HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Livzon Pharmaceutical Group In / Equity Bottom-Up

Livzon Pharmaceutical Group In (000513 CH)

<ul>
<li>Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. </li>
<li>This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year's financial results.</li>
<li>We analyzed the performance of <a href="https://www.smartkarma.com/entities/livzon-pharmaceutical-group-in" target="_blank" data-smartkarma-citation="entities:24770:1" rel="noopener">Livzon Pharmaceutical Group In (000513 CH),</a><a href="https://www.smartkarma.com/entities/bgi-genomics-co-ltd" target="_blank" data-smartkarma-citation="entities:25890:1" rel="noopener">BGI Genomics (300676 CH)</a><a href="https://www.smartkarma.com/entities/livzon-pharmaceutical-group-in" target="_blank" data-smartkarma-citation="entities:24770:1" rel="noopener"> and </a><a href="https://www.smartkarma.com/entities/jinxin-fertility-group-ltd" target="_blank" data-smartkarma-citation="entities:28003:1" rel="noopener">Jinxin Fertility Group (1951 HK) </a>based on their 23H1 reports, and adjusted our forecast accordingly.</li>
</ul>


Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. 
This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year's financial results.
We analyzed the performance of Livzon Pharmaceutical Group In (000513 CH),BGI Genomics (300676 CH) and Jinxin Fertility Group (1951 HK) based on their 23H1 reports, and adjusted our forecast accordingly.


China Population Policies Impact on Healthcare Companies Series – Part 2

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>1H23 results inline. Jinxin reported 1H23 revenue of RMB1,334mn, up 17.2% YoY, and non-IFRS adjusted net profit of RMB255mn, slightly down 1.2% YoY.</li><li>In 1H23, revenue accounted for 46.2% of our full-year forecast, lower than its historical average, while non-IFRS adjusted net profit represented 50.3% of our full-year forecast, higher than its historical average.</li><li>Excluding the two hospitals in Yunnan consolidated from July 2022, the organic revenue growth of 6.4% YoY was mainly driven by the strong recovery in Shenzhen (revenue +13.8% YoY) and the US (revenue +21.0% YoY).</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

1H23 results inline. Jinxin reported 1H23 revenue of RMB1,334mn, up 17.2% YoY, and non-IFRS adjusted net profit of RMB255mn, slightly down 1.2% YoY.In 1H23, revenue accounted for 46.2% of our full-year forecast, lower than its historical average, while non-IFRS adjusted net profit represented 50.3% of our full-year forecast, higher than its historical average.Excluding the two hospitals in Yunnan consolidated from July 2022, the organic revenue growth of 6.4% YoY was mainly driven by the strong recovery in Shenzhen (revenue +13.8% YoY) and the US (revenue +21.0% YoY).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Jinxin Fertility (1951 HK) – Recovery to Expedite in 2H23E

<ul>
<li>China has started taking measures to optimize fertility policies. The inclusion of assisted reproduction technologies in medical insurance is a general trend, which would generate increasing demand in the future.</li>
<li>From the current domestic assisted reproductive industry chain, there is significant import substitution space and growth potential in the fields of related drugs, prenatal/newborn genetic testing, and downstream medical services.</li>
<li>Companies such as Livzon/BGI/Jinxin would be the direct beneficiaries of related policy. We analyzed the industry characteristics, investment rationale, key risks and comparison with peers of these companies. </li>
</ul>


China has started taking measures to optimize fertility policies. The inclusion of assisted reproduction technologies in medical insurance is a general trend, which would generate increasing demand in the future.
From the current domestic assisted reproductive industry chain, there is significant import substitution space and growth potential in the fields of related drugs, prenatal/newborn genetic testing, and downstream medical services.
Companies such as Livzon/BGI/Jinxin would be the direct beneficiaries of related policy. We analyzed the industry characteristics, investment rationale, key risks and comparison with peers of these companies. 


China Population Policies Impact on Healthcare Companies Series - Part 1

<ul>
<li>NHSA released the new NRDL negotiation rules of innovative drugs. Some adjustments will bring certain benefits to innovative drugs, but the overall impact will not be as good as expected. </li>
<li>Beijing announced that 16 assisted reproduction technologies will be covered by medical insurance reimbursement from July 1. This policy should benefit companies in the assisted reproduction industry chain.</li>
<li>We analyzed the key flaws of <a href="https://www.smartkarma.com/entities/kintor-pharmaceutical" target="_blank" data-smartkarma-citation="entities:28884:1" rel="noopener">Kintor Pharmaceutical (9939 HK)</a>, and we remain skeptical about this company.</li>
</ul>


NHSA released the new NRDL negotiation rules of innovative drugs. Some adjustments will bring certain benefits to innovative drugs, but the overall impact will not be as good as expected. 
Beijing announced that 16 assisted reproduction technologies will be covered by medical insurance reimbursement from July 1. This policy should benefit companies in the assisted reproduction industry chain.
We analyzed the key flaws of Kintor Pharmaceutical (9939 HK), and we remain skeptical about this company.


China Healthcare Weekly (Jul.7) - New NRDL Negotiation Rules, Assisted Reproduction Payment, Kintor

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 weekly Hong Kong Connect flows with our data engine for holding position as of May 25th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent, China Mobile, Li Ning, China Construction Bank.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 25th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, China Mobile, Li Ning, China Construction Bank.


Hong Kong Connect Flows (May 25th): Tencent, China Mobile, Li Ning, China Construction Bank

China

Jinxin Fertility Group is a leading international provider of assisted reproductive services (ARS) and assisted reproductive technology (ART). Its core offerings include In Vitro Fertilization (IVF), Intrauterine Insemination (IUI), egg retrieval, embryo transfer, and genetic screening, alongside a range of women's health services. The company is headquartered in Chengdu, China, and was founded in 1951.

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Jinxin Fertility (1951 HK)

China Population Policies Impact on Healthcare Companies Series – Part 2

Several regions have successively introduced policies to encourage childbirth, so we analyzed the recent policy updates. Based on Livzon/BGI...

Xinyao (Criss) Wang