HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

China Traditional Chinese Medicine / Equity Bottom-Up

<ul>
<li>China TCM is still in the adjustment period due to CTCMG VBP and goodwill impairment loss. However, the new management is pushing for internal reforms, which is a good phenomenon.</li>
<li>Rebound will come after China TCM fully digest the impact of VBP. Looking forward, annual profit of RMB1bn is still expected. Reasonable valuation is RMB10-15bn, which is just conservative estimate.</li>
<li>As CNPGC still commits to resolving the horizontal competition issue, investors have reignited interest in betting on privatization of China TCM and potential merger with Taiji, which is a catalyst.</li>
</ul>


China TCM is still in the adjustment period due to CTCMG VBP and goodwill impairment loss. However, the new management is pushing for internal reforms, which is a good phenomenon.
Rebound will come after China TCM fully digest the impact of VBP. Looking forward, annual profit of RMB1bn is still expected. Reasonable valuation is RMB10-15bn, which is just conservative estimate.
As CNPGC still commits to resolving the horizontal competition issue, investors have reignited interest in betting on privatization of China TCM and potential merger with Taiji, which is a catalyst.


China TCM (570.HK) - Performance Is Expected to Rebound

<ul>
<li>China TCM’s Profit Warning indicates a weak 25H1 results. Performance downturn is longer-than-expected. But as an industry leader, China TCM will enhance its bargaining power by integrating the industrial chain.</li>
<li>Investors have reignited interest in betting on privatization of China TCM and potential merger with Taiji, as deadline is approaching.Privatization price may be lower considering China TCM’s weak 25H1 results.</li>
<li>HK$0.84-2.17/Share is the reasonable share price range at this stage.The catalyst for China TCM’s share price is CNPGC may announce how to address the horizontal competition issue within three months.</li>
</ul>


China TCM’s Profit Warning indicates a weak 25H1 results. Performance downturn is longer-than-expected. But as an industry leader, China TCM will enhance its bargaining power by integrating the industrial chain.
Investors have reignited interest in betting on privatization of China TCM and potential merger with Taiji, as deadline is approaching.Privatization price may be lower considering China TCM’s weak 25H1 results.
HK$0.84-2.17/Share is the reasonable share price range at this stage.The catalyst for China TCM’s share price is CNPGC may announce how to address the horizontal competition issue within three months.


China TCM (570.HK) - About the 25H1 Profit Warning and the Outlook

<ul>
<li>TCM finished drugs and TCM decoction pieces businesses could be the second and third growth curve of China TCM when the concentrated TCM granules business is facing VBP headwinds.</li>
<li>2024 would be the performance low point. Due to 2024 low base, we would see positive growth in 2025.Performance recovery is expected in next three years based on our forecast.</li>
<li>Annual profit of RMB1 billion is achievable. If based on 10x P/E, market value is RMB10 billion.We think if valuations fall below RMB10 billion, investors can consider buying on dips.</li>
</ul>


TCM finished drugs and TCM decoction pieces businesses could be the second and third growth curve of China TCM when the concentrated TCM granules business is facing VBP headwinds.
2024 would be the performance low point. Due to 2024 low base, we would see positive growth in 2025.Performance recovery is expected in next three years based on our forecast.
Annual profit of RMB1 billion is achievable. If based on 10x P/E, market value is RMB10 billion.We think if valuations fall below RMB10 billion, investors can consider buying on dips.


China TCM (570.HK) - Updates on Performance Forecast and Valuation Outlook Based on 2024 Results

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the 22nd August 2025, SOE-backed <a href="https://www.smartkarma.com/entities/dongfeng-motor-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:910:1" rel="noopener">Dongfeng Motor (489 HK)</a> announced a privatisation; together with a concurrent listing of its EV arm, VOYAH. The two proposals are interconditional.</li>
<li>In its October <a href="https://www1.hkexnews.hk/app/sehk/2025/107757/documents/sehk25100202720.pdf" target="_blank" rel="noopener">application proof</a>, VOYAH turned a profit in 7M25.  The market was implying a price-to-trailing-sales of 1.5x for VOYAH, versus the basket average of 2.1x. It's now ~1.2x.</li>
<li>Key PRC reg approvals (Mofcom/NDRC/SAFE) remain outstanding. Meanwhile, a basket of peers are down 21% since the dual proposals were announced. And their average price-to-trailing-sales are down to 1.7x. </li>
</ul>


Back on the 22nd August 2025, SOE-backed Dongfeng Motor (489 HK) announced a privatisation; together with a concurrent listing of its EV arm, VOYAH. The two proposals are interconditional.
In its October application proof, VOYAH turned a profit in 7M25.  The market was implying a price-to-trailing-sales of 1.5x for VOYAH, versus the basket average of 2.1x. It's now ~1.2x.
Key PRC reg approvals (Mofcom/NDRC/SAFE) remain outstanding. Meanwhile, a basket of peers are down 21% since the dual proposals were announced. And their average price-to-trailing-sales are down to 1.7x. 


Dongfeng (489 HK): Revisiting VOYAH's Spin-Off Valuation

China Traditional Chinese Medicine / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a>  (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.</li>
<li>As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out why this got stonewalled?</li>
<li>This deal lapse changes the Hong Kong M&amp;A landscape; if you can't rely on SOE transactions to get up, what next?  The immediate question now is downside support on Monday.  </li>
</ul>



China Traditional Chinese Medicine (570 HK)  (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.
As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out why this got stonewalled?
This deal lapse changes the Hong Kong M&amp;A landscape; if you can't rely on SOE transactions to get up, what next?  The immediate question now is downside support on Monday.  


TCM (570 HK): Likely Rush for The Exits As Deal Busts

Hong Kong

China Traditional Chinese Medicine Co. Limited, through its subsidiaries, manufactures and sells medicine and pharmaceutical products in China.

China Traditional Chinese Medicine (570 HK)

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China Traditional Chinese Medicine (570 HK)

China TCM (570.HK) - Performance Is Expected to Rebound

The rise in China TCM’s share price recently is related to investors' renewed interest in betting on privatization as it has been a year since the...

Xinyao (Criss) Wang

China TCM (570.HK) - About the 25H1 Profit Warning and the Outlook

China TCM released weak 25H1 result,but it make investors reignite interest in betting on privatization/merger with Taiji.The Catalyst is CNPGC may...

Xinyao (Criss) Wang

China TCM (570.HK) - Updates on Performance Forecast and Valuation Outlook Based on 2024 Results

China TCM’s valuation hit RMB10 billion, in line with our analysis in the insight.As annual profit scale of RMB1bn is achievable, we think this is...

Xinyao (Criss) Wang

Dongfeng (489 HK): Revisiting VOYAH's Spin-Off Valuation

There's been a lot of enthusiasm for HK spin-offs of late, such as Zijin Mining and MINISO. I'm not convinced Dongfeng Motor deserves similar...

David Blennerhassett

TCM (570 HK): Likely Rush for The Exits As Deal Busts

How does a ~34% decline (in the morning session) stack up with past deal breaks in Hong Kong? It's not a clean comparative analysis, as past...

David Blennerhassett

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