HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Concord Healthcare Group / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/concord-healthcare-group" target="_blank" data-smartkarma-citation="entities:36005:1" rel="noopener">Concord Healthcare Group (CHG HK)</a>’s hospital business is not strong enough to contribute strong performance consistently, leading to unsatisfactory profit margin considering its weak hospital operation and management capability.</li>
<li>The network business could face some legal risks based on our analysis. In the context of anti-corruption campaign in China healthcare, Concord's business and patients flow could be affected.</li>
<li>Together with potential policy risks such as DRGs/centralized procurement, we tend to be conservative about Concord’s outlook. In terms of valuation, Concord’s valuation should be lower than Inkon Life Technology.</li>
</ul>



Concord Healthcare Group (CHG HK)’s hospital business is not strong enough to contribute strong performance consistently, leading to unsatisfactory profit margin considering its weak hospital operation and management capability.
The network business could face some legal risks based on our analysis. In the context of anti-corruption campaign in China healthcare, Concord's business and patients flow could be affected.
Together with potential policy risks such as DRGs/centralized procurement, we tend to be conservative about Concord’s outlook. In terms of valuation, Concord’s valuation should be lower than Inkon Life Technology.


Pre-IPO Concord Healthcare Group - Business Challenges Are Greater than Expected

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The coming week has the rebalance implementation for the NIFTY family of indices on Thursday and the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> on Friday.</li>
<li>The review period for the December rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index</a> and the HSCI Index ends on Friday.</li>
<li>Inflows to mainland China ETFs resumed following a pause as markets continue to trade weak.</li>
</ul>


The coming week has the rebalance implementation for the NIFTY family of indices on Thursday and the Nikkei 225 (NKY INDEX) on Friday.
The review period for the December rebalance of the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng TECH Index and the HSCI Index ends on Friday.
Inflows to mainland China ETFs resumed following a pause as markets continue to trade weak.


Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP

Shulan Health Management / Equity Capital Markets

<ul>
<li>Private general hospitals are the core business of Shulan, but the business model for general hospitals is not good - heavy assets, challenging operations, low profits, difficult to expand nationwide. </li>
<li>Even with the endorsement of renowned academician Dr. Li Lanjuan, whether Shulan's hospitals can attract constantly sufficient patient flow remains a question. Most patients still prioritize public hospitals for treatment.</li>
<li>Due to the lack of solid profit model and expansion model, we're not optimistic about Shulan's profitability and future financial performance. Shulan may be in a state of long-term loss.</li>
</ul>


Private general hospitals are the core business of Shulan, but the business model for general hospitals is not good - heavy assets, challenging operations, low profits, difficult to expand nationwide. 
Even with the endorsement of renowned academician Dr. Li Lanjuan, whether Shulan's hospitals can attract constantly sufficient patient flow remains a question. Most patients still prioritize public hospitals for treatment.
Due to the lack of solid profit model and expansion model, we're not optimistic about Shulan's profitability and future financial performance. Shulan may be in a state of long-term loss.


Pre-IPO Shulan Health Management - Hard to Bring Investors Expected Returns Due to Poor Profit Model

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outflows, and holding by mainland investors.</li>
<li>We highlight inflows into Meituan, CCB, China Mobile, CNOOC, HKEX.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outflows, and holding by mainland investors.
We highlight inflows into Meituan, CCB, China Mobile, CNOOC, HKEX.


Hong Kong Connect Flows (August): $8.8bn Outflows

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sinopharm-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:32:1" rel="noopener">Sinopharm Group Co Ltd H (1099 HK)</a> will be added to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> on 1 September while <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a> will be deleted.</li>
<li>Both changes are a surprise, but the impact on <a href="https://www.smartkarma.com/entities/sinopharm-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:32:1" rel="noopener">Sinopharm Group Co Ltd H (1099 HK)</a> will be much larger. Given the recent increase in shorts, there could be covering.</li>
<li>Estimated one-way turnover is 1.9% leading to a one-way trade of HK$3.65bn. Capping will result in selling on <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC (5 HK)</a>. </li>
</ul>



Sinopharm Group Co Ltd H (1099 HK) will be added to the Hang Seng Index (HSI INDEX) on 1 September while Country Garden Holdings Co (2007 HK) will be deleted.
Both changes are a surprise, but the impact on Sinopharm Group Co Ltd H (1099 HK) will be much larger. Given the recent increase in shorts, there could be covering.
Estimated one-way turnover is 1.9% leading to a one-way trade of HK$3.65bn. Capping will result in selling on Alibaba Group Holding (9988 HK), Tencent (700 HK) and HSBC (5 HK). 


Hang Seng Index Rebalance: Sinopharm (1099 HK) Added, Country Garden (2007 HK) Deleted

China

Hygeia Healthcare is a prominent oncology healthcare group in China, dedicated to enhancing the accessibility and affordability of cancer treatment services. The company operates a network of oncology hospitals, providing comprehensive services from screening and diagnosis to various treatment modalities like chemotherapy, immunotherapy, and radiotherapy. It also offers radiotherapy consulting and equipment licensing. Hygeia Healthcare was founded in 2009 and is headquartered in Shanghai, China.

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Hygeia Healthcare (6078 HK)

Pre-IPO Concord Healthcare Group - Business Challenges Are Greater than Expected

Concord’s profit margin is unsatisfactory due to inadequate operational management capability. Its future growth outlook is uncertain.The Company...

Xinyao (Criss) Wang

Index Rebalance & ETF Flow Recap: HSI, HSCI, ASX, SET50, Wharf, SK Tel, Tata Motors, Midea, PCOMP

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Pre-IPO Shulan Health Management - Hard to Bring Investors Expected Returns Due to Poor Profit Model

Even with the endorsement of renowned academician Dr. Li Lanjuan, Shulan's profitability/national expansion ability remain a concern.Investors...

Xinyao (Criss) Wang

Hong Kong Connect Flows (August): $8.8bn Outflows

We analyzed the Hong Kong Connect Scheme for the month of August and highlight flows for Meituan, CCB, China Mobile, CNOOC, HKEX.

Ke Yan, CFA, FRM

Hang Seng Index Rebalance: Sinopharm (1099 HK) Added, Country Garden (2007 HK) Deleted

Sinopharm will replace CountryGarden in the HSI at the close on 1 Sep. There will be selling in Alibaba, Tencent and HSBC due to capping. Shorts...

Brian Freitas

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