Global Healthcare Analyst

Tina Banerjee

Equity Capital Markets

Fujian Haixi Pharmaceuticals / Equity Capital Markets

<ul>
<li>Fujian Haixi Pharmaceuticals has filed for HK IPO to raise up to HK$994M. The company plans to sell 11.5M H shares at HK$ 86.40 per share.</li>
<li>The company intends to use IPO proceeds for R&amp;D to advance the clinical pipeline, mainly innovative drug candidates, and enhancing commercialization capabilities and expanding market presence.</li>
<li>Haixi Pharma has 15 NMPA-approved generic drugs, out of which 13 products have been commercialized.  Five generic drug candidates are expected to be approved for marketing by 2025 or 2026.</li>
</ul>


Fujian Haixi Pharmaceuticals has filed for HK IPO to raise up to HK$994M. The company plans to sell 11.5M H shares at HK$ 86.40 per share.
The company intends to use IPO proceeds for R&amp;D to advance the clinical pipeline, mainly innovative drug candidates, and enhancing commercialization capabilities and expanding market presence.
Haixi Pharma has 15 NMPA-approved generic drugs, out of which 13 products have been commercialized.  Five generic drug candidates are expected to be approved for marketing by 2025 or 2026.


Fujian Haixi Pharmaceuticals IPO: Expanding Portfolio Augurs Well for Sustainable Growth

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Following Trump's threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.</li>
<li>The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse. </li>
<li>
<a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, and <a href="https://www.smartkarma.com/entities/hua-hong-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:7201:1" rel="noopener">Hua Hong Semiconductor (1347 HK)</a> are badly exposed.</li>
</ul>


Following Trump's threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.
The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse. 

Semiconductor Manufacturing International Corp (SMIC) (981 HK), Kuaishou Technology (1024 HK), Alibaba (9988 HK), and Hua Hong Semiconductor (1347 HK) are badly exposed.


HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Jiangsu Hengrui Medicine / Equity Bottom-Up

<ul>
<li>The 11th national VBP has optimized the selection of price difference control "anchor points", which is an important signal, implying that future VBP will follow the general direction of “anti-involution”.</li>
<li>As long as there’s no significant difference in pipeline data, buyers are more concerned about the speed of R&amp;D progress and may not necessarily dwell on potential advantages and disadvantages.</li>
<li>Hengrui's innovative drug revenue was slightly lower-than-expected. The Company's 2025 employee stock ownership plan has lowered the compound growth target for innovative drugs from 30% to 25%.</li>
</ul>


The 11th national VBP has optimized the selection of price difference control "anchor points", which is an important signal, implying that future VBP will follow the general direction of “anti-involution”.
As long as there’s no significant difference in pipeline data, buyers are more concerned about the speed of R&amp;D progress and may not necessarily dwell on potential advantages and disadvantages.
Hengrui's innovative drug revenue was slightly lower-than-expected. The Company's 2025 employee stock ownership plan has lowered the compound growth target for innovative drugs from 30% to 25%.


China Healthcare Weekly (Oct.12) - 11th National VBP, Future BD Trend, Hengrui Is Facing Headwinds

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>A pullback is finally underway following Trump's Friday tape bomb and the decisive loss of the 20-day MA on the SPX, though $<span style="color: #24a9a7;">ACWI is testing the 4-month uptrend at $136</span>
</li>
<li>We are no longer near-term bullish which had been in place since our April 22 report, but we are still bullish intermediate-term and are buyers on pullbacks.</li>
<li>Short-Term supports to watch on ACWI-US include the 4+ month uptrend (currently at $136), $134-$134.50, $131.50-$132, $130, $128, and $125-$126.</li>
</ul>


A pullback is finally underway following Trump's Friday tape bomb and the decisive loss of the 20-day MA on the SPX, though $ACWI is testing the 4-month uptrend at $136

We are no longer near-term bullish which had been in place since our April 22 report, but we are still bullish intermediate-term and are buyers on pullbacks.
Short-Term supports to watch on ACWI-US include the 4+ month uptrend (currently at $136), $134-$134.50, $131.50-$132, $130, $128, and $125-$126.


Stick With Global Technology; Pullback Phase Finally Here on $ACWI; Supports to Buy

Chow Tai Fook Jewellery / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> is one of the best-performing <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> constituents YTD, but it is time to take some money off the table.</li>
<li>At 5%, its 12-month forward dividend yield is about the lowest in the last five years, implying limited share price upside. Valuations have run ahead of earnings momentum.</li>
<li>The recent recovery in Hong Kong jewellery retail sales is partly due to the low base effect. Additionally, a higher gold price will weigh on demand for gold products. </li>
</ul>



Chow Tai Fook Jewellery (1929 HK) is one of the best-performing Hang Seng Index (HSI INDEX) constituents YTD, but it is time to take some money off the table.
At 5%, its 12-month forward dividend yield is about the lowest in the last five years, implying limited share price upside. Valuations have run ahead of earnings momentum.
The recent recovery in Hong Kong jewellery retail sales is partly due to the low base effect. Additionally, a higher gold price will weigh on demand for gold products. 


Chow Tai Fook (1929 HK): A Lot Has Been Priced In

China

Hansoh Pharmaceutical Group Company Limited operates as a pharmaceutical company. The Company manufactures and sells anti-infectives, anti-neoplastic agents, diabetes drugs, and other products. Hansoh Pharmaceutical Group markets its products throughout China.

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Hansoh Pharmaceutical Group (3692 HK)

Fujian Haixi Pharmaceuticals IPO: Expanding Portfolio Augurs Well for Sustainable Growth

Haixi Pharmaceuticals is offering 11.5M H shares at HK$86.40 per share for its HK IPO to raise up to HK$994M. IPO proceeds will fund R&D of...

Tina Banerjee

HK Strategy: Who Will Suffer the Most?

Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

Osbert Tang, CFA

China Healthcare Weekly (Oct.12) - 11th National VBP, Future BD Trend, Hengrui Is Facing Headwinds

The 11th national VBP signals a shift towards "anti-involution". We shared views on licensing cooperation trend. Due to declining innovative drug...

Xinyao (Criss) Wang

Stick With Global Technology; Pullback Phase Finally Here on $ACWI; Supports to Buy

Stick With Global Technology; Pullback Phase Finally Here on $ACWI $SPX Likely in 3%-7% Range; Supports to watch on $ACWI include $136, $134...

Vermilion Research

Chow Tai Fook (1929 HK): A Lot Has Been Priced In

CTF is a top-performing HSI constituent YTD, but with low dividend yield and high valuations, it may be time to sell. Recovery in HK jewellery...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Fujian Haixi Pharmaceuticals IPO: Expanding Portfolio Augurs Well for Sustainable Growth

Haixi Pharmaceuticals is offering 11.5M H shares at HK$86.40 per share for its HK IPO to raise up to HK$994M. IPO proceeds will fund R&D of...

Tina Banerjee

HK Strategy: Who Will Suffer the Most?

​Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

Osbert Tang, CFA

China Healthcare Weekly (Oct.12) - 11th National VBP, Future BD Trend, Hengrui Is Facing Headwinds

​The 11th national VBP signals a shift towards "anti-involution". We shared views on licensing cooperation trend. Due to declining innovative drug...

Xinyao (Criss) Wang

Stick With Global Technology; Pullback Phase Finally Here on $ACWI; Supports to Buy

Stick With Global Technology; Pullback Phase Finally Here on $ACWI $SPX Likely in 3%-7% Range; Supports to watch on $ACWI include $136, $134...

Vermilion Research

Chow Tai Fook (1929 HK): A Lot Has Been Priced In

CTF is a top-performing HSI constituent YTD, but with low dividend yield and high valuations, it may be time to sell. Recovery in HK jewellery...

Osbert Tang, CFA

Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

The 11th national VBP signals a shift towards "anti-involution". We shared views on licensing cooperation trend. Due to declining innovative drug...