Bought China Nepstar (NYSE:NPD) this afternoon at $5.25 a share. I should have bought back when I originally recommended it at $4.45, but oh well.
What changed my mind was the healthcare reforms that China is in the process of passing. For comparison, about 70% of the profits generated by American retail pharmacies (Rite-Aid, CVS, Walgreen's, etc;) come from drug prescriptions. In China, the hospitals run their own pharmacies. These generate a lot of cash for the hospitals, but people are upset at the apparent conflict of interest. So, China is passing some reforms that will move a lot of these prescription drugs to retailers like China Nepstar. There will still be "essential medicines" that the hospital will carry, but the business is changing. I bought these shares as a long term investment. Nepstar is still a growth stock, and I believe they can open thousands of new branches like they want to.
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