Commissioned by one of the world's most sophisticated alternative investment institutions, China Business Solutions carried out an intensive study on investment opportunities into a particular Chinese Traditional Medicine manufacturer, as well as provided general market intelligence on China's healthcare and pharmaceutical industry.

According to an expert in the pharmaceutical industry, there are more than 10,000 pharmaceutical companies in China, but only 10% of them are profitable, while the rest of them are at break-even or losing money.

Due to the fast growth in demand, government regulation in the industry is becoming more stringent. In order to meet higher requirements from the government, small-sized manufactures have to invest more to improve their facilities. However, if they don't have strong financial capabilities, it will be challenging for them to remain operating. This would point to more M&A activities in China in almost all sectors of the industry.

The liberalization of the market following China's entry into the WTO has brought many multi-national enterprises and manufacturers to enter this market. Currently, there is more competition for attractive acquisition targets, in particular, in the pharmaceutical and health care industries. According to the National Statistical Bureau, total investments from overseas were 338 billion RMB in 2006, and nearly 10% were invested in chemical API and the pharmaceutical industry.

With capital widely available from private equity firms and foreign companies, profitable and well-managed companies are sold at a premium. The valuations are becoming similar to those in the US and Europe.

If companies are interested in investing or building up partnership in China's healthcare and pharmaceutical industry, we can help guide you through the whole process, from understanding the regulatory landscape, to finding partners and registering drugs.