HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Livzon Pharmaceutical Group In / Equity Bottom-Up

<ul>
<li>With rising COVID-19 cases, a pandemic outbreak in late 2024 is likely. Investors should focus on related sectors and stocks again.</li>
<li>Due to BIOSECURE Act, US companies are leaving Chinese partners.If Trump is elected, his sanctions on China's supply chain may intensify. So, there should be “valuation discount” for China CXOs.</li>
<li>Livzon may have negative YoY revenue growth in 24H1, but full-year revenue may have positive low single-digit YoY growth. Due to good dividend/repurchase policy, Livzon deserves more patience from investors.</li>
</ul>


With rising COVID-19 cases, a pandemic outbreak in late 2024 is likely. Investors should focus on related sectors and stocks again.
Due to BIOSECURE Act, US companies are leaving Chinese partners.If Trump is elected, his sanctions on China's supply chain may intensify. So, there should be “valuation discount” for China CXOs.
Livzon may have negative YoY revenue growth in 24H1, but full-year revenue may have positive low single-digit YoY growth. Due to good dividend/repurchase policy, Livzon deserves more patience from investors.


China Healthcare Weekly (Aug.18)- COVID Is Here, BIOSECURE Act Update, Livzon Deserves More Patience

Thematic (Sector/Industry)

<ul>
<li>Entering 2024, more provinces/regions have included assisted reproductive medical service projects into medical insurance reimbursement scope. It is expected that the government will accelerate the introduction of supporting measures ahead.</li>
<li>Livzon’s performance in 2023 was disappointing.For BGI, even if the BIOSECURE Act passes and BGI is sanctioned by the US, the overall impact on the company is limited and controllable.</li>
<li>Jinxin has gradually recovered from the negative impact of COVID-19.With the recovery of international flights and the increase in the number of patients, the Company would be back on track. </li>
</ul>


Entering 2024, more provinces/regions have included assisted reproductive medical service projects into medical insurance reimbursement scope. It is expected that the government will accelerate the introduction of supporting measures ahead.
Livzon’s performance in 2023 was disappointing.For BGI, even if the BIOSECURE Act passes and BGI is sanctioned by the US, the overall impact on the company is limited and controllable.
Jinxin has gradually recovered from the negative impact of COVID-19.With the recovery of international flights and the increase in the number of patients, the Company would be back on track. 


China Population Policies Impact on Healthcare Companies Series – Part 4

<ul>
<li>Starting from November 1st 2023, Guangxi Zhuang Autonomous Region will include some therapeutic assisted reproductive medical services in the payment scope of basic medical insurance and work-related injury insurance funds.</li>
<li>Livzon’s 23Q3 performance was below expectations, which is related to China’s anti-corruption campaign started from 23H2. Considering the Chairman's proposal to repurchase shares, we should be more patient with Livzon.</li>
<li>BGI is still digesting the impact of COVID revenue, and would experience a performance low point in 2023.However, BGI belongs to the direction of national key science and technology projects.</li>
</ul>


Starting from November 1st 2023, Guangxi Zhuang Autonomous Region will include some therapeutic assisted reproductive medical services in the payment scope of basic medical insurance and work-related injury insurance funds.
Livzon’s 23Q3 performance was below expectations, which is related to China’s anti-corruption campaign started from 23H2. Considering the Chairman's proposal to repurchase shares, we should be more patient with Livzon.
BGI is still digesting the impact of COVID revenue, and would experience a performance low point in 2023.However, BGI belongs to the direction of national key science and technology projects.


China Population Policies Impact on Healthcare Companies Series - Part 3

<ul>
<li>Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. </li>
<li>This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year's financial results.</li>
<li>We analyzed the performance of <a href="https://www.smartkarma.com/entities/livzon-pharmaceutical-group-in" target="_blank" data-smartkarma-citation="entities:24770:1" rel="noopener">Livzon Pharmaceutical Group In (000513 CH),</a><a href="https://www.smartkarma.com/entities/bgi-genomics-co-ltd" target="_blank" data-smartkarma-citation="entities:25890:1" rel="noopener">BGI Genomics (300676 CH)</a><a href="https://www.smartkarma.com/entities/livzon-pharmaceutical-group-in" target="_blank" data-smartkarma-citation="entities:24770:1" rel="noopener"> and </a><a href="https://www.smartkarma.com/entities/jinxin-fertility-group-ltd" target="_blank" data-smartkarma-citation="entities:28003:1" rel="noopener">Jinxin Fertility Group (1951 HK) </a>based on their 23H1 reports, and adjusted our forecast accordingly.</li>
</ul>


Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. 
This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year's financial results.
We analyzed the performance of Livzon Pharmaceutical Group In (000513 CH),BGI Genomics (300676 CH) and Jinxin Fertility Group (1951 HK) based on their 23H1 reports, and adjusted our forecast accordingly.


China Population Policies Impact on Healthcare Companies Series – Part 2

Jinxin Fertility Group  / Equity Bottom-Up

<ul>
<li>China has started taking measures to optimize fertility policies. The inclusion of assisted reproduction technologies in medical insurance is a general trend, which would generate increasing demand in the future.</li>
<li>From the current domestic assisted reproductive industry chain, there is significant import substitution space and growth potential in the fields of related drugs, prenatal/newborn genetic testing, and downstream medical services.</li>
<li>Companies such as Livzon/BGI/Jinxin would be the direct beneficiaries of related policy. We analyzed the industry characteristics, investment rationale, key risks and comparison with peers of these companies. </li>
</ul>


China has started taking measures to optimize fertility policies. The inclusion of assisted reproduction technologies in medical insurance is a general trend, which would generate increasing demand in the future.
From the current domestic assisted reproductive industry chain, there is significant import substitution space and growth potential in the fields of related drugs, prenatal/newborn genetic testing, and downstream medical services.
Companies such as Livzon/BGI/Jinxin would be the direct beneficiaries of related policy. We analyzed the industry characteristics, investment rationale, key risks and comparison with peers of these companies. 


China Population Policies Impact on Healthcare Companies Series - Part 1

China

BGI Genomics Co., Ltd offers researching and testing services. The Company provides deoxyribonucleic acid sequencing, food science, health care researching, cancer prevention, drug discovery, and DNA sequencing. BGI Genomics offers services to medical and scientific research institutions worldwide.

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BGI Genomics (300676 CH)

China Healthcare Weekly (Aug.18)- COVID Is Here, BIOSECURE Act Update, Livzon Deserves More Patience

COVID is coming again. So investors can focus on related stocks. US companies leaving Chinese partners due to BIOSECURE Act. Livzon is still worth...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series – Part 4

Different provinces expand coverage for assisted reproductive services in medical insurance. Livzon missed expectation in 2023.US sanction on BGI...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series - Part 3

We updated the most recent changes in relevant fertility support policies in China. Meanwhile, we also analyzed our views on the performance and...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series – Part 2

Several regions have successively introduced policies to encourage childbirth, so we analyzed the recent policy updates. Based on Livzon/BGI...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series - Part 1

China's population problem is already very serious. So, the government has begun to take a series of measures to optimize fertility policies. We...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Healthcare Weekly (Aug.18)- COVID Is Here, BIOSECURE Act Update, Livzon Deserves More Patience

COVID is coming again. So investors can focus on related stocks. US companies leaving Chinese partners due to BIOSECURE Act. Livzon is still worth...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series – Part 4

​Different provinces expand coverage for assisted reproductive services in medical insurance. Livzon missed expectation in 2023.US sanction on BGI...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series - Part 3

We updated the most recent changes in relevant fertility support policies in China. Meanwhile, we also analyzed our views on the performance and...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series – Part 2

Several regions have successively introduced policies to encourage childbirth, so we analyzed the recent policy updates. Based on Livzon/BGI...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series - Part 1

China's population problem is already very serious. So, the government has begun to take a series of measures to optimize fertility policies. We...

Xinyao (Criss) Wang

Different provinces expand coverage for assisted reproductive services in medical insurance. Livzon missed expectation in 2023.US sanction on BGI...