** Shares of China Traditional Chinese Medicine Holdings 0570.HK fall 6.5% to HK$2.17, on track for the biggest one-day pct drop since April 7

** Stock touches the lowest since July 2, on course for the second consecutive session of decline

** The traditional Chinese medicine (TCM) maker, with current market capitalisation of $1.42 billion, expects H1 net profit to drop 165%-175% y/y amid intensified market competition in concentrated TCM granules business, among others

** Hong Kong's healthcare index .HSCIH rises 1.4%, benchmark Hang Seng Index .HSI adds 0.6%

** YTD, stock down 0.2%

($1 = 7.8487 Hong Kong dollars)

(Reporting by Donny Kwok)

((donny.kwok@thomsonreuters.com))