HEALTH care stocks listed in Shanghai and Shenzhen took another battering last week in the worst start to the year since 2016, as selling resumed amid worries over China’s plans to cut medical costs and set out stricter drug development rules. The CSI 300 Health Care Index plunged 5.5 percent in the first week of trading, more than double the broader mainland benchmark, driven by biotech and pharmaceutical names. Losses were led by Shenzhen-listed Asymchem Laboratories Co., which fell 19 percent last week, its biggest decline on record. Health care firms are contending with shifts in research and development policies as well as drags on profit from drug price cuts. The sector now trades at 33 times 12-month forward price-to-earnings ratio, from nearly 55 times in February last year. The decline also tracks the S&P 500 Health Care Index, which tumbled 4.7 percent last week as rising bond yields weighed on demand for companies yet to make a profit. “Policy uncertainty remains an overhang for the sector,” said Mia He, an analyst at Bloomberg Intelligence. New regulatory measures including oncology drug development guidances have put some pressure on biotech companies and firms providing contract services to drugmakers since the second half of 2021. That’s made investors “sensitive to unexpected policy updates,” she said. Those draft guidelines released last year have worried investors because of the potential to slow down drug approvals and set a higher bar on innovative drugs. (SD-Agencies) | 