Transport Sector, China and Asia-focused Research

Charles De Trenck

Thematic (Sector/Industry)

This is an invest-able idea at the private level  with long term benefits. Both for the body, and for other ideas as well.Ever since I turned over a new leaf vis a vis health five plus years ago, I have explored active alternative health solutions. I have a long list of things I have solved and people I have seen gain real improvements from alternative treatments.  I have seen real growth in options to treatment of severe conditions.Most interesting perhaps has been learning about the benefits…

This is an invest-able idea at the private level  with long term benefits. Both for the body, and for other ideas as well.Ever since I turned over a new leaf vis a vis health five plus years ago, I have explored active alternative health solutions. I have a long list of things I have solved and people I have seen gain real improvements from alternative treatments.  I have seen real growth in options to treatment of severe conditions.Most interesting perhaps has been learning about the benefits…

Energy Medicine. Personal Experience. Impact. Growth in Asia. Ideas

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

<ul><li>From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. </li><li>For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.</li><li>Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. </li></ul>

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. 

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

China Traditional Chinese Medicine / Equity Bottom-Up

We want to highlight some recent pieces of information that suggest that the company (and stock) should perform better from here. First, some of the drags on 2015's performance look transient in nature. Second, the company has repurchased shares in the open market during the last few trading days.Management went on an NDR with UOB in Shanghai recently, and mentioned the following details relative to 2015's performance:<ol><li>Bi Yan Kang's (6% of 2015 revenue/9% of 2014 revenue) channel inventories were…</li></ol>

We want to highlight some recent pieces of information that suggest that the company (and stock) should perform better from here. First, some of the drags on 2015's performance look transient in nature. Second, the company has repurchased shares in the open market during the last few trading days.Management went on an NDR with UOB in Shanghai recently, and mentioned the following details relative to 2015's performance:Bi Yan Kang's (6% of 2015 revenue/9% of 2014 revenue) channel inventories were…

China TCM's 2015 results met expectations (operating profit +56%/EPS +3%), but the shares have declined by roughly 11% in response to very tepid (+3% revenue/+2% operating income) organic growth. Despite the near standstill in organic growth, 2016 and 2017 EPS estimates remain stable.  In addition, recent tender results in Guangxi and Tianjin were better than in prior tenders, suggesting that pricing may have stabilized.The shares now trade at less than 12x 2016E EPS of RMB0.28, and are very attractive at these levels.

China TCM's 2015 results met expectations (operating profit +56%/EPS +3%), but the shares have declined by roughly 11% in response to very tepid (+3% revenue/+2% operating income) organic growth. Despite the near standstill in organic growth, 2016 and 2017 EPS estimates remain stable.  In addition, recent tender results in Guangxi and Tianjin were better than in prior tenders, suggesting that pricing may have stabilized.The shares now trade at less than 12x 2016E EPS of RMB0.28, and are very attractive at these levels.  

China TCM has issued a positive profit warning (attached) for the year ended 31 December 2015:<ul>
<li>Increase in net income of "not less than 50%" over 2014's RMB413 million. Consensus expectations for 2015 are RMB624 million (+51%), suggesting at least in-line or possibly better results.</li>
<li>Management noted the acquisition of Jiangyin Tianjiang Pharmaceutical and a gain on the sale of equity in a subsidiary as the drivers, but did not provide details.</li>
<li>No comment on revenue: stable organic growth had been…</li>
</ul>

China TCM has issued a positive profit warning (attached) for the year ended 31 December 2015:
Increase in net income of "not less than 50%" over 2014's RMB413 million. Consensus expectations for 2015 are RMB624 million (+51%), suggesting at least in-line or possibly better results.
Management noted the acquisition of Jiangyin Tianjiang Pharmaceutical and a gain on the sale of equity in a subsidiary as the drivers, but did not provide details.
No comment on revenue: stable organic growth had been…


Positive Profit Warning Suggests In-Line Results

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)

Energy Medicine. Personal Experience. Impact. Growth in Asia. Ideas

This is an invest-able idea at the private level with long term benefits. Both for the body, and for other ideas as well.Ever since I turned over...

Charles De Trenck

Key Drivers of Asia's Healthcare Sector

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and...

Singapore Exchange Ltd (SGX)

Positive Tidbits to Consider

We want to highlight some recent pieces of information that suggest that the company (and stock) should perform better from here. First, some of...

Kemp Dolliver, CFA

Results In Line, But Weak Organic Growth

China TCM's 2015 results met expectations (operating profit +56%/EPS +3%), but the shares have declined by roughly 11% in response to very tepid...

Kemp Dolliver, CFA

Positive Profit Warning Suggests In-Line Results

China TCM has issued a positive profit warning (attached) for the year ended 31 December 2015: Increase in net income of "not less than 50%" over...

Kemp Dolliver, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)