HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Investors appear to have lost faith in China healthcare following a plunge in CXO shares.But seeing the decline in CXO orders as indicator of industry's prosperity is a lagging view.</li>
<li>The logic of CXO is tied to biotech on the one hand and to overseas relationships on the other. But Biotech remains the cornerstone of the overall logical chain. </li>
<li>According to the primary market situation, we’re not optimistic about CXO's domestic business to achieve a significant recovery next year, but the overseas recovery/financing situation may improve a bit faster.</li>
</ul>


Investors appear to have lost faith in China healthcare following a plunge in CXO shares.But seeing the decline in CXO orders as indicator of industry's prosperity is a lagging view.
The logic of CXO is tied to biotech on the one hand and to overseas relationships on the other. But Biotech remains the cornerstone of the overall logical chain. 
According to the primary market situation, we’re not optimistic about CXO's domestic business to achieve a significant recovery next year, but the overseas recovery/financing situation may improve a bit faster.


China CXO Has Reached a Crossroads - Time to Reconsider

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Equity Bottom-Up

<ul>
<li>Since the last reshuffle (July 9), our Model Portfolio has appreciated 1.46%. MSCI Asia ex Japan index (MXASJ) has dropped 1.77%. AI infrastructure stocks primarily contributed to the portfolio drawdown.</li>
<li>Focus on AI "picks and shovels" providers, industrials, defense, industrial metals and banks remain. We also like Indian automobiles. We replace Hyundai Engineering and Construction with HD Hyundai Heavy Industries.</li>
<li>We are overweight on HK/China, Korea and India. We are underweight Taiwan but overweight Taiwan technology. We are Neutral ASEAN.</li>
</ul>


Since the last reshuffle (July 9), our Model Portfolio has appreciated 1.46%. MSCI Asia ex Japan index (MXASJ) has dropped 1.77%. AI infrastructure stocks primarily contributed to the portfolio drawdown.
Focus on AI "picks and shovels" providers, industrials, defense, industrial metals and banks remain. We also like Indian automobiles. We replace Hyundai Engineering and Construction with HD Hyundai Heavy Industries.
We are overweight on HK/China, Korea and India. We are underweight Taiwan but overweight Taiwan technology. We are Neutral ASEAN.


Asian Equities: Model Portfolio Outperformed; Minor Changes to the Industrials Sleeve

<ul>
<li>National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.</li>
<li>After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.</li>
<li>If long-term money doesn't have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can't be adjusted in time (e.g. CXO).</li>
</ul>


National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.
After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.
If long-term money doesn't have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can't be adjusted in time (e.g. CXO).


China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

Equity Derivatives

<ul>
<li>Hong Kong equities paused after a strong run, with market breadth weakening despite a continued upside skew in individual stock returns.</li>
<li>Single stock option activity fell sharply, with weaker Call trading accounting for much of the decline.</li>
<li>HSI implied volatility remains subdued relative to its recent history, while single stock implied vols remain comparatively elevated.</li>
</ul>


Hong Kong equities paused after a strong run, with market breadth weakening despite a continued upside skew in individual stock returns.
Single stock option activity fell sharply, with weaker Call trading accounting for much of the decline.
HSI implied volatility remains subdued relative to its recent history, while single stock implied vols remain comparatively elevated.


Hong Kong Single Stock Options Weekly Aug 03–07: Day-Of-Week Pattern Emerges as Volumes and Vol Fall

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>China's CXO sector is growing rapidly, with China's dominant companies providing critical services to global pharmaceutical companies.  New modalities, particularly GLP-1/TIDES, ADCs, and bispecific antibodies, are structural demand drivers.</li>
<li>The biggest overhang for the sector, the US BioSecure Act, is overblown due to the US pharma industry's substantial structural dependency on China's CXO sector.</li>
<li>Pharmaron's investment case rests on three interlocking pillars: an irreplaceable integrated platform, a landmark commercial anchor in the GLP-1 supercycle, and the structural impossibility of a rapid US-China CXO decoupling.</li>
</ul>


China's CXO sector is growing rapidly, with China's dominant companies providing critical services to global pharmaceutical companies.  New modalities, particularly GLP-1/TIDES, ADCs, and bispecific antibodies, are structural demand drivers.
The biggest overhang for the sector, the US BioSecure Act, is overblown due to the US pharma industry's substantial structural dependency on China's CXO sector.
Pharmaron's investment case rests on three interlocking pillars: an irreplaceable integrated platform, a landmark commercial anchor in the GLP-1 supercycle, and the structural impossibility of a rapid US-China CXO decoupling.


CHINA BIOTECH SECTOR: Pharmaron's One Stop Shop!

China

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (603259 CH)

China CXO Has Reached a Crossroads - Time to Reconsider

Investors seem to have lost faith in China healthcare due to a plunge in CXO shares. This view is biased. It's time to clarify key logical points...

Xinyao (Criss) Wang

Asian Equities: Model Portfolio Outperformed; Minor Changes to the Industrials Sleeve

Model Portfolio outperformed MXASJ. Drivers: base metals, industrials, select consumers. Focus stays on AI "picks & shovels", industrial, defense,...

Manishi Raychaudhuri

China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

National VBP on ICL/sports medicine and other fields is coming.It's expected to see the emergence of high-price-oriented payment system for...

Xinyao (Criss) Wang

Hong Kong Single Stock Options Weekly Aug 03–07: Day-Of-Week Pattern Emerges as Volumes and Vol Fall

A weaker week for Hong Kong equities brought softer option activity and implied vols, while the recurring weakness later in the trading week...

John Ley

CHINA BIOTECH SECTOR: Pharmaron's One Stop Shop!

A US judge blocked the Defense Department from enforcing its designation of WuXi AppTec Co. as a Chinese military company, and granted...

David Mudd

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China CXO Has Reached a Crossroads - Time to Reconsider

Investors seem to have lost faith in China healthcare due to a plunge in CXO shares. This view is biased. It's time to clarify key logical points...

Xinyao (Criss) Wang

Asian Equities: Model Portfolio Outperformed; Minor Changes to the Industrials Sleeve

​Model Portfolio outperformed MXASJ. Drivers: base metals, industrials, select consumers. Focus stays on AI "picks & shovels", industrial, defense,...

Manishi Raychaudhuri

China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

National VBP on ICL/sports medicine and other fields is coming.It's expected to see the emergence of high-price-oriented payment system for...

Xinyao (Criss) Wang

Hong Kong Single Stock Options Weekly Aug 03–07: Day-Of-Week Pattern Emerges as Volumes and Vol Fall

A weaker week for Hong Kong equities brought softer option activity and implied vols, while the recurring weakness later in the trading week...

John Ley

CHINA BIOTECH SECTOR: Pharmaron's One Stop Shop!

A US judge blocked the Defense Department from enforcing its designation of WuXi AppTec Co. as a Chinese military company, and granted...

David Mudd

Model Portfolio outperformed MXASJ. Drivers: base metals, industrials, select consumers. Focus stays on AI "picks & shovels", industrial, defense,...