Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.</li>
<li>As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.</li>
<li>China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.</li>
</ul>


The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.
As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.
China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.


EM Outperformance to Continue (Vs. EAFE) -- Add on a Pullback; DXY Needs to Hold Below $106

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The rebounds in healthcare sector is more due to oversold. Unfriendly macro environment could make stock price fluctuate largely.Investors would find better places to long than the current valuation level.</li>
<li>The new document about payment management measures for new technology out of CHS-DRG payment scope is an important “policy correction” signal, but there are still problems remain to be solved.</li>
<li>We analyzed our top picks and investment logic in CXO, pharmaceuticals and medical device industry. Overall, as a “defensive sector”, China healthcare has investment value in such complicated external environment.</li>
</ul>


The rebounds in healthcare sector is more due to oversold. Unfriendly macro environment could make stock price fluctuate largely.Investors would find better places to long than the current valuation level.
The new document about payment management measures for new technology out of CHS-DRG payment scope is an important “policy correction” signal, but there are still problems remain to be solved.
We analyzed our top picks and investment logic in CXO, pharmaceuticals and medical device industry. Overall, as a “defensive sector”, China healthcare has investment value in such complicated external environment.


2022H2 China Healthcare Investment Strategy and Top Picks

<ul>
<li>DRGs will become the main form of medical insurance payment, which will bring huge impact on all parties (hospitals, physicians, patients, companies) and fundamentally change the existing medical environment.</li>
<li>DRGs would force hospitals/doctors to cure patients within specified time and amount of cost, which would promote the improvement of technology with differentiated innovation that truly drives clinical benefits.</li>
<li>Overall, investors are advised to pay attention to related opportunities but also prepare for the potential risks in advance.</li>
</ul>


DRGs will become the main form of medical insurance payment, which will bring huge impact on all parties (hospitals, physicians, patients, companies) and fundamentally change the existing medical environment.
DRGs would force hospitals/doctors to cure patients within specified time and amount of cost, which would promote the improvement of technology with differentiated innovation that truly drives clinical benefits.
Overall, investors are advised to pay attention to related opportunities but also prepare for the potential risks in advance.


The Impact of DRGs Policy on China Medical System

<ul>
<li>Laparoscopic surgical robots are one of the most important R&amp;D directions of surgical robots, which is the largest market segment and can be applied in a broad range of surgeries.</li>
<li>The launch of laparoscopic surgical robot from domestic companies with high cost performance would be very helpful to seize the markets with great potential in early stage of the industry.</li>
<li>The medical insurance coverage offers a viable way for the commercialization of surgical robots in China, which is important. The revenue/profits generated from disposables and services would be more attractive.</li>
</ul>


Laparoscopic surgical robots are one of the most important R&amp;D directions of surgical robots, which is the largest market segment and can be applied in a broad range of surgeries.
The launch of laparoscopic surgical robot from domestic companies with high cost performance would be very helpful to seize the markets with great potential in early stage of the industry.
The medical insurance coverage offers a viable way for the commercialization of surgical robots in China, which is important. The revenue/profits generated from disposables and services would be more attractive.


Industry Report – Insights on China Surgical Robots Industry

<ul>
<li>The Beijing municipality has added fertility treatment in its medical insurance program. We analyzed related impact.</li>
<li>If we hope to have more companies entering global TOP50 during “14th Five-Year Plan” period, domestic medical device companies need at least 25% annualized revenue growth to make it happen.</li>
<li>Actually, the national medical insurance doesn't determine market size directly but adjust the “distribution”. There's no need to focus solely on anti-tumor field, but rare diseases and central nervous system diseases.</li>
</ul>


The Beijing municipality has added fertility treatment in its medical insurance program. We analyzed related impact.
If we hope to have more companies entering global TOP50 during “14th Five-Year Plan” period, domestic medical device companies need at least 25% annualized revenue growth to make it happen.
Actually, the national medical insurance doesn't determine market size directly but adjust the “distribution”. There's no need to focus solely on anti-tumor field, but rare diseases and central nervous system diseases.


China Healthcare Weekly (Feb.25)-Assisted Reproduction, Medical Device Co. Globalization, New Growth

China

MicroPort Scientific is a leading global medical device company that innovates, manufactures, and markets high-end medical devices. The company provides solutions across twelve therapeutic areas, including cardiovascular, orthopedics, cardiac rhythm management, electrophysiology, endovascular, neurovascular, and surgical robotics. It was founded in 1998 and is headquartered in Shanghai, China.

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MicroPort Scientific (853 HK)

EM Outperformance to Continue (Vs. EAFE) -- Add on a Pullback; DXY Needs to Hold Below $106

EM vs. EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the $DXY peaked in November 2022. If the DXY remains below...

Vermilion Research

2022H2 China Healthcare Investment Strategy and Top Picks

We analyze the investment strategy,top picks and logic in CXO,pharmaceuticals and medical device industry.As a “defensive sector”,China healthcare...

Xinyao (Criss) Wang

The Impact of DRGs Policy on China Medical System

An important remaining piece of China healthcare reform is DRGs, which will fundamentally change the existing medical environment. Investors need...

Xinyao (Criss) Wang

Industry Report – Insights on China Surgical Robots Industry

We analyzed the China surgical robots industry in terms of market potential, policy support, laparoscopic surgical robots from domestic companies...

Xinyao (Criss) Wang

China Healthcare Weekly (Feb.25)-Assisted Reproduction, Medical Device Co. Globalization, New Growth

Assisted reproduction is covered by medical insurance; We analyzed the benchmark of medical device companies' globalization, clarify the...

Xinyao (Criss) Wang

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