Asian Health Care Equities: All Dressed Up, But Nowhere to Go (Yet)

Templeton Global Equity reviews trends and opportunities in this sector.

Roman Aliev, CFA

Roman Aliev, CFA Research Analyst, Templeton Global Equity Group

Peter Sartori

Peter SartoriVice President and Portfolio Manager, Templeton Global Equity Group


After varying stages of virus-related lockdown, most everyone can relate to the frustrations of suspended animation. The waiting game is an all-too-familiar experience for value investors, who are often relegated to the sidelines when the price ascribed to optimism becomes too rich. Such is largely the case today in Asian health care. We believe the sector is attractively positioned with numerous cyclical and secular tailwinds, which we discuss here in detail. Yet for the most part, it remains prohibitively expensive, in our view.

Navigating the current opportunity set in Asian health care requires patience and preparation. At Templeton Global Equity Group (TGEG), we have focused on building up a “reserve list” of stocks that we are eager to buy once volatility again creates opportunity, as it did earlier this year. Abraham Lincoln said, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” Investment managers do not work with axes, but we have been sharpening our pencils on the Asian health care sector. In this paper, we introduce some of the trends that should eventually underpin the long-term investment opportunities in the sector. We show how deep fundamental research, proactive analysis, and a large team with local knowledge are critical to preparing for, and ultimately capitalizing on, the opportunities on the horizon.

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