Hutchmed Share News (HCM)

Panmure Gordon is attracted to Hutchison China Meditech's (Chi-Med) increase in ownership of its subsidiary and its location in a rapidly-growing market.The China-based healthcare and consumer products group announced Friday that it has paid $2.7m to indirectly increase its holding effectively from 37.5% to 40% of its subsidiary Hutchison Baiyunshan (HBYS).HBYS is engaged in the manufacture and sale of over-the-counter traditional Chinese medicines and in 2009 it recorded revenue and net profits of $67.8m and $7.4m respectively.The broker expects HBYS's revenues to grow to $83.3m in fiscal year 2010 while net profit will remain broadly flat at $7m.Additionally, with the Chinese consumer healthcare market currently growing at more than 15%, robust growth is expected in the industry in the coming decade.The broker says the current valuation of Chi-Med does not reflect the combined value of the company's business, re-iterating its 'buy' and price target of 600p.