HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Beijing Tong Ren Tang Chinese Medicine / Equity Bottom-Up

Beijing Tong Ren Tang Chinese Medicine (3613 HK)

<ul>
<li>Tong Ren Tang Chinese Medicine’s performance declined in 22H1 due to the pandemic, which led to the short supply of the core products and a serious setback of production/operation.</li>
<li>The recovery of the Company’s performance in 2022H2 depends not only on the alleviation of the pandemic, but also on the sustainability of the demand for non-rigid medical products.</li>
<li>In the long run, whether the overseas sales except those in Hong Kong and the Mainland can have breakthrough is the main supporting logic for raising the valuation.</li>
</ul>


Tong Ren Tang Chinese Medicine’s performance declined in 22H1 due to the pandemic, which led to the short supply of the core products and a serious setback of production/operation.
The recovery of the Company’s performance in 2022H2 depends not only on the alleviation of the pandemic, but also on the sustainability of the demand for non-rigid medical products.
In the long run, whether the overseas sales except those in Hong Kong and the Mainland can have breakthrough is the main supporting logic for raising the valuation.


Beijing Tong Ren Tang Chinese Medicine (3613.HK) 22H1 - Performance Recovery in 22H2 Is Uncertain

Beijing Tongrentang Co A / Equity Bottom-Up

<ul>
<li>2018 was a watershed for Tongrentang. After the incident of using expired honey was exposed and the corruption scandal afterwards, Tongrentang's performance declined significantly and didn’t recover until 2021.</li>
<li>Angong Niuhuang Pill is the major performance driver and also Tongrentang’s core product. Due to the economic downturn, the price increase of Angong Niuhuang Pills could lead to inventory overstocking.</li>
<li>The high growth in 2021 may not be sustained. We lowered our forecast for 2022. Without core competitiveness and high moat, we are conservative about Tongrentang’s long-term outlook.</li>
</ul>


2018 was a watershed for Tongrentang. After the incident of using expired honey was exposed and the corruption scandal afterwards, Tongrentang's performance declined significantly and didn’t recover until 2021.
Angong Niuhuang Pill is the major performance driver and also Tongrentang’s core product. Due to the economic downturn, the price increase of Angong Niuhuang Pills could lead to inventory overstocking.
The high growth in 2021 may not be sustained. We lowered our forecast for 2022. Without core competitiveness and high moat, we are conservative about Tongrentang’s long-term outlook.


Beijing Tongrentang (600085.CH)- Neither Brand Nor Angong Niuhuang Pills Can Secure Future Prospects

<ul>
<li>After a downturn in 2019,Consun has turned things around and achieved amazing results in 2021. Its core business was not affected by VBP. Consun will continue to make further progress.</li>
<li>Consun is undervalued if compared with industry average, the peers and considering its large cash balance. Share prices have decent upside potential, driven by fundamentals, promising outlook and favorable policies.</li>
<li>Wanbangde’s intention to acquire Consun’s shares at high price would also be a catalyst. We recommended investors to follow Consun closely, which has certain investment value based on our analysis.</li>
</ul>


After a downturn in 2019,Consun has turned things around and achieved amazing results in 2021. Its core business was not affected by VBP. Consun will continue to make further progress.
Consun is undervalued if compared with industry average, the peers and considering its large cash balance. Share prices have decent upside potential, driven by fundamentals, promising outlook and favorable policies.
Wanbangde’s intention to acquire Consun’s shares at high price would also be a catalyst. We recommended investors to follow Consun closely, which has certain investment value based on our analysis.


Consun Pharmaceutical (1681HK)- High-Priced Acquisition & Good Performance Show Big Upside Potential

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>For our next Webinar, we are happy to welcome Insight Provider <a href="https://www.smartkarma.com/profiles/steven-chen" target="_blank" data-smartkarma-citation="accounts:10934" rel="noopener">Steven Chen</a> , who will break down his quality-focused, business-perspective investing strategy and then dig deeper into some under-appreciated multi-bag picks that his strategy brings forth in China/Hong Kong as well as across Asia-Pacific.</p>
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<h3>The webinar will be hosted on Wednesday, 7 July 2021, 17:00 SGT/HKT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=87808685654" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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<p>Steven Chen is a quality-focused, business-perspective investor with bottom-up opportunistic approaches, an ex-hedge fund analyst on Wall Street, a serial entrepreneur, a strategic advisor, a computer scientist, a free-market capitalist, and a global citizen. He is the founder of Urbem Capital.</p>
</div>

For our next Webinar, we are happy to welcome Insight Provider Steven Chen , who will break down his quality-focused, business-perspective investing strategy and then dig deeper into some under-appreciated multi-bag picks that his strategy brings forth in China/Hong Kong as well as across Asia-Pacific.


The webinar will be hosted on Wednesday, 7 July 2021, 17:00 SGT/HKT.





Register for the Webinar here


Steven Chen is a quality-focused, business-perspective investor with bottom-up opportunistic approaches, an ex-hedge fund analyst on Wall Street, a serial entrepreneur, a strategic advisor, a computer scientist, a free-market capitalist, and a global citizen. He is the founder of Urbem Capital.


Smartkarma Webinar | Top Picks in China / Hong Kong

Quality-first, Business-perspective, Long-term, Urbem (HK) Limited

Urbem Capital

Quality-first, Business-perspective, Long-term

<ul>
<li>We tend to avoid turnarounds as they seldom turn;</li>
<li>But Beijing Tong Ren Tang Chinese Medicine can be a rare case in our opinion;</li>
<li>We see the company as being a wide-moat compounding machine, highly hopeful of delivering superior returns on capital when its business condition normalizes (sooner or later);</li>
<li>Simultaneously, the valuation of the share makes sense for alpha-seeking investors with a double-digit hurdle rate.</li>
</ul>


We tend to avoid turnarounds as they seldom turn;
But Beijing Tong Ren Tang Chinese Medicine can be a rare case in our opinion;
We see the company as being a wide-moat compounding machine, highly hopeful of delivering superior returns on capital when its business condition normalizes (sooner or later);
Simultaneously, the valuation of the share makes sense for alpha-seeking investors with a double-digit hurdle rate.


Beijing Tong Ren Tang Chinese Medicine: A Turnaround Worth A Look

Hong Kong

Beijing Tong Ren Tang Chinese Medicine Co., Ltd. is primarily involved in the manufacturing, retail, and wholesale of traditional Chinese medicine products and healthcare products, alongside offering Chinese medical consultation and treatment services. Key products include Angong Niuhuang Pill and Sporoderm broken Ganoderma Lucidum Spores Powder Capsules. The company is headquartered in Hong Kong and was established in 2004 as the overseas development platform for the renowned Tong Ren Tang brand, which originated in 1669.

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Beijing Tong Ren Tang Chinese Medicine (3613 HK)