Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Brilliance China Automotive / Equity Bottom-Up

<ul>
<li>With the Hang Seng Index dipping below the 15,000 mark earlier this week, it's time to dust off some old school perspective.</li>
<li>This insight looks at Benjamin Graham's Net Nets, (current assets less current liabilities), then subtract any debt not included in current liabilities. More simply, current assets less total liabilities.</li>
<li>Graham would conclude these stocks are priced for liquidation.  Stocks discussed include <a href="https://www.smartkarma.com/entities/brilliance-china-automotive" target="_blank" data-smartkarma-citation="entities:469:1" rel="noopener">Brilliance China (1114 HK)</a>, <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan (909 HK)</a>, <a href="https://www.smartkarma.com/entities/yidu-tech-inc" target="_blank" data-smartkarma-citation="entities:29245:1" rel="noopener">Yidu Tech (2158 HK)</a>, and <a href="https://www.smartkarma.com/entities/a-living-smart-city-services-c" target="_blank" data-smartkarma-citation="entities:26728:1" rel="noopener">A-Living Smart City (3319 HK)</a>.</li>
</ul>


With the Hang Seng Index dipping below the 15,000 mark earlier this week, it's time to dust off some old school perspective.
This insight looks at Benjamin Graham's Net Nets, (current assets less current liabilities), then subtract any debt not included in current liabilities. More simply, current assets less total liabilities.
Graham would conclude these stocks are priced for liquidation.  Stocks discussed include Brilliance China (1114 HK), Ming Yuan (909 HK), Yidu Tech (2158 HK), and A-Living Smart City (3319 HK).


More Hong Kong Stocks Priced For Liquidation

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Shanghai Haohai Biological Tec / Equity Bottom-Up

<ul>
<li>The General Office of the State Council issued favorable policy for TCM industry. However, TCM still has to face VBP, therefore <a href="https://www.smartkarma.com/entities/zhangzhou-pientzehuang-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:15709:1" rel="noopener">Zhangzhou Pientzehuang Pharmaceutical Co. (600436 CH)</a> and Gushengtang are our top picks..</li>
<li>Pfizer is in talks to acquire Seagen in a deal worth over US$30 billion, but we remain conservative about whether this transaction would ultimately bring expected contributions to Pfizer.</li>
<li>Haohai’s business model fails to bring ideal performance. Increasing competition/declining gross margin cast doubts on the outlook of medical aesthetics business. We’re not optimistic about its potential valuation upside.</li>
</ul>


The General Office of the State Council issued favorable policy for TCM industry. However, TCM still has to face VBP, therefore Zhangzhou Pientzehuang Pharmaceutical Co. (600436 CH) and Gushengtang are our top picks..
Pfizer is in talks to acquire Seagen in a deal worth over US$30 billion, but we remain conservative about whether this transaction would ultimately bring expected contributions to Pfizer.
Haohai’s business model fails to bring ideal performance. Increasing competition/declining gross margin cast doubts on the outlook of medical aesthetics business. We’re not optimistic about its potential valuation upside.


China Healthcare Weekly (March.3) - TCM New Policy, Pfizer to Acquire Seagen, Haohai Biological

<ul>
<li>Mismatch between blood products supply and demand is intensifying, but there’s little way to increase production capacity in short time, which offers a good time to invest blood products companies. </li>
<li>Investors should not be too greedy in front of every rally and rebound, but the proportion of medical expenditure and pension expenditure in China's GDP would still increase.</li>
<li>
<a href="https://www.smartkarma.com/entities/cansino-biologics-inc-cc0c90b7-e854-4ba3-929b-914be1bd0d89" target="_blank" data-smartkarma-citation="entities:32181:1" rel="noopener">CanSino Biologics Inc (688185 CH)</a> intends to IPO in Swiss. We think share price of CanSino would bounce back. It’s time to keep an eye on CanSino again. </li>
</ul>


Mismatch between blood products supply and demand is intensifying, but there’s little way to increase production capacity in short time, which offers a good time to invest blood products companies. 
Investors should not be too greedy in front of every rally and rebound, but the proportion of medical expenditure and pension expenditure in China's GDP would still increase.

CanSino Biologics Inc (688185 CH) intends to IPO in Swiss. We think share price of CanSino would bounce back. It’s time to keep an eye on CanSino again. 


China Healthcare Weekly (Feb.3)- CanSino, Blood Products Shortage, Don't Be Greedy in Front of Rally

Thematic (Sector/Industry)

<ul>
<li>Recently, Premier Li Keqiang delivered the government work report, which mentioned 2022 pharmaceutical industry's priorities. We summarized the key points below.</li>
<li>The skyrocketed experimental monkey price should be noticed, which would put more pressure on biotech companies. CXO also needs to control costs, both its own personnel and the monkeys.</li>
<li>The market value of a pharmaceutical enterprise is not determined by technology patent,but by the market competitiveness of products, which is based on R&amp;D capabilities and deep technology accumulation.</li>
</ul>


Recently, Premier Li Keqiang delivered the government work report, which mentioned 2022 pharmaceutical industry's priorities. We summarized the key points below.
The skyrocketed experimental monkey price should be noticed, which would put more pressure on biotech companies. CXO also needs to control costs, both its own personnel and the monkeys.
The market value of a pharmaceutical enterprise is not determined by technology patent,but by the market competitiveness of products, which is based on R&amp;D capabilities and deep technology accumulation.


China Healthcare Weekly (Mar.11) - 2022 Government Work Report, Expensive Monkeys, Technology Patent

<ul>
<li>Last week, Guangdong province issued a volume-based purchase (VBP) document, among which recombinant human growth hormone (rhGH) and blood products are included, causing widespread concern in the market.</li>
<li>The survival problem of listed biotech companies is becoming more urgent. In primary market, investment banks have started recommending CEOs of unlisted biotech companies to “reconsider” their IPO plans.</li>
<li>In terms of internationalization, companies with three characteristics are likely to become international pharmaceutical enterprises in 10 years.</li>
</ul>


Last week, Guangdong province issued a volume-based purchase (VBP) document, among which recombinant human growth hormone (rhGH) and blood products are included, causing widespread concern in the market.
The survival problem of listed biotech companies is becoming more urgent. In primary market, investment banks have started recommending CEOs of unlisted biotech companies to “reconsider” their IPO plans.
In terms of internationalization, companies with three characteristics are likely to become international pharmaceutical enterprises in 10 years.


China Healthcare Weekly (Jan.21)-Growth Hormone VBP,Biotech Survival,Internationalization Conditions

China

Abbisko Cayman Limited operates as a biopharmaceutical company. The Company dedicated to the discovery and development of innovative and differentiated small molecule incology therapies. Abbisko Cayman provides services in China.

Abbisko Cayman (2256 HK)

More Hong Kong Stocks Priced For Liquidation

This note looks at Net Nets, (current assets less current liabilities), then subtract debt not included in current liabilities. Benjamin Graham...

David Blennerhassett

China Healthcare Weekly (March.3) - TCM New Policy, Pfizer to Acquire Seagen, Haohai Biological

New favorable policy for TCM industry was released. We analyzed our top picks. Pfizer is in talks to acquire Seagen, but we're conservative about...

Xinyao (Criss) Wang

China Healthcare Weekly (Feb.3)- CanSino, Blood Products Shortage, Don't Be Greedy in Front of Rally

Contradiction between blood products supply and demand is intensifying. Cansino plans to IPO in Swiss -We see upside potential in...

Xinyao (Criss) Wang

China Healthcare Weekly (Mar.11) - 2022 Government Work Report, Expensive Monkeys, Technology Patent

We listed the key points about healthcare industry in 2022 government work report. Companies should notice the skyrocketed experimental monkey...

Xinyao (Criss) Wang

China Healthcare Weekly (Jan.21)-Growth Hormone VBP,Biotech Survival,Internationalization Conditions

We analyzed the impact of growth hormone/blood products VBP; the "reconsideration" of biotech IPO in primary market, survival problem of listed...

Xinyao (Criss) Wang