HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

China Resources Sanjiu Medical & Pharma / Equity Bottom-Up

China Resources Sanjiu Medical & Pharma (000999 CH)

<ul>
<li>For a considerable period of time, the industry has been speculating about when the large-scale VBP of TCM formula granules will officially begin. Now, here it comes. </li>
<li>Primary market and other financing except IPO in European and US biopharma industry shows a significant signal of recovery. However, IPOs remain stagnant. </li>
<li>We analyzed key points about China Resources Sanjiu. Sanjiu is expected to have better performance in 2023 than 2022, but we advise investors to allow a sufficient margin of safety.</li>
</ul>


For a considerable period of time, the industry has been speculating about when the large-scale VBP of TCM formula granules will officially begin. Now, here it comes. 
Primary market and other financing except IPO in European and US biopharma industry shows a significant signal of recovery. However, IPOs remain stagnant. 
We analyzed key points about China Resources Sanjiu. Sanjiu is expected to have better performance in 2023 than 2022, but we advise investors to allow a sufficient margin of safety.


China Healthcare Weekly (Aug.18) - TCM Formula Granules VBP, Global Financing Rebound, CR Sanjiu

China Shineway Pharmaceutical / Equity Bottom-Up

<ul>
<li>Shineway’s 2022 performance was outstanding.Its TCM formula granules business would seize more market share and maintain strong growth momentum, which would continue to be the main performance driver in 2023.</li>
<li>Considering obvious policy preferences and lower price reduction of TCM in VBP, we recommend investors to leave a place for TCM company in portfolio, and Shineway deserves investors’ attention.</li>
<li>Shineway is cash rich. Together with promising growth potential and solid financial performance, Shineway's share price is expected to perform well, which could be a good trading target for investors.</li>
</ul>


Shineway’s 2022 performance was outstanding.Its TCM formula granules business would seize more market share and maintain strong growth momentum, which would continue to be the main performance driver in 2023.
Considering obvious policy preferences and lower price reduction of TCM in VBP, we recommend investors to leave a place for TCM company in portfolio, and Shineway deserves investors’ attention.
Shineway is cash rich. Together with promising growth potential and solid financial performance, Shineway's share price is expected to perform well, which could be a good trading target for investors.


China Shineway Pharmaceutical (2877.HK) - Strong Growth Momentum Is Expected to Continue in 2023

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 could be 25 inclusions, including many new listings, to the Hang Seng Composite Index (HSCI) in September. Another 6 stocks are close adds on liquidity and market cap.</li>
<li>We see 19 potential deletes and 2 close deletes on market cap, 5 potential deletes on prolonged trading suspension, and 2 close deletes on liquidity.</li>
<li>There are 8 potential deletions where holdings via Stock Connect are more than 20% of shares outstanding. There could be some unwinding of positions over the next couple of months.</li>
</ul>


There could be 25 inclusions, including many new listings, to the Hang Seng Composite Index (HSCI) in September. Another 6 stocks are close adds on liquidity and market cap.
We see 19 potential deletes and 2 close deletes on market cap, 5 potential deletes on prolonged trading suspension, and 2 close deletes on liquidity.
There are 8 potential deletions where holdings via Stock Connect are more than 20% of shares outstanding. There could be some unwinding of positions over the next couple of months.


HSCI Index Rebalance Preview and Stock Connect: The Final List for September

<ul>
<li>The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.</li>
<li>CDE will move closer to the FDA's standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.</li>
<li>We analyzed some key points about <a href="https://www.smartkarma.com/entities/hua-medicine" target="_blank" data-smartkarma-citation="entities:27410:1" rel="noopener">Hua Medicine Ltd (2552 HK)</a>. We think its core drug Dorzagliatin still has many uncertainties that are worth investors' attention.</li>
</ul>


The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.
CDE will move closer to the FDA's standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.
We analyzed some key points about Hua Medicine Ltd (2552 HK). We think its core drug Dorzagliatin still has many uncertainties that are worth investors' attention.


China Healthcare Weekly (Jun.23) - National TCM VBP Results, CDE Changes Game Rule, Hua Medicine

<ul>
<li>Shineway’s 23Q1 performance growth exceeded expectations, mainly driven by TCM formula granules products and injection products. A surge of COVID infection rate in China since 22Q4 was an important reason. </li>
<li>Based on data, revenue proportion of COVID-19 related products is not low. So, related sales growth in following quarters this year would decrease as the dividend period of pandemic ends.  </li>
<li>As the growth of TCM formula granules is expected to offset the slowdown of COVID-19 TCM products, Shineway’s overall revenue growth would still be strong in 2023. Valuation isn’t cheap.</li>
</ul>


Shineway’s 23Q1 performance growth exceeded expectations, mainly driven by TCM formula granules products and injection products. A surge of COVID infection rate in China since 22Q4 was an important reason. 
Based on data, revenue proportion of COVID-19 related products is not low. So, related sales growth in following quarters this year would decrease as the dividend period of pandemic ends.  
As the growth of TCM formula granules is expected to offset the slowdown of COVID-19 TCM products, Shineway’s overall revenue growth would still be strong in 2023. Valuation isn’t cheap.


China Shineway Pharmaceutical (2877.HK) 23Q1 - Growth Is Likely to Slow in Coming Quarters

China

China Shineway Pharmaceutical Group Limited is an investment holding company primarily engaged in the research, development, manufacturing, and trading of modern Chinese pharmaceutical products. Its diverse portfolio includes injections, soft capsules, and granules, targeting therapeutic areas such as cardiovascular, respiratory, and pediatric conditions. The company was founded in 2002 and is headquartered in Shijiazhuang, China.

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China Shineway Pharmaceutical (2877 HK)

China Healthcare Weekly (Aug.18) - TCM Formula Granules VBP, Global Financing Rebound, CR Sanjiu

China's first TCM formula granules VBP begins.Primary market financing in global biopharma industry rebound, but IPO remains weak.China Resources...

Xinyao (Criss) Wang