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

China Traditional Chinese Medicine (570 HK)

<ul>
<li>Bloomberg reports that Sinopharm is reviving its interest in privatising <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>/CTCM. Sinopharm has contacted banks about financing and is considering partnering with other investors.</li>
<li>Sinopharm’s best bet is to partner with <a href="https://www.smartkarma.com/entities/ping-an-insurance-group-co-of-c2975d60-47cd-4246-a7a6-25297586242b" target="_blank" data-smartkarma-citation="entities:24682:1" rel="noopener">Ping An Insurance Group of (601318 CH)</a> and privatise through a scheme. In this scenario, no disinterested shareholder would hold a blocking stake.</li>
<li>Due to Sinopharm's previous privatisation attempts, shareholders will be wary of the latest rumour. Nevertheless, the valuation is undemanding compared to peer multiples.</li>
</ul>


Bloomberg reports that Sinopharm is reviving its interest in privatising China Traditional Chinese Medicine (570 HK)/CTCM. Sinopharm has contacted banks about financing and is considering partnering with other investors.
Sinopharm’s best bet is to partner with Ping An Insurance Group of (601318 CH) and privatise through a scheme. In this scenario, no disinterested shareholder would hold a blocking stake.
Due to Sinopharm's previous privatisation attempts, shareholders will be wary of the latest rumour. Nevertheless, the valuation is undemanding compared to peer multiples.


China Traditional Chinese Med (570 HK): Third Time's the Charm as Sinopharm Revives Its Interest?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Despite unfriendly external environment in 2022, <a href="https://www.smartkarma.com/entities/consun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:1261:1" rel="noopener">Consun Pharmaceutical (1681 HK)</a> still achieved stable performance growth. The Company has maintained a consistently high level of dividend payout, which is commendable.</li>
<li>The rapid sales expansion of commercialized products has laid the foundation for the high-quality growth of Consun, and the continuously improving profitability further confirms its growth certainty.</li>
<li>Based on the current market value, we think Consun is undervalued considering its RMB3 billion cash balance by 2022. It is expected to usher in valuation repair in the future.</li>
</ul>


Despite unfriendly external environment in 2022, Consun Pharmaceutical (1681 HK) still achieved stable performance growth. The Company has maintained a consistently high level of dividend payout, which is commendable.
The rapid sales expansion of commercialized products has laid the foundation for the high-quality growth of Consun, and the continuously improving profitability further confirms its growth certainty.
Based on the current market value, we think Consun is undervalued considering its RMB3 billion cash balance by 2022. It is expected to usher in valuation repair in the future.


Consun Pharmaceutical (1681.HK) - Undervalued. Good Performance Growth Will Continue

<ul>
<li>The potential high-priced acquisition proposed by Wepon failed. In fact, Wepon is in a vicious circle. So, terminating the acquisition is not a bad thing for <a href="https://www.smartkarma.com/entities/consun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:1261:1" rel="noopener">Consun Pharmaceutical (1681 HK)</a>.</li>
<li>Consun kept positive momentum and its performance was strong in 22H1. Such growth is expected to continue after China reopens as non-COVID related medical demand returns to normal.</li>
<li>Considering its solid business performance and large cash balance, Consun is obviously undervalued. In our view, even without Wepon’s deal as the catalyst, Consun still has investment value.</li>
</ul>


The potential high-priced acquisition proposed by Wepon failed. In fact, Wepon is in a vicious circle. So, terminating the acquisition is not a bad thing for Consun Pharmaceutical (1681 HK).
Consun kept positive momentum and its performance was strong in 22H1. Such growth is expected to continue after China reopens as non-COVID related medical demand returns to normal.
Considering its solid business performance and large cash balance, Consun is obviously undervalued. In our view, even without Wepon’s deal as the catalyst, Consun still has investment value.


Consun Pharmaceutical (1681.HK) - Still Has Investment Value Even Without High-Priced Acquisition

Independent Research, Turtles all the way down

Turtles all the way down

Independent Research

Writing short articles about mis-priced boring stocks around the world.

<ul><li>111, inc (YI) has run up to $3.25. For a spread of only about 11%.</li><li>Which is not all that attractive since there is no definitive agreement signed. So I am closing it with a quick 13% gain here.</li><li>These Chinese merger situations sometimes randomly spike up, and I think it is wise to trade around them when upside isn’t as juicy anymore.</li></ul>

111, inc (YI) has run up to $3.25. For a spread of only about 11%.Which is not all that attractive since there is no definitive agreement signed. So I am closing it with a quick 13% gain here.These Chinese merger situations sometimes randomly spike up, and I think it is wise to trade around them when upside isn’t as juicy anymore.

<ul><li>Early this year I was quite pessimistic on Hong Kong stocks.</li><li>But since then the Hang Seng is down another 20% or so. A lot of stocks with 9-10%+ dividend yields are laying around.</li><li>I should have been a bit quicker writing this up, but then you are getting it for free.</li></ul>

Early this year I was quite pessimistic on Hong Kong stocks.But since then the Hang Seng is down another 20% or so. A lot of stocks with 9-10%+ dividend yields are laying around.I should have been a bit quicker writing this up, but then you are getting it for free.

China

Consun Pharmaceutical Group is a modern pharmaceutical enterprise engaged in the research, development, production, and marketing of modern Chinese medicines and medical imaging contrast mediums. It also manufactures and sells traditional Chinese medicines. Key products include Uremic Clearance Granule for kidney disease, Gadopentetate Dimeglumine Injection as a medical contrast medium, and Iron Dextran Oral Solution. The company was founded in 1997 and is headquartered in Guangzhou, China.

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Consun Pharmaceutical (1681 HK)

China Traditional Chinese Med (570 HK): Third Time's the Charm as Sinopharm Revives Its Interest?

Due to Sinopharm's previous privatisation attempts, shareholders will be wary of the latest rumour. Nevertheless, the valuation is undemanding...

Arun George