Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

China Resources Pharmaceutical / Equity Bottom-Up

Recall that E-Jiao, a Traditional Chinese Medicine made from donkey skin, is one of <a href="https://www.smartkarma.com/entities/22928" target="_blank" data-smartkarma-citation="entities:22928:1">China Resources Pharmaceutical Group (3320 HK)</a> 's leading products in the manufacturing segment. We estimate that E-Jiao generates about 20% of the segment's revenue and a higher percentage of profits. The manufacturing segment generates roughly 50% of the company's operating profit. The Insight Stream provides background on the company and product.People for the Ethical Treatment of Animals (PETA) started a…

Recall that E-Jiao, a Traditional Chinese Medicine made from donkey skin, is one of China Resources Pharmaceutical Group (3320 HK) 's leading products in the manufacturing segment. We estimate that E-Jiao generates about 20% of the segment's revenue and a higher percentage of profits. The manufacturing segment generates roughly 50% of the company's operating profit. The Insight Stream provides background on the company and product.People for the Ethical Treatment of Animals (PETA) started a…

"Donkey Skin" Rhymes With "Shark Fin" Update

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading product is its E-Jiao series of OTC products that generated HKD5 billion of revenue (only 3% of revenue, but probably around 10% of profits). We noted in our prior Insights on the company that one emerging risk to the story is the increasing shortage of donkeys globally and the potential impact on public opinion.  The South China Morning Post is running an in-depth story on E-Jiao products and their impact on the global donkey herd.  Public outcry over the treatment of donkeys could lead to boycotts, as seen with shark fin soup.

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading product is its E-Jiao series of OTC products that generated HKD5 billion of revenue (only 3% of revenue, but probably around 10% of profits). We noted in our prior Insights on the company that one emerging risk to the story is the increasing shortage of donkeys globally and the potential impact on public opinion.  The South China Morning Post is running an in-depth story on E-Jiao products and their impact on the global donkey herd.  Public outcry over the treatment of donkeys could lead to boycotts, as seen with shark fin soup. 

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.

Thematic (Sector/Industry)

<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. 

Equity Capital Markets

China Resources Pharmaceutical / Equity Capital Markets

This Insight follows up on our three prior Insights on the company. Here we discuss our opinion of the offering; additional details from the PHIP; and topics of discussion for the roadshow. We should note that we have not seen a pre-deal report or the roadshow presentation. You should refer to <a href="https://www.smartkarma.com/profiles/673" target="_blank" data-smartkarma-citation="accounts:673">Toh Zhen Zhou</a> 's Insight that reviews the offering using the IPO Analyzer.We are lukewarm on the offering. The company has an interesting position in the pharmaceutical value chain, but has reported only modest organic growth during the Track Record Period.  The proposed valuation appears to reflects this. There is a potential arbitrage opportunity (if in name only) at the lower end of the proposed price range to buy shares of the listed subsidiaries at a discount. <a href="https://www.smartkarma.com/profiles/673" target="_blank" data-smartkarma-citation="accounts:673">Toh Zhen Zhou</a> 's Insight discusses this in detail.

This Insight follows up on our three prior Insights on the company. Here we discuss our opinion of the offering; additional details from the PHIP; and topics of discussion for the roadshow. We should note that we have not seen a pre-deal report or the roadshow presentation. You should refer to Toh Zhen Zhou 's Insight that reviews the offering using the IPO Analyzer.We are lukewarm on the offering. The company has an interesting position in the pharmaceutical value chain, but has reported only modest organic growth during the Track Record Period.  The proposed valuation appears to reflects this. There is a potential arbitrage opportunity (if in name only) at the lower end of the proposed price range to buy shares of the listed subsidiaries at a discount. Toh Zhen Zhou 's Insight discusses this in detail. 

Bespoke Research on China and neighbouring regions, Bixmoor

Bixmoor

Bespoke Research on China and neighbouring regions

Bixmoor specialises in providing bespoke research to business, governments and the financial community on China and neighbouring regions. We seek to build long-term relationships with our clients, based on our expertise, our reliability and our determination to find the right solution.

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of urban living mean that existing policies are unlikely to deliver a baby boom.

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of urban living mean that existing policies are unlikely to deliver a baby boom.

Falling Fertility Adds to China's Population Woes

China

Dong-E-E-Jiao Co., Ltd. primarily manufactures and sells traditional Chinese medicine, health care products, health foods, and bio-medicine. The company also engages in gelatin products manufacturing.

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Dong E E Jiaoco Ltd A (000423 CH)

"Donkey Skin" Rhymes With "Shark Fin" Update

Recall that E-Jiao, a Traditional Chinese Medicine made from donkey skin, is one of China Resources Pharmaceutical Group (3320 HK) 's leading...

Kemp Dolliver, CFA

"Donkey Skin" Rhymes With "Shark Fin"

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading...

Kemp Dolliver, CFA

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)

CR Pharma: New Details, Final Thoughts

This Insight follows up on our three prior Insights on the company. Here we discuss our opinion of the offering; additional details from the PHIP;...

Kemp Dolliver, CFA

Falling Fertility Adds to China's Population Woes

By allowing couples to have up to two children China hopes to reverse its likely population decline. But falling fertility and the pressures of...

Bixmoor

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