HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

Shanghai RAAS Blood Products C / Event-Driven

<ul>
<li>Geopolitical risks have led to foreign companies planning to withdraw from China.It’s also difficult to allow foreign companies to control China’s core strategic assets.So, Grifols and RAAS’ “breakup” is inevitable.</li>
<li>This acquisition is an important milestone in the development of Haier’s big health industry. RAAS’s valuation also has room to rise further after being acquire by Haier due to synergies.</li>
<li>In the case of slowing growth in the home appliance market, this is a wise move for Haier.However, potential goodwill impairment in GDS is a risk for Haier/RAAS and investors.</li>
</ul>


Geopolitical risks have led to foreign companies planning to withdraw from China.It’s also difficult to allow foreign companies to control China’s core strategic assets.So, Grifols and RAAS’ “breakup” is inevitable.
This acquisition is an important milestone in the development of Haier’s big health industry. RAAS’s valuation also has room to rise further after being acquire by Haier due to synergies.
In the case of slowing growth in the home appliance market, this is a wise move for Haier.However, potential goodwill impairment in GDS is a risk for Haier/RAAS and investors.


Haier Group to Buy $1.8B Stake in Shanghai RAAS from Grifols – A New Chapter Begins

Thematic (Sector/Industry)

<ul>
<li>The anti-corruption campaign has significantly accelerated since the beginning of this year. After Central Commission for Discipline Inspection has been involved, the anti-corruption efforts in pharmaceutical/device sectors would be unprecedented.</li>
<li>The main targets are leaders of hospitals/governments. The impact of anti-corruption on companies is indirect. As long as senior management are not investigated/arrested, the impact on stock price isn’t significant.</li>
<li>However, investors not only need to consider the problem of sales growth slowing down in the context of anti-corruption, but also consider whether companies is engaging in financial fraud. </li>
</ul>


The anti-corruption campaign has significantly accelerated since the beginning of this year. After Central Commission for Discipline Inspection has been involved, the anti-corruption efforts in pharmaceutical/device sectors would be unprecedented.
The main targets are leaders of hospitals/governments. The impact of anti-corruption on companies is indirect. As long as senior management are not investigated/arrested, the impact on stock price isn’t significant.
However, investors not only need to consider the problem of sales growth slowing down in the context of anti-corruption, but also consider whether companies is engaging in financial fraud. 


Anti-Corruption in China Healthcare – the Impact and the Outlook

Equity Bottom-Up

Clover Biopharmaceuticals / Equity Bottom-Up

<ul>
<li>The General Office of National Health Commission issued a notice on further strengthening the management of clinical medication for children. Pediatric TCM is more popular, with decent growth potential.</li>
<li>Long-Term money choosing to leave A-share isn't due to geopolitical risks. If outlook isn't good, the logic of capital's allocation in A-share isn't based on promising growth, but on liquidity instead.</li>
<li>We analyzed key points of <a href="https://www.smartkarma.com/entities/clover-biopharmaceuticals-ltd" target="_blank" data-smartkarma-citation="entities:33029:1" rel="noopener">Clover Biopharmaceuticals (2197 HK)</a>. The Company has entered a vicious cycle. If Clover is abandoned by the market, it will lead to lack of liquidity.</li>
</ul>


The General Office of National Health Commission issued a notice on further strengthening the management of clinical medication for children. Pediatric TCM is more popular, with decent growth potential.
Long-Term money choosing to leave A-share isn't due to geopolitical risks. If outlook isn't good, the logic of capital's allocation in A-share isn't based on promising growth, but on liquidity instead.
We analyzed key points of Clover Biopharmaceuticals (2197 HK). The Company has entered a vicious cycle. If Clover is abandoned by the market, it will lead to lack of liquidity.


China Healthcare Weekly (Jun.9) - Pediatric TCM New Policy, Long-Term Money Dislikes A-Share, Clover

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of April 6th.</li>
<li>We estimate the weekly outflows to be US$412.5 million, led by information technology, materials, and offset by financials, consumer staples, industrials.</li>
<li>We highlight flows for East Money Information, Muyuan Foods, China Tourism Group Duty Free, Ping An Insurance, Hundsun Technologies, China Merchants Bank, Foxconn Industrial Internet.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of April 6th.
We estimate the weekly outflows to be US$412.5 million, led by information technology, materials, and offset by financials, consumer staples, industrials.
We highlight flows for East Money Information, Muyuan Foods, China Tourism Group Duty Free, Ping An Insurance, Hundsun Technologies, China Merchants Bank, Foxconn Industrial Internet.


Northbound Flows (Apr 6th): East Money, Muyuan Foods, CTG, Ping An Insurance, Hundsun, CMB, Foxconn

Beijing Tiantan Biological Products / Equity Bottom-Up

<ul>
<li>Tiantan is a good defensive investment target in unfriendly external environment to control the pullback due to its advantageous background and resources, but its profit margin/efficiency needs to improve. </li>
<li>After a large performance decline in Q1, Tiantan recovered well in Q2, but due to the pandemic and some acquisitions/resource integration, its profit performance declined in Q3. </li>
<li>Tiantan’s performance growth is expected to slow down in 2022, with single-digit YoY revenue growth. Accordingly, the current valuation may have overdrawn certainty.</li>
</ul>


Tiantan is a good defensive investment target in unfriendly external environment to control the pullback due to its advantageous background and resources, but its profit margin/efficiency needs to improve. 
After a large performance decline in Q1, Tiantan recovered well in Q2, but due to the pandemic and some acquisitions/resource integration, its profit performance declined in Q3. 
Tiantan’s performance growth is expected to slow down in 2022, with single-digit YoY revenue growth. Accordingly, the current valuation may have overdrawn certainty.


Beijing Tiantan Biological Products (600161CH)-A Good Defensive Investment Target but May Overvalued

China

Hualan Biological Engineering Inc. produces and markets human serum albumin (HSA), gamma globulin, frozen prothrombin (PCC), and other related biological products.

Hualan Biological Engineering (002007 CH)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Hualan Biological Engineering (002007 CH)

Haier Group to Buy $1.8B Stake in Shanghai RAAS from Grifols – A New Chapter Begins

We analyzed the key points/logic behind Haier's decision to acquire Shanghai RAAS from Grifols. Despite potential risks, it is still a wise move...

Xinyao (Criss) Wang

Anti-Corruption in China Healthcare – the Impact and the Outlook

The share prices of China healthcare are now plummeting due to anti-corruption campaign, which will reach a climax in 23H2 (We'll post updates in...

Xinyao (Criss) Wang

Northbound Flows (Apr 6th): East Money, Muyuan Foods, CTG, Ping An Insurance, Hundsun, CMB, Foxconn

We analyzed the Shanghai/Shenzhen Connect Scheme for last week and highlight flows for East Money, Muyuan Foods, CTG, Ping An Insurance, Hundsun,...

Ke Yan, CFA, FRM

Beijing Tiantan Biological Products (600161CH)-A Good Defensive Investment Target but May Overvalued

Tiantan is a good defensive target in unfriendly external macro due to its advantageous background, but performance growth would slow down in 2022....

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Haier Group to Buy $1.8B Stake in Shanghai RAAS from Grifols – A New Chapter Begins

We analyzed the key points/logic behind Haier's decision to acquire Shanghai RAAS from Grifols. Despite potential risks, it is still a wise move...

Xinyao (Criss) Wang

Anti-Corruption in China Healthcare – the Impact and the Outlook

The share prices of China healthcare are now plummeting due to anti-corruption campaign, which will reach a climax in 23H2 (We'll post updates in...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun.9) - Pediatric TCM New Policy, Long-Term Money Dislikes A-Share, Clover

New policy for pediatric TCM is released,indicating good growth potential.Long-term money dislike A-share,mainly due to concerns on growth not...

Xinyao (Criss) Wang

Northbound Flows (Apr 6th): East Money, Muyuan Foods, CTG, Ping An Insurance, Hundsun, CMB, Foxconn

We analyzed the Shanghai/Shenzhen Connect Scheme for last week and highlight flows for East Money, Muyuan Foods, CTG, Ping An Insurance, Hundsun,...

Ke Yan, CFA, FRM

Beijing Tiantan Biological Products (600161CH)-A Good Defensive Investment Target but May Overvalued

Tiantan is a good defensive target in unfriendly external macro due to its advantageous background, but performance growth would slow down in 2022....

Xinyao (Criss) Wang