Chinese healthcare-related stocks tumbled in Hong Kong on speculation authorities are turning to online pharmaceutical platforms as the next focus of regulatory crackdown, erasing HK$40 billion (US$5 billion) of market value on Wednesday.
Alibaba Health Information sank 13.8 per cent to HK$4.79 at the close of Wednesday trading, the most in 11 months, while JD Health tumbled 14.8 per cent to HK$53.40, its worst drop in two months. A healthcare sub-gauge within the Hang Seng Composite Index retreated 3.1 per cent, the most in nearly two weeks, as 62 of its 75 members slid.
China is mulling a ban on third-party platforms from selling medicines online, the 21st Century Business Herald reported on Tuesday, citing people it did not identify. Regulators might clarify the boundaries between self-operated and third-party platforms when engaging in online drug sales, the mainland media reported.
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The media report has sparked worries in the market, reviving concerns that regulations could be implemented, said Sunny Chen, analyst at UOB Kay Hian. The sell-off, however, could be one-off, she added.
The report fanned jitters in a market, just when fund managers are beginning to believe that Beijing is stepping away from tightening the regulatory noose on the tech sector after a trillion-dollar market rout.
Months of clampdown last year on internet platform operators crippled for-profit private tutoring firms overnight, forcing some to switch to live-streaming shopping, among others.
China’s pharmaceutical e-commerce sales were forecast to grow to around 177 billion yuan (US$26.3 billion) by 2028 and account for almost a third of total pharmaceutical retail sales, up from 2 per cent in 2018, according to a report by Deloitte.
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