HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Anhui’s new VBP included OTC TCM for the first time, which poses a big challenge to the pricing autonomy of CR Sanjiu. This makes Sanjiu's acquisition of Tasly more important/urgent. </li>
<li>Novo Nordisk's performance has raised concerns. The capacity bottleneck for weight-loss drugs seems resolved. Could this signal that the market for weight-loss drugs is reaching its peak?</li>
<li>
<a href="https://www.smartkarma.com/entities/keymed-biosciences-inc" target="_blank" data-smartkarma-citation="entities:33011:1" rel="noopener">Keymed Biosciences (2162 HK)</a>’s CM310 will miss this year’s NRDL negotiations, putting the company at a disadvantage. Considering the competitive landscape, we are concerned about Keymed’s performance.</li>
</ul>


Anhui’s new VBP included OTC TCM for the first time, which poses a big challenge to the pricing autonomy of CR Sanjiu. This makes Sanjiu's acquisition of Tasly more important/urgent. 
Novo Nordisk's performance has raised concerns. The capacity bottleneck for weight-loss drugs seems resolved. Could this signal that the market for weight-loss drugs is reaching its peak?

Keymed Biosciences (2162 HK)’s CM310 will miss this year’s NRDL negotiations, putting the company at a disadvantage. Considering the competitive landscape, we are concerned about Keymed’s performance.


China Healthcare Weekly (Sep.22) - CR Sanjiu's Trouble, Weight-Loss Drug Market Saturation, Keymed

Event-Driven

Chongqing Taiji Industry (Group) A / Event-Driven

<ul>
<li>TCM formula granules VBP would cause some disturbance to related enterprises’ performance, but the substitution of TCM formula granules for TCM decoction pieces is a trend, indicating long-term optimistic growth.</li>
<li>Keymed’s CM310 would probably miss the NRDL negotiation this year, which will put the Company in passive situation. Based on competitive landscape, we are worried about the performance of Keymed.</li>
<li>Unsatisfactory performance of Taiji’s shares is related to concerns on China TCM’s privatization/24H1 results.However, even without the integration with China TCM, Taiji's market value should be more than RMB20 billion.</li>
</ul>


TCM formula granules VBP would cause some disturbance to related enterprises’ performance, but the substitution of TCM formula granules for TCM decoction pieces is a trend, indicating long-term optimistic growth.
Keymed’s CM310 would probably miss the NRDL negotiation this year, which will put the Company in passive situation. Based on competitive landscape, we are worried about the performance of Keymed.
Unsatisfactory performance of Taiji’s shares is related to concerns on China TCM’s privatization/24H1 results.However, even without the integration with China TCM, Taiji's market value should be more than RMB20 billion.


China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed's Trouble

China Resources Medical / Equity Bottom-Up

<ul>
<li>Investors should be aware of the increasing prices of TCM raw materials, which could lead to fluctuations in profit margins of TCM companies. Investors should prepare for these potential impacts.</li>
<li>After years of “fast-follow”, we’ve finally seen products from Chinese pharmaceutical companies stand at the center of the stage for the first time in the new generation of ADC.</li>
<li>China Resources Medical's profitability outlook is not promising due to issues within the Chinese healthcare system. The bottom line is P/B above 1 and P/E above 10x.</li>
</ul>


Investors should be aware of the increasing prices of TCM raw materials, which could lead to fluctuations in profit margins of TCM companies. Investors should prepare for these potential impacts.
After years of “fast-follow”, we’ve finally seen products from Chinese pharmaceutical companies stand at the center of the stage for the first time in the new generation of ADC.
China Resources Medical's profitability outlook is not promising due to issues within the Chinese healthcare system. The bottom line is P/B above 1 and P/E above 10x.


China Healthcare Weekly (Jun.30) - TCM Companies Witness Soaring Costs, Rising Stars in ADC, 1515.HK

<ul>
<li>Retail pharmacies experienced performance decline in April and May. Due to negative policies, retail pharmacies will experience industry clearance. Therefore, we do not recommend investors to bottom-fish related stocks now.</li>
<li>There is a logic to biotech's performance from 2023 to present.The clearer the path of sustainable development, the better the stock price performance. They can be divided into three types.</li>
<li>YSB faces big risks and the outlook is not optimistic. If the final valuation of the Company is lower than <a href="https://www.smartkarma.com/entities/china-resources-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:22928:1" rel="noopener">China Resources Pharmaceutical</a> and <a href="https://www.smartkarma.com/entities/shanghai-pharmaceuticals-holding" target="_blank" data-smartkarma-citation="entities:228:1" rel="noopener">Shanghai Pharmaceuticals</a>, we wouldn't be too surprised.</li>
</ul>


Retail pharmacies experienced performance decline in April and May. Due to negative policies, retail pharmacies will experience industry clearance. Therefore, we do not recommend investors to bottom-fish related stocks now.
There is a logic to biotech's performance from 2023 to present.The clearer the path of sustainable development, the better the stock price performance. They can be divided into three types.
YSB faces big risks and the outlook is not optimistic. If the final valuation of the Company is lower than China Resources Pharmaceutical and Shanghai Pharmaceuticals, we wouldn't be too surprised.


China Healthcare Weekly (Jun23)-Retail Pharmacy's Dilemma, Logic to Biotech's Stock Price,YSB's Risk

Sichuan Kelun-Biotech Biopharm / Equity Bottom-Up

<ul>
<li>Since IPO, stock price of Kelun-Biotech has performed quite well. Then, the Company's valuation fluctuated. Investors seem not excited about <a href="https://www.smartkarma.com/entities/sichuan-kelun-biotech-biopharm" target="_blank" data-smartkarma-citation="entities:40071:1" rel="noopener">Sichuan Kelun-Biotech Biopharm (6990 HK)</a>’s 23H1 performance.</li>
<li>We won’t expect too much on A166 in such a difficult competitive landscape.Commercialization of SKB264 is also challenging.It's difficult to make up the story after A166/SKB264 begin to generate revenue.</li>
<li>After out-licensing all valuable/core assets to Merck, together with the departure of core R&amp;D personnel, Kelun-Biotech has been “hollowed out”.So, Kelun-Biotech's value lies in short-term trade rather than long-term hold.</li>
</ul>


Since IPO, stock price of Kelun-Biotech has performed quite well. Then, the Company's valuation fluctuated. Investors seem not excited about Sichuan Kelun-Biotech Biopharm (6990 HK)’s 23H1 performance.
We won’t expect too much on A166 in such a difficult competitive landscape.Commercialization of SKB264 is also challenging.It's difficult to make up the story after A166/SKB264 begin to generate revenue.
After out-licensing all valuable/core assets to Merck, together with the departure of core R&amp;D personnel, Kelun-Biotech has been “hollowed out”.So, Kelun-Biotech's value lies in short-term trade rather than long-term hold.


Sichuan Kelun-Biotech Biopharm (6990.HK) - Once the Products Hit the Market, Good Story May Stop

Hong Kong

Keymed Biosciences Inc. operates a biotechnology company. The Company focus on the in-house discovery and development of innovative biological therapies. Keymed Biosciences provides services in China.

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Keymed Biosciences (2162 HK)

China Healthcare Weekly (Sep.22) - CR Sanjiu's Trouble, Weight-Loss Drug Market Saturation, Keymed

Anhui's VBP includes OTC TCM, challenging CR Sanjiu's pricing autonomy. There are concerns about weight-loss drug market saturation. CM310 missing...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed's Trouble

Substitution of TCM formula granules for decoction pieces is a trend despite the VBP. Keymed will face difficulties without NRDL negotiation....

Xinyao (Criss) Wang

China Healthcare Weekly (Jun.30) - TCM Companies Witness Soaring Costs, Rising Stars in ADC, 1515.HK

Investors should watch for rising TCM raw material prices. Chinese pharmaceutical companies are rising in ADC.Caution with China Resources...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun23)-Retail Pharmacy's Dilemma, Logic to Biotech's Stock Price,YSB's Risk

Retail pharmacies facing industry clearance due to negative policies.Biotech stock performance tied to sustainable development path. YSB faces...

Xinyao (Criss) Wang

Sichuan Kelun-Biotech Biopharm (6990.HK) - Once the Products Hit the Market, Good Story May Stop

Kelun Bio seeks to raise HKD540.5M in net proceeds from Share Placement. The Placing Price is HKD150/share (6.8% discount to Last Traded Price of...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Healthcare Weekly (Sep.22) - CR Sanjiu's Trouble, Weight-Loss Drug Market Saturation, Keymed

​Anhui's VBP includes OTC TCM, challenging CR Sanjiu's pricing autonomy. There are concerns about weight-loss drug market saturation. CM310 missing...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed's Trouble

​Substitution of TCM formula granules for decoction pieces is a trend despite the VBP. Keymed will face difficulties without NRDL negotiation....

Xinyao (Criss) Wang

China Healthcare Weekly (Jun.30) - TCM Companies Witness Soaring Costs, Rising Stars in ADC, 1515.HK

​Investors should watch for rising TCM raw material prices. Chinese pharmaceutical companies are rising in ADC.Caution with China Resources...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun23)-Retail Pharmacy's Dilemma, Logic to Biotech's Stock Price,YSB's Risk

​Retail pharmacies facing industry clearance due to negative policies.Biotech stock performance tied to sustainable development path. YSB faces...

Xinyao (Criss) Wang

Sichuan Kelun-Biotech Biopharm (6990.HK) - Once the Products Hit the Market, Good Story May Stop

Kelun Bio seeks to raise HKD540.5M in net proceeds from Share Placement. The Placing Price is HKD150/share (6.8% discount to Last Traded Price of...

Xinyao (Criss) Wang

Anhui's VBP includes OTC TCM, challenging CR Sanjiu's pricing autonomy. There are concerns about weight-loss drug market saturation. CM310 missing...

Substitution of TCM formula granules for decoction pieces is a trend despite the VBP. Keymed will face difficulties without NRDL negotiation....

Investors should watch for rising TCM raw material prices. Chinese pharmaceutical companies are rising in ADC.Caution with China Resources...

Retail pharmacies facing industry clearance due to negative policies.Biotech stock performance tied to sustainable development path. YSB faces...