HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The 9th national VBP has begun. We analyzed the major big varieties with sales over RMB1 billion included in this VBP and the impact on related domestic pharmaceutical companies. </li>
<li>"Concept validation" of the business model of Chinese Biotech companies has been completed. Even under enormous pressure of medical insurance fee control policy, drug sales remain a reliable profit model.</li>
<li>Medlive's weak share price performance has a reason. The significant profitability increase in 23H1 wasn't from the improvement of main business. Its business model needs time to be further validated.</li>
</ul>


The 9th national VBP has begun. We analyzed the major big varieties with sales over RMB1 billion included in this VBP and the impact on related domestic pharmaceutical companies. 
"Concept validation" of the business model of Chinese Biotech companies has been completed. Even under enormous pressure of medical insurance fee control policy, drug sales remain a reliable profit model.
Medlive's weak share price performance has a reason. The significant profitability increase in 23H1 wasn't from the improvement of main business. Its business model needs time to be further validated.


China Healthcare Weekly (Sep.8)- 9th VBP, Reliable Profit Model of Biotech, Medlive, China's Outlook

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

Shandong Hi-Speed New Energy G / Index Rebalance

<ul>
<li>In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI in December 2023.</li>
<li>Based on the latest available data, I expect one ADD and one DEL for HSCEI in December 2023. </li>
<li>There is more than one potential ADD in the top 40 according to my estimates but recent history tells us some of these names are not "<em>index-provider-friendly.</em>"</li>
</ul>


In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI in December 2023.
Based on the latest available data, I expect one ADD and one DEL for HSCEI in December 2023. 
There is more than one potential ADD in the top 40 according to my estimates but recent history tells us some of these names are not "index-provider-friendly."


Quiddity HSCEI Dec 23 Flow Expectations: At Least One Change Likely; There Could Be More

Shanghai Junshi Biosciences  / Equity Bottom-Up

<ul>
<li>IPO rules in SSE STAR Market faces adjustments, so investors have lowered expectations, which will affect the fundraising ecology. Recovery of China’s financing environment would be slower than US/Europe.</li>
<li>The CSRC has issued new policies related to stamp duty, IPO, and reduction of shares held by listed companies, which would significantly affect the capitalization path of pharmaceutical companies.</li>
<li>Junshi is “an interesting Biotech” that once generated sales/profits in scale, but is losing money again.Since Junshi is outside the first echelon and the gap is widening, we remain conservative. </li>
</ul>


IPO rules in SSE STAR Market faces adjustments, so investors have lowered expectations, which will affect the fundraising ecology. Recovery of China’s financing environment would be slower than US/Europe.
The CSRC has issued new policies related to stamp duty, IPO, and reduction of shares held by listed companies, which would significantly affect the capitalization path of pharmaceutical companies.
Junshi is “an interesting Biotech” that once generated sales/profits in scale, but is losing money again.Since Junshi is outside the first echelon and the gap is widening, we remain conservative. 


China Healthcare Weekly (Sep.1) - China's New IPO Reform, Financing Environment, Junshi Biosciences

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

<ul>
<li>The JPX Nikkei 400 index rebalance will take place on Wednesday, MSIC on Thursday and <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSCI on Friday.</li>
<li>There are review cutoffs for the MVIS family of indices, and multiple announcements of changes to various indices during the week.</li>
<li>There were inflows to mainland China ETFs, <a href="https://www.smartkarma.com/entities/ishares-msci-india-etf" target="_blank" data-smartkarma-citation="entities:282:1" rel="noopener">iShares India ETF (INDA)</a>, <a href="https://www.smartkarma.com/entities/ishares-msci-india-small-cap" target="_blank" data-smartkarma-citation="entities:32064:1" rel="noopener">Ishares India Small-Cap (SMIN)</a> and <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares EmergingMarkets ex China (EMXC)</a> while there were outflows for <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets" target="_blank" data-smartkarma-citation="entities:438:1" rel="noopener">iShares Emerging Markets (EEM)</a>.</li>
</ul>


The JPX Nikkei 400 index rebalance will take place on Wednesday, MSIC on Thursday and HSI, HSCEI, HSTECH and HSCI on Friday.
There are review cutoffs for the MVIS family of indices, and multiple announcements of changes to various indices during the week.
There were inflows to mainland China ETFs, iShares India ETF (INDA), Ishares India Small-Cap (SMIN) and iShares EmergingMarkets ex China (EMXC) while there were outflows for iShares Emerging Markets (EEM).


Index Rebalance & ETF Flow Recap: HSCEI, HSI, HSTECH, Yuanta ETFs, China ETFs, REMX, KOSPI

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>BGNE: Roche announced positive result for its TIGIT treating NSCLC, overturning negative result for treating EC-SCLC (/)</li>
<li>300274CH/300750CH/1211HK: Customs data shows Chinese exports of key renewable energy items decelerated</li>
<li>JD/2618.HK: Estimates for the cost of JD lowering the threshold to receive free shipping (-/+)</li>
</ul>


BGNE: Roche announced positive result for its TIGIT treating NSCLC, overturning negative result for treating EC-SCLC (/)
300274CH/300750CH/1211HK: Customs data shows Chinese exports of key renewable energy items decelerated
JD/2618.HK: Estimates for the cost of JD lowering the threshold to receive free shipping (-/+)


China TMT Update-BGNE/300274CH/300750CH/1211HK/JD/ 2618.HK-JD Lowering the Threshold to Free Shipping

China

BeiGene, Ltd. operates as a commercial stage biopharmaceutical company. The Company focuses on discovery, development, and commercialization of molecularly targeted and immuno-oncology drugs for the treatment of cancer. BeiGene serves patients worldwide.

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BeOne (ONC US)

China Healthcare Weekly (Sep.8)- 9th VBP, Reliable Profit Model of Biotech, Medlive, China's Outlook

9th national VBP has begun. We analyzed the impact on companies. 23H1 reports make us realize even with negative policy, China Biotech can still...

Xinyao (Criss) Wang

Quiddity HSCEI Dec 23 Flow Expectations: At Least One Change Likely; There Could Be More

Shandong Hi-Speed New Energy (1250 HK) / Beijing Energy (686 HK) and Shandong Hi-Speed New Energy (1250 HK) / Concord New Energy (182 HK) price...

Janaghan Jeyakumar, CFA

China Healthcare Weekly (Sep.1) - China's New IPO Reform, Financing Environment, Junshi Biosciences

CSRC issued new policies related to IPO reform in China.As IPO rules in A-share face adjustments, fundraising ecology will change.Junshi is far...

Xinyao (Criss) Wang

Index Rebalance & ETF Flow Recap: HSCEI, HSI, HSTECH, Yuanta ETFs, China ETFs, REMX, KOSPI

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

China TMT Update-BGNE/300274CH/300750CH/1211HK/JD/ 2618.HK-JD Lowering the Threshold to Free Shipping

Estimates for the cost of JD lowering the threshold to receive free shipping; Chinese exports of key renewable energy items decelerated;Roche...

Blue Lotus Research Institute

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