HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.</li>
<li>CDE will move closer to the FDA's standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.</li>
<li>We analyzed some key points about <a href="https://www.smartkarma.com/entities/hua-medicine" target="_blank" data-smartkarma-citation="entities:27410:1" rel="noopener">Hua Medicine Ltd (2552 HK)</a>. We think its core drug Dorzagliatin still has many uncertainties that are worth investors' attention.</li>
</ul>


The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.
CDE will move closer to the FDA's standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.
We analyzed some key points about Hua Medicine Ltd (2552 HK). We think its core drug Dorzagliatin still has many uncertainties that are worth investors' attention.


China Healthcare Weekly (Jun.23) - National TCM VBP Results, CDE Changes Game Rule, Hua Medicine

Thematic (Sector/Industry)

<ul>
<li>SVB has special institutions in China and its business mode is Venture Lending. The closure of SVB could make it harder for Chinese startups to raise money from US investors/banks.</li>
<li>The scale of SVB is small, but it cannot be said that it has no impact on the fundamentals of China healthcare companies. Investors need to reassess the potential risks.</li>
<li>SVB’s woes would not be a serious blow to the US if government takes timely action. However, if BRICS currency is established, it would be real fatal for the dollar.</li>
</ul>


SVB has special institutions in China and its business mode is Venture Lending. The closure of SVB could make it harder for Chinese startups to raise money from US investors/banks.
The scale of SVB is small, but it cannot be said that it has no impact on the fundamentals of China healthcare companies. Investors need to reassess the potential risks.
SVB’s woes would not be a serious blow to the US if government takes timely action. However, if BRICS currency is established, it would be real fatal for the dollar.


“Sudden Death” of Silicon Valley Bank (SVB) - The Impact on China Healthcare

Equity Capital Markets

Shandong BoAn Biotechnology  / Equity Capital Markets

<ul>
<li>Without the advantages in product efficacy, production capacity, clinical progress and speed of approval, Boan's products have lost their pricing power in both China and overseas markets.</li>
<li>Due to the lack of differentiation and frontier enough target layout, the product commercialization potential is bound to be more easily questioned, with limited value in the long term.</li>
<li>Even if Boan could go public successfully, investors may not be able to achieve the expected returns because of the unfriendly market sentiment and a lack of liquidity in HKEX. </li>
</ul>


Without the advantages in product efficacy, production capacity, clinical progress and speed of approval, Boan's products have lost their pricing power in both China and overseas markets.
Due to the lack of differentiation and frontier enough target layout, the product commercialization potential is bound to be more easily questioned, with limited value in the long term.
Even if Boan could go public successfully, investors may not be able to achieve the expected returns because of the unfriendly market sentiment and a lack of liquidity in HKEX. 


Pre-IPO Shandong Boan Biotechnology - Conservative About the Outlook

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

Event-Driven

<ul>
<li>There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.</li>
<li>19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.</li>
<li>Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.</li>
</ul>


There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.
Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.


HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect

<ul>
<li>We see 28 potential inclusions to the HSCI in September, plus another 9 stocks that are close to the inclusion cutoff. Some stocks are already a part of Stock Connect.</li>
<li>There could be 22 deletions from the index on market cap, liquidity and prolonged suspension. Most of the deletions would be moved to the 'sell-only' Southbound Stock Connect list.</li>
<li>Some of the stocks that remain in the HSCI could move to the 'sell-only' Southbound Stock Connect list since their average market cap drops below HKD 5bn.</li>
</ul>


We see 28 potential inclusions to the HSCI in September, plus another 9 stocks that are close to the inclusion cutoff. Some stocks are already a part of Stock Connect.
There could be 22 deletions from the index on market cap, liquidity and prolonged suspension. Most of the deletions would be moved to the 'sell-only' Southbound Stock Connect list.
Some of the stocks that remain in the HSCI could move to the 'sell-only' Southbound Stock Connect list since their average market cap drops below HKD 5bn.


HSCI Index Rebalance and Stock Connect: Potential Changes in September

China

Genor Biopharma Holdings Ltd operates as a biopharmaceutical company. The Company focuses on developing and commercializing oncology and autoimmune drugs. Genor Biopharma Holdings serves customers worldwide.

Genor Biopharma Holdings (6998 HK)

China Healthcare Weekly (Jun.23) - National TCM VBP Results, CDE Changes Game Rule, Hua Medicine

Results of National TCM VBP were released, involving some big varieties. CDE changes game rule on drug approva. Companies has to change clinical...

Xinyao (Criss) Wang

“Sudden Death” of Silicon Valley Bank (SVB) - The Impact on China Healthcare

SVB's "sudden death" would affect Chinese healthcare companies. Investors need to reassess the risks of related companies.We don't think SVB’s woes...

Xinyao (Criss) Wang

Pre-IPO Shandong Boan Biotechnology - Conservative About the Outlook

Due to lack of differentiated/frontier enough target layout and slow progress, Boan's product commercialization potential is highly uncertain....

Xinyao (Criss) Wang

HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect

There are 24 adds and 14 deletes for the HSCI at the September rebalance. 19 stocks will be added to Stock Connect and 12 will be removed. Some of...

Brian Freitas

HSCI Index Rebalance and Stock Connect: Potential Changes in September

We see 28 potential adds and 9 close adds for the HSCI in September. There are 22 potential deletes on market cap, liquidity and prolonged...

Brian Freitas