HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Many investors may not understand China's NRDL negotiation system and the new adjustments in July. So, we think it’s necessary to clarify the rules/key points of NRDL negotiation procedures.</li>
<li>NHSA provides clear calculation rules for price reduction, greatly increasing the predictability of price changes during renewal process in NRDL negotiation. However, the benefits brought by new adjustments are limited.</li>
<li>The main direct beneficiaries are those "old drugs" since their price reduction can be controlled in renewal process. For enterprises, the biggest obstacle is the first NRDL negotiation with NHSA.</li>
</ul>


Many investors may not understand China's NRDL negotiation system and the new adjustments in July. So, we think it’s necessary to clarify the rules/key points of NRDL negotiation procedures.
NHSA provides clear calculation rules for price reduction, greatly increasing the predictability of price changes during renewal process in NRDL negotiation. However, the benefits brought by new adjustments are limited.
The main direct beneficiaries are those "old drugs" since their price reduction can be controlled in renewal process. For enterprises, the biggest obstacle is the first NRDL negotiation with NHSA.


Interpretation of the New Adjustments in Medical Insurance (NRDL) Negotiation Rules and the Impact

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

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>There continues to be little traction above $93 on MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range. Important downside targets are $86, $84, and $75-77.</li>
<li>Additionally, the EURO STOXX 50 remains below 2-year resistance at 4400-4415.</li>
<li>We remain overweight Europe, Japan, and India, and we prefer to only add exposure on a pullback -- especially in Japan where indexes are bullish yet extended.</li>
</ul>


There continues to be little traction above $93 on MSCI ACWI (ACWI-US), which remains the top-end of our anticipated 2023 trading range. Important downside targets are $86, $84, and $75-77.
Additionally, the EURO STOXX 50 remains below 2-year resistance at 4400-4415.
We remain overweight Europe, Japan, and India, and we prefer to only add exposure on a pullback -- especially in Japan where indexes are bullish yet extended.


No Traction Above $93 on ACWI-US or 4400-4415 on EURO STOXX 50. Buys in Defensives/Japan/EM

Oil & Natural Gas Corp / Technical Analysis

<ul>
<li>MSCI EM (EEM-US) has continued to hold above our $37-$37.50 line-in-the-sand, meaning we are constructive from a price perspective.</li>
<li>We have maintained an underweight to emerging markets, and we are overweight developed international (MSCI EAFE, Europe, Japan) as discussed in in <em>Int’l Compass</em> and <em>ETF Pathfinder</em> reports throughout 2023.</li>
<li>Still, there are plenty of attractive countries and Sectors within the EM landscape, which is what we are focusing on today.</li>
</ul>


MSCI EM (EEM-US) has continued to hold above our $37-$37.50 line-in-the-sand, meaning we are constructive from a price perspective.
We have maintained an underweight to emerging markets, and we are overweight developed international (MSCI EAFE, Europe, Japan) as discussed in in Int’l Compass and ETF Pathfinder reports throughout 2023.
Still, there are plenty of attractive countries and Sectors within the EM landscape, which is what we are focusing on today.


EM Strategy: MSCI EM Financials & Energy Improving-Overweight; Overweights: Taiwan, India, Mexico

Equity Capital Markets

Jacobio Pharmaceuticals / Equity Capital Markets

<ul>
<li>There is limited breakthrough points in the field of small molecule drugs. Except those big varieties, the market space of small-molecular drugs is not optimistic due to small applicable population.</li>
<li>For KRAS, it just crossed the threshold of druggablility, but the whole pathway hasn’t shown the feeling of being a blockbuster variety, which would dampen the optimism of Jacobio's valuation.</li>
<li>Jacobio is among the few biotech under Chapter 18A who really develop drugs seriously. Therefore, despite the challenging outlook, we hoped that Dr. Yinxiang Wang would finally break through.</li>
</ul>


There is limited breakthrough points in the field of small molecule drugs. Except those big varieties, the market space of small-molecular drugs is not optimistic due to small applicable population.
For KRAS, it just crossed the threshold of druggablility, but the whole pathway hasn’t shown the feeling of being a blockbuster variety, which would dampen the optimism of Jacobio's valuation.
Jacobio is among the few biotech under Chapter 18A who really develop drugs seriously. Therefore, despite the challenging outlook, we hoped that Dr. Yinxiang Wang would finally break through.


Jacobio Pharmaceuticals Placement (1167.HK) - We Keep Hope for Jacobio Because of Dr. Wang Yinxiang

Shandong BoAn Biotechnology  / Equity Capital Markets

<ul>
<li>Without the advantages in product efficacy, production capacity, clinical progress and speed of approval, Boan's products have lost their pricing power in both China and overseas markets.</li>
<li>Due to the lack of differentiation and frontier enough target layout, the product commercialization potential is bound to be more easily questioned, with limited value in the long term.</li>
<li>Even if Boan could go public successfully, investors may not be able to achieve the expected returns because of the unfriendly market sentiment and a lack of liquidity in HKEX. </li>
</ul>


Without the advantages in product efficacy, production capacity, clinical progress and speed of approval, Boan's products have lost their pricing power in both China and overseas markets.
Due to the lack of differentiation and frontier enough target layout, the product commercialization potential is bound to be more easily questioned, with limited value in the long term.
Even if Boan could go public successfully, investors may not be able to achieve the expected returns because of the unfriendly market sentiment and a lack of liquidity in HKEX. 


Pre-IPO Shandong Boan Biotechnology - Conservative About the Outlook

China

Betta Pharmaceuticals Co., Ltd operates as a pharmaceutical company. The Company researches, manufactures, and sells drugs for the treatment of malignant tumors, diabetes, cardiovascular, cerebrovascular, and other related diseases. Betta Pharmaceuticals markets throughout China.

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Betta Pharmaceuticals (300558 CH)

Interpretation of the New Adjustments in Medical Insurance (NRDL) Negotiation Rules and the Impact

It's necessary to explain the NRDL negotiation system and new adjustments, which increase the predictability of drug price decline.Investors are...

Xinyao (Criss) Wang

No Traction Above $93 on ACWI-US or 4400-4415 on EURO STOXX 50. Buys in Defensives/Japan/EM

No Traction Above $93 on MSCI $ACWI or 4400-4415 on EURO #STOXX 50. Continues to reinforce our view from early-January that $93 on ACWI caps upside...

Vermilion Research

EM Strategy: MSCI EM Financials & Energy Improving-Overweight; Overweights: Taiwan, India, Mexico

MSCI EM Financials & Energy Improving -- Upgrading to Overweight; MSCI EM Technology remains an Overweight. Top Country Overweights: Taiwan, India,...

Vermilion Research

Jacobio Pharmaceuticals Placement (1167.HK) - We Keep Hope for Jacobio Because of Dr. Wang Yinxiang

Jacobio's situation and prospects are full of challenges, but Dr. Wang Yinxiang/Jacobio is among the few biotech under Chapter 18A who really...

Xinyao (Criss) Wang

Pre-IPO Shandong Boan Biotechnology - Conservative About the Outlook

Due to lack of differentiated/frontier enough target layout and slow progress, Boan's product commercialization potential is highly uncertain....

Xinyao (Criss) Wang

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