HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Hygeia Healthcare Group / Equity Capital Markets

<ul>
<li>The government has changed its tone and started to encourage social capital to run hospitals, indicating that the previous concerns about the policy risk on Hygeia has been relieved.</li>
<li>At this stage, Hygeia has more investment value, greater expansion space and higher market demand than <a href="https://www.smartkarma.com/entities/aier-eye-hospital-group-co-ltd" target="_blank" data-smartkarma-citation="entities:1103:1" rel="noopener">Aier Eye Hospital</a>. Meanwhile, the Company performs better in trans provincial expansion than Topchoice. </li>
<li>Due to large investment/“heavy asset” model, Hygeia would continue to face capital pressure. Its expansion pace may not be as fast as expected if it hopes to control expansion quality. </li>
</ul>


The government has changed its tone and started to encourage social capital to run hospitals, indicating that the previous concerns about the policy risk on Hygeia has been relieved.
At this stage, Hygeia has more investment value, greater expansion space and higher market demand than Aier Eye Hospital. Meanwhile, the Company performs better in trans provincial expansion than Topchoice. 
Due to large investment/“heavy asset” model, Hygeia would continue to face capital pressure. Its expansion pace may not be as fast as expected if it hopes to control expansion quality. 


Hygeia Healthcare Placement (6078.HK)- The Prospect Is More Certain After the Policy Risk Is Removed

Thematic (Sector/Industry)

<ul>
<li>National Health Commission reiterated that the number of ICU beds in designated hospitals should reach 10% of total beds, but we think the expansion/construction of ICU should be treated rationally. </li>
<li>The medical demand in 2020-2022 was very abnormal. If demand returns to normal in 2023H2, the overall growth of the healthcare industry would return to natural growth.</li>
<li>Among the 53 companies listed under Chapter 18A, there’re less than 15 companies that are really seriously developing drugs/devices, which could be the fundamental reason for big differentiation of valuation.</li>
</ul>


National Health Commission reiterated that the number of ICU beds in designated hospitals should reach 10% of total beds, but we think the expansion/construction of ICU should be treated rationally. 
The medical demand in 2020-2022 was very abnormal. If demand returns to normal in 2023H2, the overall growth of the healthcare industry would return to natural growth.
Among the 53 companies listed under Chapter 18A, there’re less than 15 companies that are really seriously developing drugs/devices, which could be the fundamental reason for big differentiation of valuation.


China Healthcare Weekly (Dec.16) - ICU Expansion, Abnormal Medical Demand, Dying Chapter 18A of HKEX

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.

Equity Bottom-Up

Jinxin Fertility Group  / Equity Bottom-Up

<ul>
<li>Jinxin Fertility is a leading IVF service provider in China. It has done a series of M&amp;A in the past two years.</li>
<li>We examine the thesis of the company for a trade into 2023.</li>
<li>We believe the company has big potential to realize its synergy post acquisition and ramp up post expansion. More favorable policy to come.</li>
</ul>


Jinxin Fertility is a leading IVF service provider in China. It has done a series of M&amp;A in the past two years.
We examine the thesis of the company for a trade into 2023.
We believe the company has big potential to realize its synergy post acquisition and ramp up post expansion. More favorable policy to come.


Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Sep 30th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in CSPC Pharma, Hygeia, GCL Technology, SHK Properties, Techtronic.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Sep 30th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in CSPC Pharma, Hygeia, GCL Technology, SHK Properties, Techtronic.


HK Short Interest Weekly: CSPC Pharma, Hygeia, GCL Technology, SHK Properties, Techtronic

Hygeia Healthcare Group / Equity Bottom-Up

<ul>
<li>Hygeia had good performance in 2022H1,mainly because its business layout is mostly in lower-tier cities and its medical services belong to rigid demand. So, the impact of pandemic was limited.</li>
<li>Hygeia is better than Topchoice and Aier Eye Hospital. The business model of specialized hospital is better than that of general hospital. Among for-profit hospitals, we are bullish on Hygeia.</li>
<li>We think Hygeia will keep strong growth momentum in the future due to high demand. But pandemic and policy risk would weigh on valuations/sustainable bullish sentiment. Short-term trades are recommended.</li>
</ul>


Hygeia had good performance in 2022H1,mainly because its business layout is mostly in lower-tier cities and its medical services belong to rigid demand. So, the impact of pandemic was limited.
Hygeia is better than Topchoice and Aier Eye Hospital. The business model of specialized hospital is better than that of general hospital. Among for-profit hospitals, we are bullish on Hygeia.
We think Hygeia will keep strong growth momentum in the future due to high demand. But pandemic and policy risk would weigh on valuations/sustainable bullish sentiment. Short-term trades are recommended.


Hygeia Healthcare Group (6078.HK) 22H1 - The Logic and the Outlook

China

Hygeia is a China based oncology healthcare group.

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Hygeia Healthcare Group (6078 HK)

Hygeia Healthcare Placement (6078.HK)- The Prospect Is More Certain After the Policy Risk Is Removed

The government has changed its tone to encourage social capital to run hospitals. So, policy risk is removed. Hygeia has more expansion space...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.16) - ICU Expansion, Abnormal Medical Demand, Dying Chapter 18A of HKEX

Investor should treat ICU expansion rationally due to staff shortage. Demand during COVID was abnormal, which may have natural growth in 23H2. IPO...

Xinyao (Criss) Wang

2023 High Conviction: Jinxin Fertility

Jinxin Fertility is a leading IVF service provider in China. It has done a series of M&A in the past two years. We examine the thesis of the...

Ke Yan, CFA, FRM

HK Short Interest Weekly: CSPC Pharma, Hygeia, GCL Technology, SHK Properties, Techtronic

We analyzed the latest HK SFC report for aggregate short position and highlight short interest changes in CSPC Pharma, Hygeia, GCL Technology, SHK...

Ke Yan, CFA, FRM

Hygeia Healthcare Group (6078.HK) 22H1 - The Logic and the Outlook

Hygeia's business layout is in lower-tier city and its medical service belong to rigid demand,making business volume more stable.It's our top pick...

Xinyao (Criss) Wang

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