.54 745 815 130% 1%000416-CN Minsheng Investment Management Co. Ltd. N/C CNY 8.55 661 622 138% -3%600866-CN Guangdong Zhaoqing Starlake Bioscience Co. Inc. N/C CNY 13.99 980 1,078 277% 9%600867-CN Tonghua Dongbao Pharmaceutical Co. Ltd. N/C CNY 12.98 911 49.9x 32.4x 995 23% -2%002030-CN Da An Gene Co. Ltd. of Sun Yat-Sen University N/C CNY 15.35 540 557 161% -4%600594-CN Guizhou Yibai Pharmaceutical Co. Ltd. N/C CNY 17.25 594 30.8x 23.3x 17.2x 34% 0.7x 0.5x 613 2.6x 141% -4%000990-CN Chengzhi Co. Ltd. N/C CNY 17.71 726 870 192% 2%600538-CN Beihai Gofar Marine Biological Industry Co. Ltd. N/C CNY 7.83 319 406 175% -3%000766-CN Tonghua Golden-Horse Pharmaceutical Industry C N/C CNY 8.91 585 586 200% -2%Average of above China listed Biotech companies 46.0x 36.5x 34.1x 25% 1.7x 1.6x 10.8x 135% -1%Hong Kong listed Biotech companies809-HK Global Bio-Chem Technology Group Co. Ltd. N/C HKD 2.38 712 31.2x 9.2x 8.1x 3% 3.1x 2.7x 1,351 1.0x 54% 25%690-HK Uni-Bio Science Group Ltd. N/C HKD 0.45 75 72 173% -2%1177-HK Sino Biopharmaceutical Ltd. N/C HKD 2.40 2,102 28.0x 22.0x 18.0x 45% 0.5x 0.4x 1,929 3.5x 369% -2%8329-HK Shenzhen Neptunus Interlong Bio-Technique Co. L N/C HKD 1.36 166 166 111% -8%8231-HK Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co N/C HKD 0.96 88 88 207% 12%1164-HK Vital Pharmaceutical Holdings Ltd. N/C HKD 0.19 38 16 11% 5%8151-HK Essex Bio-Technology Ltd. N/C HKD 0.31 22 22 20% 17%Average of above Hong Kong listed Biotech companies 29.6x 15.6x 13.1x 24% 1.8x 1.6x 2.3x 135% 6%US Biotech companiesALXN Alexion Pharmaceuticals Inc. N/C USD 47.95 4,241 53.1x 34.7x 24.9x 70% 0.5x 0.4x 4,112 8.0x 35% -2%AMGN Amgen Inc. OW USD 56.77 60,233 11.3x 10.9x 10.7x 5% 2.1x 2.0x 54,982 3.6x -2% 0%BMRN BioMarin Pharmaceutical Inc. N/C USD 20.25 2,040 40.0x 20% 2.0x 2,173 5.5x 6% 8%BIIB Biogen Idec Inc. UW USD 54.08 15,766 13.6x 12.9x 12.2x 7% 1.9x 1.8x 15,367 3.5x 12% 1%CELG Celgene Corp. OW USD 57.27 26,272 27.6x 21.5x 17.5x 28% 0.8x 0.6x 23,534 7.4x 1% 3%JGBO Jiangbo Pharmaceuticals Inc. N/C USD 13.91 147 5.7x 6.2x 7.0x 55% 0.1x 0.1x 48 0.4x 193% 26%GILD Gilead Sciences Inc. EW USD 44.54 40,583 15.0x 13.1x 12.1x 18% 0.7x 0.7x 40,168 5.1x -15% 3%GENZ Genzyme Corp. UW USD 53.81 14,564 23.9x 15.1x 12.4x 3% 4.7x 13,558 2.7x -26% 10%UTHR United Therapeutics Corp. N/C USD 54.82 2,949 31.6x 19.5x 2,963 6.1x 68% 4%Average of above US Biotech companies 21.4x 18.3x 17.4x 26% 1.0x 1.5x 4.7x 30% 6%US Specialty Pharma companiesTEVA Teva Pharmaceutical Industries Ltd. (ADS) N/C USD 59.34 54,527 17.6x 13.3x 12.2x 82% 0.2x 0.1x 58,564 3.7x 32% 6%WPI Watson Pharmaceuticals Inc. N/C USD 39.41 4,177 15.4x 13.3x 12.1x 16% 0.8x 0.8x 4,356 1.3x 49% -1%MYL Mylan Inc. N/C USD 17.42 5,323 13.8x 11.5x 9.8x 8,505 1.6x 86% -5%AGN Allergan Inc. N/C USD 60.47 18,391 21.8x 19.4x 16.9x 24% 0.8x 0.7x 18,171 3.8x 56% -4%CEPH Cephalon Inc. N/C USD 63.01 4,704 10.7x 10.2x 9.2x 33% 0.3x 0.3x 4,788 2.0x -19% 1%FRX Forest Laboratories Inc. OW USD 31.04 9,405 9.3x 8.7x 8.0x 2% 4.8x 4.4x 6,300 1.5x 26% -3%LCI Lannett Co. Inc. N/C USD 6.14 150 22.7x 14.7x 14.1x 93% 0.2x 0.2x 135 1.1x 18% 4%RDY Dr. Reddys Laboratories Ltd. (ADS) N/C USD 25.98 4,377 25.8x 20.0x 17.2x 4,377 2.5x 147% 7%Average of above US Specialty Pharma companies 17.1x 13.9x 12.5x 42% 1.2x 1.1x 2.2x 50% 1%US listed Chinese Biotech companiesSSRX-US 3SBio Inc. (ADS) OW USD 13.20 284 22.9x 20.6x 17.0x 39% 0.5x 0.4x 177 3.1x 76% -4%CHBT China-Biotics Inc. N/C USD 14.67 251 12.4x 8.9x 6.7x 23% 0.4x 0.3x 269 2.4x 63% -5%SOBM Sinobiomed Inc. N/C USD 0.05 7 17 92% 4%SVA Sinovac Biotech Ltd. N/C USD 6.67 284 11.9x 12.6x 12.9x 39% 0.3x 0.3x 278 2.8x 359% 5%Average of above US listed Chinese Biotech companies 15.7x 14.0x 12.2x 33% 0.4x 0.4x 2.8x 147% 0%PricePE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 21 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 31 China Pharmaceuticals comp sheet Market Cap EPS CAGR EV/SalesTicker Company Name Rating (US$mn) 09E 10E 11E 09E-11E 10E 11E EV 10E 09 YTDChinese Pharmaceutical companies600276-CN Jiangsu Hengrui Medicine Co. Ltd. OW CNY 49.30 4,482 46.1x 35.2x 28.2x 37% 1.0x 0.8x 4,372 8.4x 64% -6%000538-CN Yunnan Baiyao Group Co. Ltd. EW CNY 56.93 4,453 51.9x 32.7x 25.9x 32% 1.0x 0.8x 4,161 3.1x 76% -6%600664-CN Harbin Pharmaceutical Group Co. Ltd. N/C CNY 17.88 3,234 23.1x 19.9x 3,114 65% -3%600196-CN Shanghai Fosun Pharmaceutical (Group) Co. Ltd. N/C CNY 20.70 3,644 31.0x 25.5x 21.2x 20% 1.3x 1.0x 4,071 6.5x 84% 6%600062-CN Beijing Double-Crane Pharmaceutical Co. Ltd. N/C CNY 22.91 1,923 27.3x 21.8x 18.2x 16% 1.3x 1.1x 1,854 2.2x 17% -3%002007-CN Hualan Biological Engineering Inc. N/C CNY 55.50 2,925 54.5x 43.1x 46.6x 31% 1.4x 1.5x 2,905 21.0x 130% 0%600161-CN Beijing Tiantan Biological Products Co. Ltd. N/C CNY 24.94 1,783 68.3x 61.6x 59.4x 15% 4.0x 3.9x 1,813 13.1x 83% -6%002001-CN Zhejiang NHU Co. Ltd. N/C CNY 47.32 2,339 16.0x 12.9x 13.0x 2,456 5.4x 99% -3%000423-CN Shandong Dong-E E-Jiao Co. Ltd. N/C CNY 24.91 2,380 44.7x 36.2x 28.7x 17% 2.2x 1.7x 2,153 6.0x 94% -5%600812-CN North China Pharmaceutical Co. Ltd. N/C CNY 11.90 1,782 37.2x 27.0x 2,175 93% 2%600085-CN Beijing Tongrentang Co. Ltd. N/C CNY 20.80 1,568 36.0x 32.9x 28.7x 13% 2.5x 2.2x 1,505 2.9x 71% -1%600332-CN Guangzhou Pharmaceutical Co. Ltd. UW CNY 10.89 1,124 38.7x 28.5x 22.3x 30% 1.0x 0.8x 1,255 1.9x 93% -4%002038-CN Beijing SL Pharmaceutical Co. Ltd. N/C CNY 45.59 1,665 45.4x 36.3x 28.9x 22% 1.7x 1.3x 1,617 20.9x 21% 3%600216-CN Zhejiang Medicine Co. Ltd. N/C CNY 34.65 2,247 14.8x 12.2x 10.7x 14% 0.9x 0.7x 2,272 3.4x 153% -3%600511-CN China National Medicines Corp. Ltd. N/C CNY 28.00 1,926 53.8x 43.1x 36.4x 24% 1.8x 1.5x 1,989 2.1x 79% 9%600267-CN Zhejiang Hisun Pharmaceutical Co. Ltd. N/C CNY 23.46 1,544 37.3x 29.0x 24.2x 31% 0.9x 0.8x 1,958 3.0x 62% -3%002022-CN Shanghai Kehua Bio-Engineering Co. Ltd. N/C CNY 20.65 1,240 41.5x 33.0x 26.1x 25% 1.3x 1.0x 1,192 10.5x 22% -6%Average of above Chinese Pharmaceutical companies 41.2x 32.6x 28.5x 23% 1.6x 1.4x 6.8x 90% 0%Off-shore listed PharmaSCR-US Simcere Pharmaceutical Group (ADS) UW USD 9.64 600 19.4x 19.0x 20.4x 587 1.9x 29% 4%AOB-US American Oriental Bioengineering Inc. N/C USD 4.69 367 8.4x 7.7x 7.4x 0% 381 1.1x -32% 1%TCM-US Tongjitang Chinese Medicines Co. (ADS) N/C USD 3.71 119 53.0x 46.4x 88 1.1x 27% -2%1093-HK China Pharmaceutical Group Ltd. EW HKD 4.48 888 7.4x 9.6x 14.9x 887 1.0x 58% 4%2877-HK China Shineway Pharmaceutical Group Ltd. N/C HKD 14.92 1,591 16.4x 15.2x 12.9x 29% 0.5x 0.4x 1,288 4.7x 233% 3%3933-HK United Laboratories International Holdings Ltd EW HKD 4.27 661 11.8x 9.6x 8.0x 14% 0.7x 0.6x 878 1.4x 101% 4%1177-HK Sino Biopharmaceutical Ltd. N/C HKD 2.40 2,102 28.0x 22.0x 18.0x 45% 0.5x 0.4x 1,929 3.5x 369% -2%874-HK Guangzhou Pharmaceutical Co Ltd OW HKD 6.39 1,124 22.7x 16.7x 13.1x 30% 0.6x 0.4x 630 0.9x 123% 9%1889-HK Wuyi International Pharmaceutical Co. Ltd. N/C HKD 0.79 174 7.6x 5.9x 5.2x 3% 1.9x 1.6x 23 0.2x 10% 1%8069-HK Tong Ren Tang Technologies Co. Ltd. N/C HKD 14.26 360 13.8x 12.4x 11.4x 10% 1.2x 1.1x 360 1.7x 122% 2%2005-HK Lijun International Pharmaceutical Holding Co. Ltd. N/C HKD 1.33 348 14.2x 12.7x 11.2x 33% 0.4x 0.3x 426 1.7x 119% 6%587-HK Hua Han Bio-Pharmaceutical Holdings Ltd. N/C HKD 2.34 399 16.8x 16.8x 348 2.6x 259% 22%A61-SG Luye Pharma Group Ltd. N/C SGD 0.63 222 209 116% 1%Average of above Off-shore listed Pharma 18.3x 16.2x 12.3x 20% 0.8x 0.7x 1.8x 118% 4%Average of above U.S. Pharma 10.3x 9.4x 8.2x 16% 0.7x 0.7x 1.7x 25% -1%PricePE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 22 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 32 China Contract Research Organization (CRO) comp sheet Market Cap EPS CAGR EV/SalesTicker Company Name Rating (US$mn) 09E 10E 11E 09E-11E 10E 11E EV 10E 09 YTDChina CROWX-US WuXi PharmaTech (Cayman) Inc. OW USD 17.66 1,126 21.5x 19.0x 15.4x 8% 2.4x 2.0x 1,171 3.5x 100% 11%U.S. CRO companiesCVD Covance Inc. N/C USD 54.60 3,494 20.9x 18.1x 15.1x 6% 3.3x 2.7x 3,255 1.6x 19% 0%CRL Charles River Laboratories International Inc. N/C USD 34.39 2,266 14.9x 14.3x 12.5x 2,564 2.1x 29% 2%PPDI Pharmaceutical Product Development Inc. N/C USD 22.83 2,698 18.0x 17.6x 15.1x 2,093 1.6x -19% -3%ICLR Icon PLC (ADS) N/C USD 23.87 1,397 15.9x 14.4x 12.6x 12% 1.2x 1.0x 1,264 1.4x 10% 10%MDZ MDS Inc. N/C USD 7.57 909 31.8x 11.1x 892 2.2x 25% -1%PRXL PAREXEL International Corp. N/C USD 15.40 891 18.8x 16.9x 13.9x 4% 4.8x 4.0x 1,075 0.9x 45% 9%KNDL Kendle International Inc. N/C USD 20.10 299 10.7x 12.8x 10.8x 383 0.9x -29% 10%AMRI Albany Molecular Research Inc. N/C USD 9.33 295 54.2x 206 1.0x -7% 3%Average of above U.S. CRO companies 16.5x 18.0x 18.2x 7% 3.1x 2.6x 1.4x 9% 4%Indian CRO companies660251 Divis Laboratories Ltd. N/C INR 692.80 1,977 28.3x 22.3x 21.7x 3% 1,977 7.4x 1% 2%B058J5 Piramal Healthcare Ltd N/C INR 386.25 1,764 17.8x 13.9x 11.7x 34% 0.4x 0.3x 1,764 1.9x 52% 4%B10SSN Jubilant Organosys Ltd. N/C INR 330.65 1,066 12.0x 10.4x 9.7x 25% 0.4x 0.4x 1,066 1.1x 181% -1%674125 Biocon Ltd. UW INR 289.05 1,267 23.7x 21.9x 19.6x 8% 2.9x 2.6x 1,263 2.7x 125% 5%B0LLBY Dishman Pharmaceuticals & Chemicals Ltd. N/C INR 233.40 412 13.8x 10.6x 9.4x 15% 0.7x 0.6x 412 1.5x 68% -2%B0G7FW Shasun Chemicals & Drugs Ltd. N/C INR 39.70 42 9.2x 42 0.3x 151% -4%B0Z7LP Vimta Labs Ltd. N/C INR 35.60 17 17 16% 19%Average of above Indian CRO companies 19.1x 14.7x 14.4x 17% 1.1x 1.0x 2.5x 85% 3%China Healthcare companies listed in the U.S.MR-US Mindray Medical International Ltd. (ADS) OW USD 36.54 3,921 27.9x 23.1x 17.7x 21% 1.1x 0.8x 3,921 5.3x 88% 8%CMED-US China Medical Technologies Inc. (ADS) EW USD 15.16 415 6.8x 6.0x 5.0x 4% 1.4x 1.1x 721 4.4x -31% 8%AOB American Oriental Bioengineering Inc. N/C USD 4.69 367 8.4x 7.7x 7.4x 0% 381 1.1x -32% 1%SCR-US Simcere Pharmaceutical Group (ADS) UW USD 9.64 600 19.4x 19.0x 20.4x 587 1.9x 29% 4%BJGP BMP Sunstone Corp. N/C USD 5.74 239 49.9x 259 1.5x 2% 1%TCM Tongjitang Chinese Medicines Co. (ADS) N/C USD 3.71 119 53.0x 46.4x 88 1.1x 27% -2%SSRX-US 3SBio Inc. (ADS) OW USD 13.20 284 22.9x 20.6x 17.0x 39% 0.5x 0.4x 177 3.1x 76% -4%SVA Sinovac Biotech Ltd. N/C USD 6.67 284 11.9x 12.6x 12.9x 39% 0.3x 0.3x 278 2.8x 359% 5%Average of above China Healthcare companies listed in the U.S. 21.5x 19.3x 18.6x 21% 0.8x 0.7x 802 2.7x 65% 3%Hong Kong listed healthcare companies8199-HK Shandong Weigao Group Medical Polymer Co. Ltd EW HKD 26.10 3,360 43.1x 34.4x 27.4x 25% 1.4x 1.1x 3,623 9.8x 120% 1%874-HK Guangzhou Pharmaceutical Co Ltd OW HKD 6.39 1,124 22.7x 16.7x 13.1x 30% 0.6x 0.4x 630 0.9x 123% 9%3933-HK United Laboratories International Holdings Ltd. EW HKD 4.27 661 11.8x 9.6x 8.0x 14% 0.7x 0.6x 878 1.4x 101% 4%2877-HK China Shineway Pharmaceutical Group Ltd. N/C HKD 14.92 1,591 16.4x 15.2x 12.9x 29% 0.5x 0.4x 1,288 4.7x 233% 3%1093-HK China Pharmaceutical Group Ltd. EW HKD 4.48 888 7.4x 9.6x 14.9x 887 1.0x 58% 4%801-HK Golden Meditech Co. Ltd. N/C HKD 1.69 347 11.2x 10.8x 10.2x 65% 0.2x 0.2x 288 4.0x 79% -10%1177-HK Sino Biopharmaceutical Ltd. N/C HKD 2.40 2,102 28.0x 22.0x 18.0x 45% 0.5x 0.4x 1,929 3.5x 369% -2%233-HK Mingyuan Medicare Development Co. Ltd. EW HKD 1.42 536 25.7x 21.4x 18.9x 14% 1.5x 1.3x 641 9.3x 192% 7%8069-HK Tong Ren Tang Technologies Co. Ltd. N/C HKD 14.26 360 13.8x 12.4x 11.4x 10% 1.2x 1.1x 360 1.7x 122% 2%2005-HK Lijun International Pharmaceutical Holding Co. Ltd. N/C HKD 1.33 348 14.2x 12.7x 11.2x 33% 0.4x 0.3x 426 1.7x 119% 6%1889-HK Wuyi International Pharmaceutical Co. Ltd. N/C HKD 0.79 174 7.6x 5.9x 5.2x 3% 1.9x 1.6x 23 0.2x 10% 1%Average of above Hong Kong listed healthcare companies 18.4x 15.5x 13.7x 27% 0.9x 0.8x 998 3.5x 139% 2%PricePE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 23 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 33 China Medical Device comp sheet Market Cap EPS CAGR EV/SalesTicker Company Name Rating (US$mn) 09E 10E 11E 09E-11E 10E 11E EV 10E 09 YTDChinese Medical Device companiesCMED-US China Medical Technologies Inc. (ADS) EW USD 15.16 415 6.8x 6.0x 5.0x 4% 1.4x 1.1x 721 4.4x -31% 8%MR-US Mindray Medical International Ltd. (ADS) OW USD 36.54 3,921 27.9x 23.1x 17.7x 21% 1.1x 0.8x 3,921 5.3x 88% 8%233-HK Mingyuan Medicare Development Co. Ltd. EW HKD 1.42 536 25.7x 21.4x 18.9x 14% 1.5x 1.3x 641 9.3x 192% 7%8199-HK Shandong Weigao Group Medical Polymer Co. EW HKD 26.10 3,360 43.1x 34.4x 27.4x 25% 1.4x 1.1x 3,623 9.8x 120% 1%8247-HK Biosino Bio-Technology & Science Inc. N/C HKD 2.62 34 34 71% -5%801-HK Golden Meditech Co. Ltd. N/C HKD 1.69 347 11.2x 10.8x 10.2x 65% 0.2x 0.2x 288 4.0x 79% -10%600055-CN Beijing Wandong Medical Equipment Co. Ltd. N/C CNY 10.20 323 334 85% 0%600529-CN Shandong Pharmaceutical Glass Co. Ltd. N/C CNY 15.38 580 25.7x 22.1x 19.1x 13% 1.6x 1.4x 611 3.2x 57% 3%002016-CN Guangdong Shirongzhaoye Co. Ltd. N/C CNY 11.36 768 854 209% -5%002223-CN Jiangsu Yuyue Medical Equipment & Supply Co. Ltd N/C CNY 34.40 778 50.1x 35.3x 24.3x 49% 0.7x 0.5x 767 6.8x 115% 0%600587-CN Shinva Medical Instrument Co. Ltd. N/C CNY 16.90 333 317 93% 4%Average of Chinese Medical Device companies 27.2x 21.9x 17.5x 27% 1.1x 0.9x 6.1x 98% 1%U.S. Medical Device companiesBDX-US Becton Dickinson & Co. EW USD 77.91 18,651 15.7x 15.0x 13.9x 6% 2.4x 2.3x 18,420 2.4x 15% -1%ISRG-US Intuitive Surgical Inc. EW USD 308.96 12,173 54.1x 43.2x 37.0x 18% 2.4x 2.1x 11,287 9.2x 139% 2%WAT-US Waters Corp. EW USD 61.21 6,072 17.9x 16.5x 14.9x 8% 2.2x 1.9x 5,863 3.6x 69% -1%BEC-US Beckman Coulter Inc. EW USD 68.53 4,705 17.4x 15.2x 13.6x 11% 1.3x 1.2x 5,849 1.5x 49% 5%RMD-US ResMed Inc. EW USD 52.23 3,765 23.0x 21.1x 17.3x 23% 0.9x 0.7x 3,596 3.3x 39% 0%MIL-US Millipore Corp. EW USD 71.10 3,929 18.0x 16.1x 14.4x 11% 1.4x 1.3x 4,734 2.7x 40% -2%KCI-US Kinetic Concepts Inc. N/C USD 39.58 2,814 10.6x 9.6x 9.1x 21% 0.4x 0.4x 3,900 1.9x 96% 5%HOLX-US Hologic Inc. EW USD 14.97 3,763 13.5x 12.4x 11.3x 3% 4.4x 4.0x 5,471 3.3x 11% 3%IDXX-US IDEXX Laboratories Inc. N/C USD 55.91 3,272 28.6x 25.0x 21.6x 11% 2.2x 1.9x 3,317 3.0x 48% 5%GPRO-US Gen-Probe Inc. EW USD 44.82 2,202 23.2x 19.8x 17.8x 9% 2.2x 2.0x 1,923 3.5x 0% 4%PKI-US PerkinElmer Inc. N/C USD 21.43 2,501 18.1x 16.1x 14.3x 11% 1.4x 1.3x 2,929 1.6x 48% 4%BIO-US Bio-Rad Laboratories Inc. (Cl A) N/C USD 101.05 2,777 20.4x 18.7x 16.0x 25% 0.8x 0.6x 2,898 1.5x 28% 5%EW-US Edwards Lifesciences Corp. EW USD 89.48 4,957 29.3x 24.9x 21.1x 19% 1.3x 1.1x 4,875 3.3x 58% 3%BLUD-US Immucor Inc. N/C USD 20.27 1,422 17.6x 15.8x 15.4x 8% 2.0x 1.9x 1,269 3.5x -24% 0%STE-US STERIS Corp. N/C USD 27.68 1,625 14.1x 13.6x 12.6x 5% 3.0x 2.8x 1,613 1.3x 17% -1%COO-US Cooper Cos. N/C USD 37.95 1,717 17.2x 17.2x 13.3x 26% 0.7x 0.5x 2,484 2.3x 132% 0%HAE-US Haemonetics Corp. EW USD 55.09 1,450 20.0x 17.7x 16.0x 13% 1.4x 1.2x 1,251 1.8x -2% 0%AFFX-US Affymetrix Inc. EW USD 6.91 475 42.5x 453 1.3x 95% 18%VIVO-US Meridian Bioscience Inc. N/C USD 21.71 879 27.1x 23.4x 20.1x 13% 1.8x 1.6x 819 5.5x -15% 1%IART-US Integra LifeSciences Holdings Corp. N/C USD 38.92 1,107 18.7x 16.9x 15.0x 29% 0.6x 0.5x 1,403 1.9x 4% 6%WMGI-US Wright Medical Group Inc. N/C USD 19.14 741 34.1x 26.6x 22.1x 778 1.5x -7% 1%AMMD-US American Medical Systems Holdings Inc. EW USD 20.05 1,486 17.7x 16.6x 14.7x 17% 1.0x 0.9x 1,811 3.3x 115% 4%OFIX-US Orthofix International N.V. N/C USD 31.46 539 22.9x 16.3x 12.8x 781 1.4x 102% 2%THOR-US Thoratec Corp. N/C USD 25.77 1,464 30.9x 22.4x 18.9x 52% 0.4x 0.4x 1,332 3.1x -17% -4%ABAX-US Abaxis Inc. N/C USD 25.62 564 38.9x 29.2x 22.5x 28% 1.0x 0.8x 496 3.4x 59% 0%GIVN-US Given Imaging Ltd. N/C USD 17.16 503 38.3x 30.2x 33.0x 58% 0.5x 0.6x 436 2.8x 111% -2%SMA-US Symmetry Medical Inc. N/C USD 8.85 317 13.6x 14.7x 11.8x 3% 4.6x 3.7x 411 1.2x 1% 10%SONO-US SonoSite Inc. N/C USD 26.10 452 32.9x 23.9x 301 1.2x 24% 10%ICUI-US ICU Medical Inc. N/C USD 37.09 549 21.1x 18.8x 16.7x 10% 1.9x 1.7x 426 1.6x 10% 2%ANGO-US AngioDynamics Inc. N/C USD 16.78 412 35.3x 28.3x 25.0x 18% 1.6x 1.4x 350 1.5x 17% 5%Average of U.S. Medical Device companies 23.5x 21.0x 19.3x 20% 1.5x 1.4x 1,383 2.3x 36% 3%IVD CompaniesBEC-US Beckman Coulter Inc. EW USD 68.53 4,705 17.4x 15.2x 13.6x 11% 1.3x 1.2x 5,849 1.5x 49% 5%IMA-US Inverness Medical Innovations Inc. N/C USD 43.72 3,614 16.9x 14.8x 13.0x 6,017 2.7x 120% 5%HOLX-US Hologic Inc. EW USD 14.97 3,763 13.5x 12.4x 11.3x 3% 4.4x 4.0x 5,471 3.3x 11% 3%IDXX-US IDEXX Laboratories Inc. N/C USD 55.91 3,272 28.6x 25.0x 21.6x 11% 2.2x 1.9x 3,317 3.0x 48% 5%GPRO-US Gen-Probe Inc. EW USD 44.82 2,202 23.2x 19.8x 17.8x 9% 2.2x 2.0x 1,923 3.5x 0% 4%BIO-US Bio-Rad Laboratories Inc. (Cl A) N/C USD 101.05 2,777 20.4x 18.7x 16.0x 25% 0.8x 0.6x 2,898 1.5x 28% 5%BLUD-US Immucor Inc. N/C USD 20.27 1,422 17.6x 15.8x 15.4x 8% 2.0x 1.9x 1,269 3.5x -24% 0%CRA-US Celera Corp. N/C USD 7.28 597 47.3x 449 2.6x -38% 6%VIVO-US Meridian Bioscience Inc. N/C USD 21.71 879 27.1x 23.4x 20.1x 13% 1.8x 1.6x 819 5.5x -15% 1%ABAX-US Abaxis Inc. N/C USD 25.62 564 38.9x 29.2x 22.5x 28% 1.0x 0.8x 496 3.4x 59% 0%GHDX-US Genomic Health Inc. N/C USD 17.55 502 47.9x 444 2.4x 0% -10%QDEL-US Quidel Corp. N/C USD 14.15 426 17.3x 21.2x 23.8x 1% 368 2.8x 5% 3%ORCH-US Orchid Cellmark Inc. N/C USD 1.74 52 35 0.6x 155% 2%HDIX-US Home Diagnostics Inc. N/C USD 6.46 109 20.4x 12.4x 11.3x 4% 3.3x 3.0x 87 0.6x 23% 6%Average of IVD Companies 21.9x 18.9x 21.6x 11% 2.1x 1.9x 2,103 2.6x 30% 2%PricePE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 24 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 34 China Medical Distributors comp sheet Market Cap EPS CAGR EV/SalesTicker Company Name Rating (US$mn) 09E 10E 11E 09E-11E 10E 11E EV 10E 09 YTDChina listed Distribution companies600511-CN China National Medicines Corp. Ltd. N/C CNY 28.00 1,926 53.8x 43.1x 36.4x 24% 1.8x 1.5x 1,989 2.1x 79% 9%600849-CN Shanghai Pharmaceutical Co. Ltd. N/C CNY 13.62 1,132 22.3x 26.2x 21.0x 65% 0.4x 0.3x 1,369 0.3x 94% -3%600713-CN Nanjing Pharmaceutical Co. Ltd. N/C CNY 9.61 417 45.8x 35.6x 26.0x 54% 0.7x 0.5x 661 0.3x 94% -1%600332-CN Guangzhou Pharmaceutical Co. Ltd. UW CNY 10.89 1,124 38.7x 28.5x 22.3x 30% 1.0x 0.8x 1,255 1.9x 93% -4%000028-CN Shenzhen Accord Pharmaceutical Co. Ltd. N/C CNY 26.80 1,137 34.8x 28.9x 26.8x 23% 1.3x 1.2x 1,338 7.6x 69% -3%000591-CN Chongqing Tongjunge Co. Ltd. N/C CNY 10.40 297 354 112% 1%000963-CN Huadong Medicine Co. Ltd. N/C CNY 18.54 1,176 31.6x 26.4x 22.3x 29% 0.9x 0.8x 1,285 1.1x 71% 1%Average of above China listed Distribution companies 37.8x 31.4x 25.8x 37% 1.0x 0.8x 2.2x 87% 0%Hong Kong listed Distribution companies1099-HK Sinopharm Group Co. Ltd. OW HKD 31.00 6,544 65.8x 50.6x 38.7x 31% 1.6x 1.3x 8,901 1.0x 74% 13%874-HK Guangzhou Pharmaceutical Co Ltd OW HKD 6.39 1,124 22.7x 16.7x 13.1x 30% 0.6x 0.4x 630 0.9x 123% 9%Average of above Hong Kong listed Distribution companies 44.3x 33.7x 25.9x 30% 1.1x 0.8x 1.0x 99% 11%US listed Distribution companiesMCK McKesson Corp. N/C USD 60.77 16,286 13.5x 12.8x 11.5x 9% 1.4x 1.3x 15,582 0.1x 61% -3%ABC AmerisourceBergen Corp. N/C USD 26.05 7,500 15.4x 13.5x 12.2x 13% 1.0x 0.9x 7,673 0.1x 46% 0%CAH Cardinal Health Inc. N/C USD 31.60 11,455 12.6x 15.5x 14.3x 12,342 0.1x 30% -2%Average of above US listed Distribution companies 13.8x 13.9x 12.6x 11% 1.2x 1.1x 0.1x 46% -2%JP / EUR listed Distribution companies2784-JP Alfresa Holdings Corp. EW JPY 3795.00 1,698 19.0x 15.3x 13.7x 12% 1.3x 1.2x 1,088 0.0x -14% 3%9987-JP Suzuken Co. Ltd. OW JPY 3100.00 2,989 19.7x 15.4x 14.1x 24% 0.6x 0.6x 2,384 0.1x 14% 2%7459-JP Medipal Holdings Corp. EW JPY 1155.00 2,965 22.8x 15.2x 13.1x 9% 1.8x 1.5x 2,066 0.1x 7% 0%ANZ-DE Andreae-Noris Zahn AG N/C EUR 25.30 387 21.8x 21.8x 17.8x 27% 0.8x 0.7x 713 0.1x 20% 5%GALN-CH Galenica AG N/C CHF 394.00 2,482 10.4x 11.0x 10.5x 10% 1.1x 1.0x 3,223 1.0x 9% 5%OKDBV-FI Oriola-KD Oyj N/C EUR 4.68 1,012 14.9x 13.9x 12.0x 28% 0.5x 0.4x 1,154 0.4x 238% 6%ALAPIS-GR Alapis S.A. N/C EUR 0.57 1,601 4.9x 5.2x 5.1x 36% 0.1x 0.1x 2,312 1.2x 13% 12%Average of above JP / EUR listed Distribution companies 16.2x 14.0x 12.3x 21% 0.9x 0.8x 0.4x 41% 5%EPS CAGR EV/Sales09E 10E 11E 09E-11E 10E 11E 10E 09 YTDChina listed Distribution companies 37.8x 31.4x 25.8x 37% 1.0x 0.8x 2.2x 87% 0%Hong Kong listed Distribution companies 44.3x 33.7x 25.9x 30% 1.1x 0.8x 1.0x 99% 11%US listed Distribution companies 13.8x 13.9x 12.6x 11% 1.2x 1.1x 0.1x 46% -2%JP / EUR listed Distribution companies 16.2x 14.0x 12.3x 21% 0.9x 0.8x 0.4x 41% 5%Offshore Chinese Healthcare companies 22.9x 18.8x 15.7x 18% 1.3x 1.1x 3.2x 86% 5%A-share Chinese Healthcare companies 39.1x 31.1x 27.0x 28% 1.4x 1.2x 5.8x 99% 0%PE PEG PerformancePricePE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 25 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 35 China Retail Drugstores comp sheet Market Cap EPS CAGR EV/SalesTicker Company Name Rating (US$mn) 09E 10E 11E 09E-11E 10E 11E EV 10E 09 YTDChina-based, US-listed Retail DrugstoreNPD-US China Nepstar Chain Drugstore Inc. EW USD 7.37 786 37.7x 26.3x 21.9x 9% 3.1x 2.6x 440 1.2x 44% 1%China-based, US-listed Healthcare companiesMR-US Mindray Medical International Ltd. (ADS) OW USD 36.54 3,921 27.9x 23.1x 17.7x 21% 1.1x 0.8x 3,921 5.3x 88% 8%WX-US WuXi PharmaTech (Cayman) Inc. OW USD 17.66 1,126 21.5x 19.0x 15.4x 8% 2.4x 2.0x 1,171 3.5x 100% 11%CMED-US China Medical Technologies Inc. (ADS) EW USD 15.16 415 6.8x 6.0x 5.0x 4% 1.4x 1.1x 721 4.4x -31% 8%AOB-US American Oriental Bioengineering Inc. N/C USD 4.69 367 8.4x 7.7x 7.4x 0% 381 1.1x -32% 1%SCR-US Simcere Pharmaceutical Group (ADS) UW USD 9.64 600 19.4x 19.0x 20.4x 587 1.9x 29% 4%BJGP-US BMP Sunstone Corp. N/C USD 5.74 239 49.9x 259 1.5x 2% 1%TCM-US Tongjitang Chinese Medicines Co. (ADS) N/C USD 3.71 119 53.0x 46.4x 88 1.1x 27% -2%SSRX-US 3SBio Inc. (ADS) OW USD 13.20 284 22.9x 20.6x 17.0x 39% 0.5x 0.4x 177 3.1x 76% -4%SVA-US Sinovac Biotech Ltd. N/C USD 6.67 284 11.9x 12.6x 12.9x 39% 0.3x 0.3x 278 2.8x 359% 5%TBV-US Tiens Biotech Group (USA) Inc. N/C USD 3.05 218 9.0x 12.8x 13.4x 197 3.8x 53% 2%CHDX-US Chindex International Inc. N/C USD 14.34 212 22.6x 18.5x 164 0.7x 78% 1%KUN-US China Shenghuo Pharmaceutical Holdings Inc. N/C USD 0.78 15 28 95% 0%Average of above China-based, US-listed Healthcare companies 20.3x 18.6x 17.7x 19% 1.1x 0.9x 2.7x 70% 3%China-based, US-listed Retail companiesGSUNY-US GLORIOUS SUN ENTERPRISES LT SPONSORE N/C USD 3.79 402 313 51% 2%ATV-US Acorn International Inc. (ADS) N/C USD 5.79 181 17.0x 14.8x 13.5x 2 0.0x 21% 22%QKLS-US QKL Stores Inc. N/C USD 6.84 143 19.5x 15.2x 11.0x 29% 0.5x 0.4x 127 0.3x 106% 2%Average of above China-based, US-listed Retail companies 18.3x 15.0x 12.2x 29% 0.5x 0.4x 0.2x 64% 12%US-listed DrugstoresCVS-US CVS Caremark Corp. OW USD 34.00 49,432 13.0x 12.1x 11.1x 8% 1.6x 1.4x 58,783 0.6x 12% 6%WAG-US Walgreen Co. EW USD 36.99 36,637 17.6x 15.7x 13.4x 10% 1.6x 1.4x 35,641 0.5x 49% 1%SC-CA Shoppers Drug Mart Corp. EW CAD 45.01 9,228 16.8x 15.3x 13.6x 9% 1.7x 1.5x 10,870 1.0x -5% -1%PJC.A-CA Jean Coutu Group (PJC) Inc. (Cl A) N/C CAD 10.05 2,295 15.3x 14.0x 13.3x 2,530 0.9x 17% 4%KND-US Kindred Healthcare Inc. N/C USD 18.05 705 12.1x 14.2x 12.5x 745 0.2x 42% -2%RAD-US Rite Aid Corp. UW USD 1.63 1,371 953 0.0x 387% 8%PMC-US Pharmerica Corp. N/C USD 17.57 538 13.7x 13.1x 12.0x 704 0.4x 1% 11%DSCM-US inc. EW USD 3.21 311 288 0.7x 149% 4%Average of above US-listed Drugstores 14.8x 14.1x 12.7x 9% 1.6x 1.4x 0.5x 81% 4%China healthcare companies with drugstore presence600739-CN Liaoning Cheng Da Co. Ltd. N/C CNY 41.90 5,031 29.6x 20.4x 5,613 213% 10%600664-CN Harbin Pharmaceutical Group Co. Ltd. N/C CNY 17.88 3,234 23.1x 19.9x 3,114 65% -3%600196-CN Shanghai Fosun Pharmaceutical (Group) Co. Ltd. N/C CNY 20.70 3,644 31.0x 25.5x 21.2x 20% 1.3x 1.0x 4,071 6.5x 84% 6%600085-CN Beijing Tongrentang Co. Ltd. N/C CNY 20.80 1,568 36.0x 32.9x 28.7x 13% 2.5x 2.2x 1,505 2.9x 71% -1%600511-CN China National Medicines Corp. Ltd. N/C CNY 28.00 1,926 53.8x 43.1x 36.4x 24% 1.8x 1.5x 1,989 2.1x 79% 9%600849-CN Shanghai Pharmaceutical Co. Ltd. N/C CNY 13.62 1,132 22.3x 26.2x 21.0x 65% 0.4x 0.3x 1,369 0.3x 94% -3%000597-CN Northeast Pharmaceutical Group Co. Ltd. N/C CNY 26.19 1,269 1,384 116% -1%600129-CN Chongqing Taiji Industry (Group) Co. Ltd. N/C CNY 12.39 594 910 142% -4%000591-CN Chongqing Tongjunge Co. Ltd. N/C CNY 10.40 297 354 112% 1%Average of above China healthcare companies with drugstore presence 32.7x 28.0x 26.8x 31% 1.5x 1.3x 3.0x 109% 2%China Retail company with store presence493-HK GOME Electrical Appliances Holding Ltd. N/C HKD 2.95 5,392 29.0x 22.2x 18.0x 25% 0.9x 0.7x 5,726 0.8x 180% 5%3368-HK Parkson Retail Group Ltd. OW HKD 14.50 5,211 37.3x 29.1x 23.4x 22% 1.3x 1.0x 5,288 8.3x 55% 6%D01-SG Dairy Farm International Holdings Ltd. N/C USD 6.02 8,085 21.1x 18.2x 17.0x 13% 1.4x 1.3x 8,186 1.0x 40% 1%1212-HK Lifestyle International Holdings Ltd. N/C HKD 15.10 3,236 26.4x 23.2x 20.4x 11% 2.2x 1.9x 3,411 6.4x 85% 4%600631-CN Shanghai Bailian Group Co. Ltd. N/C CNY 18.18 2,925 48.5x 42.2x 37.1x 15% 2.8x 2.4x 3,304 2.0x 112% 1%1833-HK Intime Department Store (Group) Co. Ltd. OW HKD 7.56 1,749 37.7x 30.5x 23.8x 14% 2.2x 1.7x 1,865 6.0x 244% 5%600694-CN Dashang Group Co. Ltd. N/C CNY 42.49 1,828 63.6x 67.4x 1,760 0.5x 144% -3%3308-HK Golden Eagle Retail Group Ltd. OW HKD 14.86 3,473 36.2x 27.0x 21.1x 33% 0.8x 0.6x 3,590 9.8x 191% -6%000501-CN Wuhan Department Store Group Co. Ltd. N/C CNY 13.90 1,033 29.8x 27.3x 23.4x 18% 1.5x 1.3x 1,060 0.8x 196% -6%8277-HK Wumart Stores Inc. N/C HKD 13.24 2,083 33.4x 27.1x 21.9x 10% 2.7x 2.2x 2,136 1.1x 113% 8%600827-CN Shanghai Friendship Group Inc. Co. N/C CNY 19.06 1,322 692 121% 2%980-HK Lianhua Supermarket Holdings Co. Ltd. N/C HKD 23.50 1,885 28.7x 22.7x 17.7x 24% 1.0x 0.7x 1,068 0.3x 143% 0%1832-HK Times Ltd. N/C HKD 5.50 620 30.3x 25.5x 634 0.8x 171% -1%814-HK Beijing Jingkelong Co. Ltd. N/C HKD 6.48 344 15.2x 13.0x 11.2x 10% 1.3x 1.1x 518 0.5x 134% 3%8052-HK Convenience Retail Asia Ltd. N/C HKD 2.00 188 188 6% 0%Average of above China Retail company with store presence 31.1x 28.6x 25.2x 18% 1.6x 1.4x 2.9x 129% 1%PricePE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 26 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 36 China Traditional Chinese Medicine (TCM) comp sheet Market Cap EPS CAGR EV/SalesTicker Company Name Rating (US$mn) 09E 10E 11E 09E-11E 10E 11E EV 10E 09 YTDChina listed TCM companies000623-CN Jilin Aodong Medicine Industry (Groups) Co. Ltd. N/C CNY 54.11 4,131 23.2x 18.3x 4,453 163% 10%000538-CN Yunnan Baiyao Group Co. Ltd. EW CNY 56.93 4,453 51.9x 32.7x 25.9x 32% 1.0x 0.8x 4,161 3.1x 76% -6%000423-CN Shandong Dong-E E-Jiao Co. Ltd. N/C CNY 24.91 2,380 44.7x 36.2x 28.7x 17% 2.2x 1.7x 2,153 6.0x 94% -5%600085-CN Beijing Tongrentang Co. Ltd. N/C CNY 20.80 1,568 36.0x 32.9x 28.7x 13% 2.5x 2.2x 1,505 2.9x 71% -1%600332-CN Guangzhou Pharmaceutical Co. Ltd. UW CNY 10.89 1,124 38.7x 28.5x 22.3x 30% 1.0x 0.8x 1,255 1.9x 93% -4%600535-CN Tianjin Tasly Pharmaceutical Co. Ltd. N/C CNY 23.19 1,652 35.0x 27.8x 21.9x 26% 1.1x 0.8x 1,817 2.5x 81% 4%600750-CN Jiangzhong Pharmaceutical Co. Ltd. N/C CNY 23.70 1,027 43.1x 34.3x 28.6x 23% 1.5x 1.2x 1,044 3.4x 108% 2%600557-CN Jiangsu Kanion Pharmaceutical Co. Ltd. N/C CNY 21.28 988 39.7x 32.1x 25.8x 23% 1.4x 1.1x 989 6.2x 47% 2%600129-CN Chongqing Taiji Industry (Group) Co. Ltd. N/C CNY 12.39 594 910 142% -4%000989-CN Jiuzhitang Co. Ltd. N/C CNY 13.53 583 481 81% -5%600530-CN Shanghai Jiaoda Onlly Co. Ltd. N/C CNY 10.08 448 474 199% -1%600869-CN S&P Pharmaceutical Co. Ltd. N/C CNY 16.60 292 296 139% -6%600211-CN Tibet Rhodiola Pharmaceutical Holding Co. Ltd. N/C CNY 14.88 295 307 154% 2%002118-CN Jilin Zixin Pharmaceutical Industrial Co. Ltd. N/C CNY 21.08 372 394 44% 7%002107-CN Shandong Wohua Pharmaceutical Co. Ltd. N/C CNY 23.82 572 528 81% -3%000591-CN Chongqing Tongjunge Co. Ltd. N/C CNY 10.40 297 354 112% 1%600976-CN Wuhan Jianmin Pharmaceutical Groups Co. Ltd. N/C CNY 14.36 322 302 219% -4%Average of above China listed TCM companies 39.0x 30.4x 26.0x 23% 1.5x 1.2x 1,260 3.7x 112% -1%Hong Kong listed TCM companies874-HK Guangzhou Pharmaceutical Co Ltd OW HKD 6.39 1,124 22.7x 16.7x 13.1x 30% 0.6x 0.4x 630 0.9x 123% 9%2877-HK China Shineway Pharmaceutical Group Ltd. N/C HKD 14.92 1,591 16.4x 15.2x 12.9x 29% 0.5x 0.4x 1,288 4.7x 233% 3%82-HK VODone Ltd. N/C HKD 2.03 513 566 43.4x 1012% 13%8069-HK Tong Ren Tang Technologies Co. Ltd. N/C HKD 14.26 360 13.8x 12.4x 11.4x 10% 1.2x 1.1x 360 1.7x 122% 2%587-HK Hua Han Bio-Pharmaceutical Holdings Ltd. N/C HKD 2.34 399 16.8x 16.8x 348 2.6x 259% 22%329-HK Ruyan Group (Holdings) Ltd. N/C HKD 0.19 37 49 24% 4%239-HK Pak Fah Yeow International Ltd. N/C HKD 1.60 54 53 73% 3%8019-HK Everpride Biopharmaceutical Co. Ltd. N/C HKD 0.23 21 25 318% -1%8221-HK Lees Pharmaceutical Holdings Ltd. N/C HKD 1.97 114 112 278% 17%8037-HK Longlife Group Holdings Ltd. N/C HKD 0.25 17 20 1.0x 13% -7%Average of above Hong Kong listed TCM companies 17.4x 15.3x 12.5x 23% 0.8x 0.7x 9.1x 246% 6%US listed TCM companiesTCM Tongjitang Chinese Medicines Co. (ADS) N/C USD 3.71 119 53.0x 46.4x 88 1.1x 27% -2%AOB American Oriental Bioengineering Inc. N/C USD 4.69 367 8.4x 7.7x 7.4x 0% 381 1.1x -32% 1%TBV Tiens Biotech Group (USA) Inc. N/C USD 3.05 218 9.0x 12.8x 13.4x 197 3.8x 53% 2%CAXG China Aoxing Pharmaceutical Co. Inc. N/C USD 0.99 91 99 11.1x -5% -1%SYUP Shanghai Yutong Pharma Inc. N/C USD 0.04 4 -91% 0%BPMA Benda Pharmaceutical Inc. N/C USD 0.03 3 4 -25% 0%Average of above US listed TCM companies 23.5x 22.3x 10.4x 0% 4.3x -12% 0%PricePE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 27 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Complete List of Chinese Healthcare Companies Exhibit 37 China Listed Biotech Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD002007-CN N/C Hualan Biological Engineering Inc. Biotech CNY 55.5 2925 103 138 154 54.5x 43.1x 46.6x 31% 1.4x 1.5x 2905 21.0x 130% 0%600161-CN N/C Beijing Tiantan Biological Products Co. Ltd. Biotech CNY 24.94 1783 121 138 134 68.3x 61.6x 59.4x 15% 4.0x 3.9x 1813 13.1x 83% -6%002038-CN N/C Beijing SL Pharmaceutical Co. Ltd. Biotech CNY 45.59 1665 60 77 99 45.4x 36.3x 28.9x 22% 1.7x 1.3x 1617 20.9x 21% 3%000078-CN N/C Shenzhen Neptunus Bioengineering Co. Ltd. Biotech CNY 15.93 1515 1697 446% -6%600866-CN N/C Guangdong Zhaoqing Starlake Bioscience Co. InBiotech CNY 13.99 980 1078 277% 9%002252-CN N/C Shanghai RAAS Blood Products Co. Ltd. Biotech CNY 36.7 860 53 64 79 44.5x 37.3x 30.4x 18% 2.1x 1.7x 802 12.4x 47% -1%000990-CN N/C Chengzhi Co. Ltd. Biotech CNY 17.71 726 870 192% 2%002100-CN N/C Xinjiang Tecon Animal Husbandry Bio-TechnologBiotech CNY 23.81 575 615 150% 7%002030-CN N/C Da An Gene Co. Ltd. of Sun Yat-Sen University Biotech CNY 15.35 540 557 161% -4%000661-CN N/C Changchun High & New Technology Industries (Biotech CNY 27.85 523 582 194% 4%600645-CN N/C Zhongyuan Union Stem Cell Bioengineering Co.Biotech CNY 7.51 358 338 93% 0%600538-CN N/C Beihai Gofar Marine Biological Industry Co. Ltd. Biotech CNY 7.83 319 406 175% -3%600556-CN N/C Guangxi Beisheng Pharmaceutical Co. Ltd. Biotech CNY 4.09 182 276 34%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 38 China Listed Chemical Drug Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD600276-CN OW Jiangsu Hengrui Medicine Co. Ltd. Chemical CNY 49.3 4482 433 534 642 46.1x 35.2x 28.2x 37% 1.0x 0.8x 4372 8.4x 64% -6%600196-CN N/C Shanghai Fosun Pharmaceutical (Group) Co. LtdChemical CNY 20.7 3644 562 623 707 31.0x 25.5x 21.2x 20% 1.3x 1.0x 4071 6.5x 84% 6%600664-CN N/C Harbin Pharmaceutical Group Co. Ltd. Chemical CNY 17.88 3234 23.1x 19.9x 3114 65% -3%000999-CN N/C Sanjiu Medical & Pharmaceutical Co. Ltd. Chemical CNY 20.05 2866 675 770 880 30.6x 25.1x 19.5x 26% 1.0x 0.7x 2790 3.6x 38% 0%002001-CN N/C Zhejiang NHU Co. Ltd. Chemical CNY 47.32 2339 384 455 498 16.0x 12.9x 13.0x 2456 5.4x 99% -3%600216-CN N/C Zhejiang Medicine Co. Ltd. Chemical CNY 34.65 2247 582 677 14.8x 12.2x 10.7x 14% 0.9x 0.7x 2272 3.4x 153% -3%600062-CN N/C Beijing Double-Crane Pharmaceutical Co. Ltd. Chemical CNY 22.91 1923 782 843 917 27.3x 21.8x 18.2x 16% 1.3x 1.1x 1854 2.2x 17% -3%600380-CN N/C Joincare Pharmaceutical Group Industry Co. LtdChemical CNY 11.46 1883 2014 157% -2%600812-CN N/C North China Pharmaceutical Co. Ltd. Chemical CNY 11.9 1782 37.2x 27.0x 2175 93% 2%000513-CN N/C Livzon Pharmaceutical Group Inc. Chemical CNY 39.51 1713 1688 128% 0%600267-CN N/C Zhejiang Hisun Pharmaceutical Co. Ltd. Chemical CNY 23.46 1544 572 660 734 37.3x 29.0x 24.2x 31% 0.9x 0.8x 1958 3.0x 62% -3%000597-CN N/C Northeast Pharmaceutical Group Co. Ltd. Chemical CNY 26.19 1269 1384 116% -1%600521-CN N/C Zhejiang Huahai Pharmaceutical Co. Ltd. Chemical CNY 27.98 1200 150 188 233 48.2x 36.8x 30.7x 22% 1.7x 1.4x 1248 6.6x 114% 8%002294-CN N/C Shenzhen Salubris Pharmaceuticals Co. Ltd. Chemical CNY 89.6 1173 1318 1%600607-CN N/C Shanghai Industrial Pharmaceutical Investment CChemical CNY 22 1171 1051 88% -2%600829-CN N/C Harbin Pharm. Group Sanjing Pharmaceutical S Chemical CNY 18.69 1069 1056 19% -4%000522-CN N/C Guangzhou Baiyunshan Pharmaceutical Co. Ltd Chemical CNY 12.6 868 410 451 496 66.3x 46.7x 38.2x 27% 1.8x 1.4x 1024 2.3x 178% -6%002004-CN N/C Chongqing Huapont Pharmaceutical Co. Ltd. Chemical CNY 41.81 818 96 110 125 49.8x 45.9x 36.4x 20% 2.4x 1.9x 819 7.4x 237% -6%200513-CN N/C Livzon Pharmaceutical Inc B HKD Chemical HKD 19.7 818 802 113% 2%600488-CN N/C Tianjin Tianyao Pharmaceutical Co. Ltd. Chemical CNY 9.32 747 851 69% -2%000627-CN N/C Hubei Biocause Pharmaceutical Co. Ltd. Chemical CNY 7.54 745 815 130% 1%600420-CN N/C Shanghai Modern Pharmaceutical Co. Ltd. Chemical CNY 14.6 618 605 140% 4%000518-CN N/C Jiangsu Sihuan Bioengineering Co. Ltd. Chemical CNY 4.03 611 603 91% -2%000788-CN N/C PKU International Healthcare Group Southwest Chemical CNY 17.78 603 732 213% 16%600572-CN N/C Zhejiang Conba Pharmaceutical Co. Ltd. Chemical CNY 12.39 580 628 130% 0%600789-CN N/C Shandong Lukang Pharmaceutical Co. Ltd. Chemical CNY 6.66 566 626 101% -2%000756-CN N/C Shandong Xinhua Pharmaceutical Co. Ltd. Chemical CNY 8.45 552 310 339 357 48.9x 45.8x 40.0x 47% 1.0x 0.9x 567 1.7x 122% -1%000952-CN N/C Hubei Guangji Pharmaceutical Co. Ltd. Chemical CNY 14.51 532 550 79% 1%002262-CN N/C Jiangsu Nhwa Pharmaceutical Co. Ltd. Chemical CNY 20 529 161 191 233 58.9x 43.5x 32.3x 33% 1.3x 1.0x 532 2.8x 71% 7%000566-CN N/C Hainan Haiyao Co. Ltd. Chemical CNY 16.4 515 105 168 246 32.8x 28.3x 17.8x 65% 0.4x 0.3x 545 3.2x 87% 5%600253-CN N/C Henan Topfond Pharmaceutical Co. Ltd. Chemical CNY 7.99 503 635 131% -5%600297-CN N/C Merro Pharmaceutical Co. Ltd. Chemical CNY 8.95 458 509 210% -3%600842-CN N/C Shanghai Zhongxi Pharmaceutical Co. Ltd. Chemical CNY 12.89 410 432 91% -6%600285-CN N/C Henan Lingrui Pharmaceutical Co. Ltd. Chemical CNY 11.65 340 358 101% -4%600666-CN N/C Southwest Pharmaceutical Co. Ltd. Chemical CNY 11.3 320 334 131% -3%002099-CN N/C Zhejiang Hisoar Pharmaceutical Co. Ltd. Chemical CNY 12.78 303 333 91% 8%000153-CN N/C Anhui Fengyuan Pharmaceutical Co. Ltd. Chemical CNY 7.33 278 308 125% -3%600466-CN N/C Sichuan Dikang Sci & Tech Pharmaceutical Indu Chemical CNY 10.69 273 252 190% 0%000790-CN N/C Chengdu Huasun Group Inc. Ltd. Chemical CNY 9 265 279 55% -2%600080-CN N/C Ginwa Enterprise (Group) Inc. Chemical CNY 6.01 263 319 157% 1%000545-CN N/C Jilin Pharmaceutical Co. Ltd. Chemical CNY 10.65 247 256 65%600421-CN N/C Wuhan National Pharmaceutical Technology Co Chemical CNY 8.44 243 245 244% -6%600771-CN N/C Topsun Science & Technology Co. Ltd. Chemical CNY 6.74 243 381 136% 1%000590-CN N/C Unisplendour Guhan Group Co. Ltd. Chemical CNY 7.56 225 240 59% -2%600671-CN N/C Hangzhou Tian-Mu-Shan Pharmaceutical EnterpChemical CNY 11.52 208 214 141% -5%000705-CN N/C Zhejiang Zhenyuan Share Co. Ltd. Chemical CNY 9.73 180 189 97% -1%600513-CN N/C Jiangsu Lianhuan Pharmaceutical Co. Ltd. Chemical CNY 13.29 175 170 129% -5%002020-CN N/C Zhejiang Jingxin Pharmaceutical Co. Ltd. Chemical CNY 10.91 165 207 92% 3%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 E = Morgan Stanley Research estimates and Factset for N/C (non-covered) stocks 28 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 39 China Listed Medical Device Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD002022-CN N/C Shanghai Kehua Bio-Engineering Co. Ltd. Device CNY 20.65 1240 90 113 143 41.5x 33.0x 26.1x 25% 1.3x 1.0x 1192 10.5x 22% -6%002223-CN N/C Jiangsu Yuyue Medical Equipment & Supply Co.Device CNY 34.4 778 87 113 145 50.1x 35.3x 24.3x 49% 0.7x 0.5x 767 6.8x 115% 0%600587-CN N/C Shinva Medical Instrument Co. Ltd. Device CNY 16.9 333 317 93% 4%600055-CN N/C Beijing Wandong Medical Equipment Co. Ltd. Device CNY 10.2 323 334 85% 0%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 40 China Listed Medical Distributors Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD600511-CN N/C China National Medicines Corp. Ltd. Distributors CNY 28 1926 788 964 1160 53.8x 43.1x 36.4x 24% 1.8x 1.5x 1989 2.1x 79% 9%000963-CN N/C Huadong Medicine Co. Ltd. Distributors CNY 18.54 1176 1028 1167 1338 31.6x 26.4x 22.3x 29% 0.9x 0.8x 1285 1.1x 71% 1%000028-CN N/C Shenzhen Accord Pharmaceutical Co. Ltd. Distributors CNY 26.8 1137 147 177 34.8x 28.9x 26.8x 23% 1.3x 1.2x 1338 7.6x 69% -3%600849-CN N/C Shanghai Pharmaceutical Co. Ltd. Distributors CNY 13.62 1132 4378 4854 5560 22.3x 26.2x 21.0x 65% 0.4x 0.3x 1369 0.3x 94% -3%200028-CN N/C Shenzhen Accord Pharmaceutical (B) Distributors HKD 19.18 698 147 177 21.6x 17.9x 16.6x 23% 0.8x 0.7x 919 5.2x 194% 6%600713-CN N/C Nanjing Pharmaceutical Co. Ltd. Distributors CNY 9.61 417 1910 2279 2721 45.8x 35.6x 26.0x 54% 0.7x 0.5x 661 0.3x 94% -1%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 41 China Listed Drugstores Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD600739-CN N/C Liaoning Cheng Da Co. Ltd. Drugstores CNY 41.9 5031 29.6x 20.4x 5613 213% 10%600129-CN N/C Chongqing Taiji Industry (Group) Co. Ltd. Drugstores CNY 12.39 594 910 142% -4%000591-CN N/C Chongqing Tongjunge Co. Ltd. Drugstores CNY 10.4 297 354 112% 1%600833-CN N/C Shanghai No. 1 Pharmacy Co. Ltd. Drugstores CNY 11 256 237 119% -2%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 42 China Listed TCM Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD000538-CN EW Yunnan Baiyao Group Co. Ltd. TCM CNY 56.93 4453 1055 1323 1626 51.9x 32.7x 25.9x 32% 1.0x 0.8x 4161 3.1x 76% -6%000623-CN N/C Jilin Aodong Medicine Industry (Groups) Co. LtdTCM CNY 54.11 4131 23.2x 18.3x 4453 163% 10%600518-CN N/C Kangmei Pharmaceutical Co. Ltd. TCM CNY 10.26 2526 334 427 18.3x 13.5x 2407 5.6x 133% -3%000423-CN N/C Shandong Dong-E E-Jiao Co. Ltd. TCM CNY 24.91 2380 302 358 425 44.7x 36.2x 28.7x 17% 2.2x 1.7x 2153 6.0x 94% -5%002275-CN N/C Guilin Sanjin Pharmaceutical Co. Ltd. TCM CNY 27.86 1713 162 184 211 39.8x 34.4x 29.3x 12% 2.8x 2.4x 1703 9.3x -1%600535-CN N/C Tianjin Tasly Pharmaceutical Co. Ltd. TCM CNY 23.19 1652 597 720 867 35.0x 27.8x 21.9x 26% 1.1x 0.8x 1817 2.5x 81% 4%600085-CN N/C Beijing Tongrentang Co. Ltd. TCM CNY 20.8 1568 474 514 565 36.0x 32.9x 28.7x 13% 2.5x 2.2x 1505 2.9x 71% -1%002287-CN N/C Tibet Cheezheng Tibetan Medicine Co. Ltd. TCM CNY 23.77 1247 73 89 109 63.4x 52.8x 49.7x 11% 4.8x 4.5x 1384 15.5x -2%600329-CN N/C Tianjin Zhongxin Pharmaceutical Group Corp. LtTCM CNY 22.93 1236 417 470 28.3x 24.9x 1380 2.9x 142% 6%600332-CN UW Guangzhou Pharmaceutical Co. Ltd. TCM CNY 10.89 1124 569 654 727 38.7x 28.5x 22.3x 30% 1.0x 0.8x 1255 1.9x 93% -4%600750-CN N/C Jiangzhong Pharmaceutical Co. Ltd. TCM CNY 23.7 1027 252 305 364 43.1x 34.3x 28.6x 23% 1.5x 1.2x 1044 3.4x 108% 2%600557-CN N/C Jiangsu Kanion Pharmaceutical Co. Ltd. TCM CNY 21.28 988 137 159 186 39.7x 32.1x 25.8x 23% 1.4x 1.1x 989 6.2x 47% 2%600993-CN N/C MaYinglong Pharmaceutical Group Co. Ltd. TCM CNY 38.51 916 184 241 310 48.2x 30.1x 22.3x 53% 0.6x 0.4x 867 3.6x 185% 0%600867-CN N/C Tonghua Dongbao Pharmaceutical Co. Ltd. TCM CNY 12.98 911 49.9x 32.4x 995 23% -2%000919-CN N/C Jinling Pharmaceutical Co. Ltd. TCM CNY 11.77 871 767 138% -3%600479-CN N/C Zhuzhou Qianjin Pharmaceutical Co. Ltd. TCM CNY 25.41 815 144 173 206 45.3x 37.3x 31.3x 11% 3.5x 2.9x 743 4.3x 66% -5%600436-CN N/C Zhangzhou Pientzehuang Pharmaceutical Co. L TCM CNY 39.15 803 41.2x 35.9x 814 108% 0%600351-CN N/C Yabao Pharmaceutical Group Co. Ltd. TCM CNY 17.31 800 223 268 323 37.8x 27.9x 22.3x 39% 0.7x 0.6x 824 3.1x 168% 4%002219-CN N/C Gansu Duyiwei Biological Pharmaceutical Co. LtdTCM CNY 23.77 655 644 177% -4%600594-CN N/C Guizhou Yibai Pharmaceutical Co. Ltd. TCM CNY 17.25 594 192 232 285 30.8x 23.3x 17.2x 34% 0.7x 0.5x 613 2.6x 141% -4%000766-CN N/C Tonghua Golden-Horse Pharmaceutical IndustryTCM CNY 8.91 585 586 200% -2%000989-CN N/C Jiuzhitang Co. Ltd. TCM CNY 13.53 583 481 81% -5%002107-CN N/C Shandong Wohua Pharmaceutical Co. Ltd. TCM CNY 23.82 572 528 81% -3%600422-CN N/C Kunming Pharmaceutical Corp. TCM CNY 10.4 480 505 140% -2%600222-CN N/C Henan Taloph Pharmaceutical Stock Co. Ltd. TCM CNY 9.32 432 466 186% -5%002118-CN N/C Jilin Zixin Pharmaceutical Industrial Co. Ltd. TCM CNY 21.08 372 394 44% 7%600976-CN N/C Wuhan Jianmin Pharmaceutical Groups Co. Ltd.TCM CNY 14.36 322 302 219% -4%600773-CN N/C Along Tibet Co. Ltd. PLC TCM CNY 8.95 304 301 194% -2%600211-CN N/C Tibet Rhodiola Pharmaceutical Holding Co. Ltd. TCM CNY 14.88 295 307 154% 2%600869-CN N/C S&P Pharmaceutical Co. Ltd. TCM CNY 16.6 292 296 139% -6%002198-CN N/C Guangdong Jiaying Pharmaceutical Co. Ltd. TCM CNY 23.37 278 274 130% 6%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 29 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 43 HK Listed Biotech Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD809-HK N/C Global Bio-Chem Technology Group Co. Ltd. Biotech HKD 2.38 712 1030 1308 1488 31.2x 9.2x 8.1x 3% 3.1x 2.7x 1351 1.0x 54% 25%775-HK N/C CK Life Sciences International (Holdings) Inc. Biotech HKD 0.48 595 666 88% 5%399-HK N/C United Gene High-Tech Group Ltd. Biotech HKD 0.62 486 48 48 4.8x 4.8x 477 9.9x 68% -10%8329-HK N/C Shenzhen Neptunus Interlong Bio-Technique C Biotech HKD 1.36 166 166 111% -8%8221-HK N/C Lees Pharmaceutical Holdings Ltd. Biotech HKD 1.97 114 112 278% 17%8231-HK N/C Shanghai Fudan-Zhangjiang Bio-Pharmaceutica Biotech HKD 0.96 88 88 207% 12%690-HK N/C Uni-Bio Science Group Ltd. Biotech HKD 0.445 75 72 173% -2%8189-HK N/C Tianjin TEDA Biomedical Engineering Co. Ltd. Biotech HKD 0.495 61 61 120%1164-HK N/C Vital Pharmaceutical Holdings Ltd. Biotech HKD 0.192 38 16 11% 5%8151-HK N/C Essex Bio-Technology Ltd. Biotech HKD 0.31 22 22 20% 17%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 44 HK Listed Chemical Drug Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD1177-HK N/C Sino Biopharmaceutical Ltd. Chemical HKD 2.4 2102 430 547 655 28.0x 22.0x 18.0x 45% 0.5x 0.4x 1929 3.5x 369% -2%1093-HK EW China Pharmaceutical Group Ltd. Chemical HKD 4.48 888 923 961 1001 7.4x 9.6x 14.9x 887 1.0x 58% 4%3933-HK EW United Laboratories International Holdings Ltd. Chemical HKD 4.27 661 572 592 630 11.8x 9.6x 8.0x 14% 0.7x 0.6x 878 1.4x 101% 4%8058-HK N/C Shandong Luoxin Pharmacy Stock Co. Ltd. Chemical HKD 7.15 562 562 181% 15%587-HK N/C Hua Han Bio-Pharmaceutical Holdings Ltd. Chemical HKD 2.34 399 132 132 16.8x 16.8x 348 2.6x 259% 22%858-HK N/C Extrawell Pharmaceutical Holdings Ltd. Chemical HKD 1.24 366 26 28 139 62.0x 53.9x 12.8x 384 13.9x -28% -12%2005-HK N/C Lijun International Pharmaceutical Holding Co. L Chemical HKD 1.33 348 226 249 270 14.2x 12.7x 11.2x 33% 0.4x 0.3x 426 1.7x 119% 6%1889-HK N/C Wuyi International Pharmaceutical Co. Ltd. Chemical HKD 0.79 174 88 105 118 7.6x 5.9x 5.2x 3% 1.9x 1.6x 23 0.2x 10% 1%570-HK N/C Winteam Pharmaceutical Group Ltd. Chemical HKD 0.75 157 174 97%2348-HK N/C Dawnrays Pharmaceutical Holdings Ltd. Chemical HKD 1.39 140 132 79% 11%2898-HK N/C Longrun Tea Group Co. Ltd. Chemical HKD 0.86 126 128 102% 1%512-HK N/C China Grand Pharmaceutical & Healthcare Hold Chemical HKD 0.68 94 136 225% 5%2327-HK N/C Jiwa Bio-Pharm Holdings Ltd. Chemical HKD 0.4 83 100 198% 7%8225-HK N/C Venturepharm Laboratories Ltd. Chemical HKD 0.78 36 37 108%1149-HK N/C Broad Intelligence International Pharmaceutical HChemical HKD 0.6 36 83 19% -3%8049-HK N/C Jilin Province Huinan Changlong Bio-pharmacy CChemical HKD 0.38 27 27 85% 3%897-HK N/C Wai Yuen Tong Medicine Holdings Ltd. Chemical HKD 0.085 26 66 -38% -4%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 45 HK Listed Medical Device Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD8199-HK EW Shandong Weigao Group Medical Polymer Co. LDevice HKD 26.1 3360 280 375 480 43.1x 34.4x 27.4x 25% 1.4x 1.1x 3623 9.8x 120% 1%233-HK EW Mingyuan Medicare Development Co. Ltd. Device HKD 1.42 536 55 68 78 25.7x 21.4x 18.9x 14% 1.5x 1.3x 641 9.3x 192% 7%801-HK N/C Golden Meditech Co. Ltd. Device HKD 1.69 347 68 71 74 11.2x 10.8x 10.2x 65% 0.2x 0.2x 288 4.0x 79% -10%8247-HK N/C Biosino Bio-Technology & Science Inc. Device HKD 2.62 34 34 71% -5%8186-HK N/C China Asean Resources Ltd. Device HKD 0.12 29 29 75% 1%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 46 HK Listed Medical Distributors Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD1099-HK OW Sinopharm Group Co. Ltd. Distributors HKD 31 6544 6761 9134 12097 65.8x 50.6x 38.7x 31% 1.6x 1.3x 8901 1.0x 74% 13%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 47 HK Listed Hospital / Services Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD593-HK N/C Quality HealthCare Asia Ltd. Hospital/Servi HKD 3.94 116 143 146 149 13.2x 12.4x 12.0x 7% 1.9x 1.8x 88 0.6x 87% 1%397-HK N/C Hong Kong Health Check & Laboratory HoldingsHospital/Servi HKD 0.63 60 15 -5% 2%8143-HK N/C Hua Xia Healthcare Holdings Ltd. Hospital/Servi HKD 0.082 48 41 243% 5%3886-HK N/C Town Health International Holdings Co. Ltd. Hospital/Servi HKD 1.17 47 27 -35%673-HK N/C China HealthCare Holdings Ltd. Hospital/Servi HKD 0.495 15 37 153% 9%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 30 MORGAN STANLEY RESEARCH January 14, 2010 China Healthcare Valuation Map Exhibit 48 HK Listed TCM Companies Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTD2877-HK N/C China Shineway Pharmaceutical Group Ltd. TCM HKD 14.92 1591 224 274 329 16.4x 15.2x 12.9x 29% 0.5x 0.4x 1288 4.7x 233% 3%874-HK OW Guangzhou Pharmaceutical Co Ltd TCM HKD 6.39 1124 569 654 727 22.7x 16.7x 13.1x 30% 0.6x 0.4x 630 0.9x 123% 9%8069-HK N/C Tong Ren Tang Technologies Co. Ltd. TCM HKD 14.26 360 194 214 230 13.8x 12.4x 11.4x 10% 1.2x 1.1x 360 1.7x 122% 2%239-HK N/C Pak Fah Yeow International Ltd. TCM HKD 1.6 54 53 73% 3%8019-HK N/C Everpride Biopharmaceutical Co. Ltd. TCM HKD 0.227 21 25 318% -1%8037-HK N/C Longlife Group Holdings Ltd. TCM HKD 0.25 17 21 21 20 1.0x 13% -7%8197-HK N/C Northeast Tiger Pharmaceutical Co. Ltd. TCM HKD 0.166 16 16 133% -1%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 49 London Listed Chinese Healthcare Companies (sorted by subsector) Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTDCMSH-GB N/C China Medical System Holdings Ltd. Chemical GBP 4.775 360 87 142 199 18.3x 14.7x 10.6x 31% 0.5x 0.3x 337 2.4x 304% 1%HCM-GB N/C Hutchison China MediTech Ltd. TCM GBP 1.975 161 134 169 190 139 0.8x 405% -1%TAIH-GB N/C Taihua PLC Chemical GBP 0.11 14 3 5 64.7x 2 0.3x 42%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 50 Singapore Listed Chinese Healthcare Companies (sorted by subsector) Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTDA61-SG N/C Luye Pharma Group Ltd. TCM SGD 0.63 222 209 116% 1%E92-SG N/C C&O Pharmaceutical Technology (Holdings) Ltd Chemical SGD 0.275 128 71 71 82 9.3x 9.3x 7.9x 4% 2.6x 2.2x 104 1.5x 100% 10%R12-SG N/C Reyoung Pharmaceutical Holdings Ltd. Chemical SGD 0.31 70 95 180% 11%X64-SG N/C Star Pharmaceutical Ltd. Chemical SGD 0.1 16 22 80% 11%CZ3-SG N/C Reyphon Agriceutical Ltd. Biotech SGD 0.055 12 8 71% -8%S38-SG N/C Sunray Holdings Ltd. Device SGD 0.03 7 6 50%Sales (US$mn) PE PEG PerformanceSource: Factset, Morgan Stanley Research, Priced as of Jan 11, 2010 Exhibit 51 US Listed Chinese Healthcare Companies (sorted by subsector) Mkt Cap EPS CAGR EV EV/SalesTicker Rating Company Name Subsector Price (US$mn) 09E 10E 11E 09E 10E 11E 09-11E 10E 11E (US$mn) 10E 09 YTDCBPO-US N/C China Biologic Products Inc. Biotech USD 12.92 293 104 123 149 22.0x 11.8x 10.5x 30% 0.4x 0.4x 339 2.7x 504% 7%SVA-US N/C Sinovac Biotech Ltd. Biotech USD 6.67 284 93 98 105 11.9x 12.6x 12.9x 39% 0.3x 0.3x 278 2.8x 359% 5%SSRX-US OW 3SBio Inc. (ADS) Biotech USD 13.2 284 46 57 74 22.9x 20.6x 17.0x 39% 0.5x 0.4x 177 3.1x 76% -4%WX-US OW WuXi PharmaTech (Cayman) Inc. Chemical USD 17.66 1126 270 331 405 21.5x 19.0x 15.4x 8% 2.4x 2.0x 1171 3.5x 100% 11%SCR-US UW Simcere Pharmaceutical Group (ADS) Chemical USD 9.64 600 265 321 387 19.4x 19.0x 20.4x 587 1.9x 29% 4%CSKI-US N/C China Sky One Medical Inc. Chemical USD 22.9 382 135 164 180 9.9x 8.6x 8.1x 15% 0.6x 0.5x 325 2.0x 42% 1%BJGP-US N/C BMP Sunstone Corp. Chemical USD 5.74 239 145 171 196 49.9x 259 1.5x 2% 1%CPHI-US N/C China Pharma Holdings Inc. Chemical USD 3.87 164 61 75 90 7.8x 7.0x 7.4x 6% 1.2x 1.3x 164 2.2x 238% 1%BSPM-US N/C Biostar Pharmaceuticals Inc. Chemical USD 4.19 97 95 341% -6%RHGP