HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Chongqing Taiji Industry (Group) A / Equity Bottom-Up

<ul>
<li>According to the disclosure in 25H1 report, CNPGC will still fulfill its commitment to resolving the issue of horizontal competition.So, the merger of China TCM and Taiji remains an option.</li>
<li>Although Taiji’s performance declined sharply in 25H1, the announcement of the stock repurchase indicates that the Company remains optimistic about its prospects and tries to protect the interests of shareholders.</li>
<li>There’s high possibility of performance recovery in 2026.In 2027, Taiji would enter a new round of growth. So, 2025 is the low point, which provides a good opportunity to buy.</li>
</ul>


According to the disclosure in 25H1 report, CNPGC will still fulfill its commitment to resolving the issue of horizontal competition.So, the merger of China TCM and Taiji remains an option.
Although Taiji’s performance declined sharply in 25H1, the announcement of the stock repurchase indicates that the Company remains optimistic about its prospects and tries to protect the interests of shareholders.
There’s high possibility of performance recovery in 2026.In 2027, Taiji would enter a new round of growth. So, 2025 is the low point, which provides a good opportunity to buy.


Chongqing Taiji Industry (Group) (600129.CH) 25H1- CNPGC Commits to Resolving Horizontal Competition

<ul>
<li>The current channel inventory digestion has been ongoing for nearly a year. If the terminal sales data in 25Q3 improves, it is expected to support the revenue recovery in 25Q4.</li>
<li>China TCM and CNPGC had signed relevant agreement on the free transfer of equity. Investors think this is paving the way for the future integration of China TCM and Taiji.</li>
<li>Investors have reignited interest in betting on China TCM's privatization and merger with Taiji .According to Taiji, CNPGC will still fulfill its commitment to resolving the issue of horizontal competition</li>
</ul>


The current channel inventory digestion has been ongoing for nearly a year. If the terminal sales data in 25Q3 improves, it is expected to support the revenue recovery in 25Q4.
China TCM and CNPGC had signed relevant agreement on the free transfer of equity. Investors think this is paving the way for the future integration of China TCM and Taiji.
Investors have reignited interest in betting on China TCM's privatization and merger with Taiji .According to Taiji, CNPGC will still fulfill its commitment to resolving the issue of horizontal competition


Chongqing Taiji Industry (Group) (600129 CH) - Investors Are Betting on the Merger with China TCM

China Traditional Chinese Medicine / Equity Bottom-Up

<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

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

China Traditional Chinese Medicine / Event-Driven

<ul>
<li>Shockingly, the Sinopharm-led consortium’s offer for <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> has lapsed as the precondition long stop date has not been extended.</li>
<li>This deal break caught many, including me, off guard. There are lessons to be learnt and questions to be asked. </li>
<li>Shareholders will have a bruising Monday. Our analysis suggests a deal break price of around HK$3.44, a 10% downside to the last close.</li>
</ul>


Shockingly, the Sinopharm-led consortium’s offer for China Traditional Chinese Medicine (570 HK) has lapsed as the precondition long stop date has not been extended.
This deal break caught many, including me, off guard. There are lessons to be learnt and questions to be asked. 
Shareholders will have a bruising Monday. Our analysis suggests a deal break price of around HK$3.44, a 10% downside to the last close.


China Traditional Chinese Medicine (570 HK): Disaster as Offer Lapses, Potential Deal Break Price

<ul>
<li>We once again heard privatization rumor of China TCM, but China TCM denied it at this stage. We still recommend investors to remain vigilant until receive definite official announcement.</li>
<li>One important background of privatization is the integration of SOE carried out in recent years. We do not rule out the possibility that Taiji Group would drive this privatization.</li>
<li>It may not be an optimal time for the proposal of privatization by major shareholders. Other shareholders may not want to give up high-quality stocks, which makes privatization challenging.</li>
</ul>


We once again heard privatization rumor of China TCM, but China TCM denied it at this stage. We still recommend investors to remain vigilant until receive definite official announcement.
One important background of privatization is the integration of SOE carried out in recent years. We do not rule out the possibility that Taiji Group would drive this privatization.
It may not be an optimal time for the proposal of privatization by major shareholders. Other shareholders may not want to give up high-quality stocks, which makes privatization challenging.


China Traditional Chinese Medicine (570.HK) - Will This Privatization Rumor Come True ?

China

Chongqing Taiji Industry (Group) Co., Ltd. manufactures and markets medicines, healthcare products, medical packing products, and medical instruments.  The Company also imports and exports Chinese medicine materials and medical packing materials.

Chongqing Taiji Industry (Group) A (600129 CH)

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Chongqing Taiji Industry (Group) A (600129 CH)

Chongqing Taiji Industry (Group) (600129.CH) 25H1- CNPGC Commits to Resolving Horizontal Competition

According to 25H1 report, CNPGC will fulfill its commitment to resolving the issue of horizontal competition. So, the merger of China TCM and Taiji...

Xinyao (Criss) Wang

Chongqing Taiji Industry (Group) (600129 CH) - Investors Are Betting on the Merger with China TCM

Ongoing channel inventory digestion may lead to revenue recovery in 25Q4. Investors anticipate China TCM's merger with Taiji after China TCM and...

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 Traditional Chinese Medicine (570 HK): Disaster as Offer Lapses, Potential Deal Break Price

This deal break caught many, including me, off guard. There are lessons to be learnt and questions to be asked. Shareholders will have a bruising...

Arun George

China Traditional Chinese Medicine (570.HK) - Will This Privatization Rumor Come True ?

We once again heard privatization rumor of China TCM.Considering the integration trend of SOE, privatization is always in the plan of CNPGC, but we...

Xinyao (Criss) Wang

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