HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Hangzhou Kangji Medical Instrument Co., Ltd. / Equity Bottom-Up

Hangzhou Kangji Medical Instrument Co., Ltd.

<ul>
<li>Valuation based on Cancellation Price hasn’t fully reflected the potential of Weijing Medical Robot business, nor does it reflect the future growth driven by import substitution due to centralized procurement.</li>
<li>The medical device sector is expected to have a strong trend of performance reversal/valuation repair. Kangji's fundamentals/prospects are moving in a positive direction. Reasonable valuation is HK$12-15 billion at least.</li>
<li>The current Cancellation Price of HK$9.25 is too low to normally reflect the Company's true fundamentals and prospects. Therefore, we're worried that there would be some investors opposing this privatization.</li>
</ul>


Valuation based on Cancellation Price hasn’t fully reflected the potential of Weijing Medical Robot business, nor does it reflect the future growth driven by import substitution due to centralized procurement.
The medical device sector is expected to have a strong trend of performance reversal/valuation repair. Kangji's fundamentals/prospects are moving in a positive direction. Reasonable valuation is HK$12-15 billion at least.
The current Cancellation Price of HK$9.25 is too low to normally reflect the Company's true fundamentals and prospects. Therefore, we're worried that there would be some investors opposing this privatization.


Kangji Medical (9997 HK) Privatization - The Cancellation Price Is Not Attractive

Shenzhen Mindray Bio-Medical Electronics / Equity Bottom-Up

<ul>
<li>Mindray’s 2023 growth just hit the low end of our forecast.The good story that “recovery of routine diagnosis/treatment after COVID-19 would drive the growth of MI/IVD businesses” doesn’t hold water.</li>
<li>Mindray may fail to get back to 20%+ revenue growth in 2024 based on current situation.The Company has to continue to “buy revenue” so as to reverse the declining trend.</li>
<li>The valuation of about 25-30 PE is reasonable for Mindray, not undervalued. If PE falls to the range of 20-25, we think it is a good place to go long.</li>
</ul>


Mindray’s 2023 growth just hit the low end of our forecast.The good story that “recovery of routine diagnosis/treatment after COVID-19 would drive the growth of MI/IVD businesses” doesn’t hold water.
Mindray may fail to get back to 20%+ revenue growth in 2024 based on current situation.The Company has to continue to “buy revenue” so as to reverse the declining trend.
The valuation of about 25-30 PE is reasonable for Mindray, not undervalued. If PE falls to the range of 20-25, we think it is a good place to go long.


Shenzhen Mindray Bio-Medical Electronics (300760.CH) - Time to Bring "New Growth Story" To Investors

Duality Biotherapeutics / Equity Bottom-Up

<ul>
<li>Trump said he will place import taxes on 100% of pharmaceutical drugs, which will begin on Oct.1. Below, we shared our views on this new policy.</li>
<li>Some companies continue to repurchase/increase their holdings despite the industry's significant rise this year, indicating that major shareholders truly have confidence in the outlook. We specifically listed these companies.</li>
<li>The fluctuations in Duality’s stock price are obviously driven by capital after being included in HK Stock Connect. we suggest that investors pay attention to risks as Duality faces correction.</li>
</ul>


Trump said he will place import taxes on 100% of pharmaceutical drugs, which will begin on Oct.1. Below, we shared our views on this new policy.
Some companies continue to repurchase/increase their holdings despite the industry's significant rise this year, indicating that major shareholders truly have confidence in the outlook. We specifically listed these companies.
The fluctuations in Duality’s stock price are obviously driven by capital after being included in HK Stock Connect. we suggest that investors pay attention to risks as Duality faces correction.


China Healthcare Weekly (Sep.28) - Trump’s Pharma Tariff, Companies Increase Their Holdings, Duality

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There are 2 constituent changes for the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">STAR50 INDEX</a> and 6 changes for the STAR100 Index at the September rebalance that will be implemented at the close on 13 September.</li>
<li>There are no surprises for the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> while there are 3 surprise adds for the STAR100 Index with the profitability criterion being ignored.</li>
<li>The adds to the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> have outperformed the deletes over the last month and positioning is larger in some stocks compared to others.</li>
</ul>


There are 2 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the September rebalance that will be implemented at the close on 13 September.
There are no surprises for the SSE STAR50 (STAR50 INDEX) while there are 3 surprise adds for the STAR100 Index with the profitability criterion being ignored.
The adds to the SSE STAR50 (STAR50 INDEX) have outperformed the deletes over the last month and positioning is larger in some stocks compared to others.


STAR50/STAR100 Index Rebalance: Adds Rally, Deletes Drop as Positioning Builds Up

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

<ul>
<li>The September 2024 index review results for the STAR 50 and STAR 100 indices were announced after market close on Friday 30th August 2024.</li>
<li>There will be 2 changes for the STAR 50 index and 6 changes for the STAR 100 index.</li>
<li>The STAR 50 and STAR 100 rebalances will collectively trigger one-way flows of more than US$1bn during the September 2024 index rebal event.</li>
</ul>


The September 2024 index review results for the STAR 50 and STAR 100 indices were announced after market close on Friday 30th August 2024.
There will be 2 changes for the STAR 50 index and 6 changes for the STAR 100 index.
The STAR 50 and STAR 100 rebalances will collectively trigger one-way flows of more than US$1bn during the September 2024 index rebal event.


Quiddity STAR 50/100 Sep 24 Rebalance: 100% Hit Rate; US$1bn+ One-Way Flows

China

APT Medical Inc. engages in development, production and sales of electrophysiology and vascular interventional medical devices. The Company provides coronary artery access and electrophysiological medical devices, peripheral blood vessels and nerve intervention medical devices, and more. APT Medical markets its products worldwide.

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APT Medical (688617 CH)

Kangji Medical (9997 HK) Privatization - The Cancellation Price Is Not Attractive

The Cancellation Price is too low to normally reflect Kangji's true fundamentals/outlook. The whole industry is moving in positive direction. We’re...

Xinyao (Criss) Wang

Shenzhen Mindray Bio-Medical Electronics (300760.CH) - Time to Bring "New Growth Story" To Investors

Mindray is currently facing the dilemma of sluggish growth. YoY revenue growth would further decrease to 15% in the future. Without "new growth...

Xinyao (Criss) Wang

China Healthcare Weekly (Sep.28) - Trump’s Pharma Tariff, Companies Increase Their Holdings, Duality

Trump’s 100% pharma tariff starting Oct. 1. Major shareholders of some companies increased their holdings at high prices. Fluctuations in Duality’s...

Xinyao (Criss) Wang

STAR50/STAR100 Index Rebalance: Adds Rally, Deletes Drop as Positioning Builds Up

There are 2 changes for the STAR50 and 6 changes for the STAR100. Impact is pretty large on the STAR50 changes. There is positioning in all stocks...

Brian Freitas

Quiddity STAR 50/100 Sep 24 Rebalance: 100% Hit Rate; US$1bn+ One-Way Flows

In the last month, STAR 50 ADDs have gained 8.0% and STAR 50 DELs have declined 9.5% on average. The Inclusion/Exclusion events will be on Friday...

Janaghan Jeyakumar, CFA

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