HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

On October 16, 2020, the government released a new policy for the intensive procurement of coronary stents, which kicked off the nationwide intensive procurement for high-value medical consumables. According to the policy, The amount of coronary stents purchased in the first year was around 1,074,000, accounting for about 70% of the national annual consumption of coronary stents. The results of this policy have a strong reference for the future expansion of high-value medical consumables' intensive procurement. On November 5, the policy was formally implemented and the result was released.

On October 16, 2020, the government released a new policy for the intensive procurement of coronary stents, which kicked off the nationwide intensive procurement for high-value medical consumables. According to the policy, The amount of coronary stents purchased in the first year was around 1,074,000, accounting for about 70% of the national annual consumption of coronary stents. The results of this policy have a strong reference for the future expansion of high-value medical consumables' intensive procurement. On November 5, the policy was formally implemented and the result was released.

Insights on China Healthcare Policy: New Intensive Procurement Policy for High-Value Medical Devices

1. Industry viewpoints: <ul>
<li>China’s new intensive procurement policy has finally been applied to high-value medical consumables. Thus, related medical device companies are facing new challenges.</li>
<li>
With the increase of patients' affordability and doctors' cognition and acceptance of minimally invasive surgery, it is expected that MISIA market will have greater growth potential in the near future. 
</li>
<li>In recent years, China cancer drug market has grown rapidly. With large growth potential in this market and more favorable policy, more innovative cancer drugs will be approved in China</li>
</ul>2. Company newsNews of Jiangsu Hengrui Medicine, Dingdang Kuaiyao and AstraZeneca China on the cooperation of new drugs and the progress of new funding.3. Market reviewLast week, stock price for healthcare sector in A share decreased 6.24%, while CSI 300 decreased 1.53% over the same period of time.

1. Industry viewpoints: 
China’s new intensive procurement policy has finally been applied to high-value medical consumables. Thus, related medical device companies are facing new challenges.

With the increase of patients' affordability and doctors' cognition and acceptance of minimally invasive surgery, it is expected that MISIA market will have greater growth potential in the near future. 

In recent years, China cancer drug market has grown rapidly. With large growth potential in this market and more favorable policy, more innovative cancer drugs will be approved in China
2. Company newsNews of Jiangsu Hengrui Medicine, Dingdang Kuaiyao and AstraZeneca China on the cooperation of new drugs and the progress of new funding.3. Market reviewLast week, stock price for healthcare sector in A share decreased 6.24%, while CSI 300 decreased 1.53% over the same period of time.

1.Industry viewpoints
<ul>
<li>China's biopharmaceutical market is still in its early days, but it has a strong growth potential.</li>
<li>Q3 earning season kicks off.</li>
<li>Favorable policies may still not ensure the golden time for the industry of Chinese traditional medicine.</li>
</ul>
2.Company news
News of Shanghai Henlius Biotech, Innovent Biologics and BeiGene on the progress of new drugs and amended agreement.
3.Market review
Last week, stock price for healthcare sector rose 2.86%, while CSI 300 rose 2.04% over the same period of time.
4.Risk Disclosure 
Policy risk, R&amp;D risk, company risk and COVID-19 risk

1.Industry viewpoints

China's biopharmaceutical market is still in its early days, but it has a strong growth potential.
Q3 earning season kicks off.
Favorable policies may still not ensure the golden time for the industry of Chinese traditional medicine.

2.Company news
News of Shanghai Henlius Biotech, Innovent Biologics and BeiGene on the progress of new drugs and amended agreement.
3.Market review
Last week, stock price for healthcare sector rose 2.86%, while CSI 300 rose 2.04% over the same period of time.
4.Risk Disclosure 
Policy risk, R&amp;D risk, company risk and COVID-19 risk

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Haidilao International Holding / Index Rebalance

The Hang Seng Indexes Company Limited (HSIL) should announce the results of the 2020 Q3 review of the Hang Seng Family of Indexes on 6 November. The constituent changes will be effective after the close of trading on 4 December.With only 3 changes permitted in the September <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 (HSCEI INDEX)</a> review post the methodology change that included WVR securities and Secondary Listings in the eligible Universe, there could be as many as 9 changes in the December review.We see a high probability of <a href="https://www.smartkarma.com/entities/china-overseas-land-invest" target="_blank" data-smartkarma-citation="entities:419:1" rel="noopener">China Overseas Land &amp; Investment Ltd (688 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a>, <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a>, <a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a>, <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing (981 HK)</a> and <a href="https://www.smartkarma.com/entities/evergrande-real-estate-group-limited" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a> being included in the <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 (HSCEI INDEX)</a>, and of <a href="https://www.smartkarma.com/entities/china-taiping-insurance-hldgs-co-ltd" target="_blank" data-smartkarma-citation="entities:489:1" rel="noopener">China Taiping Insurance Hldgs (966 HK)</a>, <a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd-h" target="_blank" data-smartkarma-citation="entities:1015:1" rel="noopener">China Telecom Corp Ltd (H) (728 HK)</a>, <a href="https://www.smartkarma.com/entities/china-minsheng-banking-h" target="_blank" data-smartkarma-citation="entities:8983:1" rel="noopener">China Minsheng Banking H (1988 HK)</a>, <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd-h" target="_blank" data-smartkarma-citation="entities:18368:1" rel="noopener">China Vanke Co Ltd (H) (2202 HK)</a>, <a href="https://www.smartkarma.com/entities/fosun-international-ltd" target="_blank" data-smartkarma-citation="entities:433:1" rel="noopener">Fosun International (656 HK)</a>, <a href="https://www.smartkarma.com/entities/china-citic-bank-corp-ltd-ea6c25fd-4b20-45cb-a4a6-df7a60136f03" target="_blank" data-smartkarma-citation="entities:653:1" rel="noopener">China Citic Bank Corp Ltd H (998 HK)</a> and <a href="https://www.smartkarma.com/entities/china-shenhua-energy-co-h" target="_blank" data-smartkarma-citation="entities:382:1" rel="noopener">China Shenhua Energy Co H (1088 HK)</a> being deleted from the index.Depending on price movements between now and 30 September, <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a> and <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a> could be included in the index, which would see <a href="https://www.smartkarma.com/entities/want-want-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:355:1" rel="noopener">Want Want (151 HK)</a> and <a href="https://www.smartkarma.com/entities/picc-property-casualty-h" target="_blank" data-smartkarma-citation="entities:350:1" rel="noopener">PICC Property &amp; Casualty H (2328 HK)</a> being deleted.Estimated one-way turnover for the rebalance is 9.63% which is lower than the turnover at the September rebalance, but significant nonetheless.The expected review changes will alter the sectoral composition of the index with an increase in the weight of the Consumer Discretionary, Information Technology and Health Care sectors at the expense of Financials and Energy. There will also be an impact on the HSCEI 2021 dividend futures, a large part of which has already been discounted by the market.

The Hang Seng Indexes Company Limited (HSIL) should announce the results of the 2020 Q3 review of the Hang Seng Family of Indexes on 6 November. The constituent changes will be effective after the close of trading on 4 December.With only 3 changes permitted in the September Hang Seng China Enterprises Index (HSCEI INDEX) review post the methodology change that included WVR securities and Secondary Listings in the eligible Universe, there could be as many as 9 changes in the December review.We see a high probability of China Overseas Land &amp; Investment Ltd (688 HK), JD.com (HK) (9618 HK), Alibaba Health Information Technology (241 HK), Haidilao (6862 HK), China Feihe (6186 HK), Semiconductor Manufacturing (981 HK) and Evergrande Real Estate Group (3333 HK) being included in the Hang Seng China Enterprises Index (HSCEI INDEX), and of China Taiping Insurance Hldgs (966 HK), China Telecom Corp Ltd (H) (728 HK), China Minsheng Banking H (1988 HK), China Vanke Co Ltd (H) (2202 HK), Fosun International (656 HK), China Citic Bank Corp Ltd H (998 HK) and China Shenhua Energy Co H (1088 HK) being deleted from the index.Depending on price movements between now and 30 September, NetEase (9999 HK) and Hansoh Pharmaceutical (3692 HK) could be included in the index, which would see Want Want (151 HK) and PICC Property &amp; Casualty H (2328 HK) being deleted.Estimated one-way turnover for the rebalance is 9.63% which is lower than the turnover at the September rebalance, but significant nonetheless.The expected review changes will alter the sectoral composition of the index with an increase in the weight of the Consumer Discretionary, Information Technology and Health Care sectors at the expense of Financials and Energy. There will also be an impact on the HSCEI 2021 dividend futures, a large part of which has already been discounted by the market.

HSCEI Index Rebalance Preview - December 2020: HUGE Number of Changes and Turnover Expected

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Alibaba Health Information Tec / Event-Driven

In <a href="https://skr.ma/rHAUM" target="_blank" rel="noopener">Hong Kong Short Interest: From the Wuhan Lockdown, The Market Low, Until Now</a> at end May, I thought it would be a useful exercise to see how shorts behaved in 2020, using specific notable points in time as reference points (at the time of the lockdown in Wuhan (23 Jan), the low of stock markets in late March) against where we were then.
In something of a companion piece, this insight looks at the holdings via the Shanghai &amp; Shenzhen Connect into Hong Kong stocks (i.e. southbound holdings) at these moments in time.
I've broken down these holdings into various industries, both in HK$ terms and as a % of the accumulated market caps of the companies into which the Shanghai/Shenzhen holdings are held.
And finally, I've looked into the top price to book companies via these connect holdings to gauge if any meaningful pattern emerges.
Information for this insight is all sourced from the HKEx disclosure page. There are, by last count, <a href="http://www.sse.com.cn/services/hkexsc/disclo/eligible/" target="_blank" rel="noopener">318</a> Hong Kong-listed companies under the Shanghai Connect and, and <a href="http://www.szse.cn/szhk/hkbussiness/underlylist/" target="_blank" rel="noopener">477</a> under Shenzhen; although every HK-listed company under the Shanghai connect can also be found in the Shenzhen eligible list. 
<div>
As always, more below the fold.
</div>

In Hong Kong Short Interest: From the Wuhan Lockdown, The Market Low, Until Now at end May, I thought it would be a useful exercise to see how shorts behaved in 2020, using specific notable points in time as reference points (at the time of the lockdown in Wuhan (23 Jan), the low of stock markets in late March) against where we were then.
In something of a companion piece, this insight looks at the holdings via the Shanghai &amp; Shenzhen Connect into Hong Kong stocks (i.e. southbound holdings) at these moments in time.
I've broken down these holdings into various industries, both in HK$ terms and as a % of the accumulated market caps of the companies into which the Shanghai/Shenzhen holdings are held.
And finally, I've looked into the top price to book companies via these connect holdings to gauge if any meaningful pattern emerges.
Information for this insight is all sourced from the HKEx disclosure page. There are, by last count, 318 Hong Kong-listed companies under the Shanghai Connect and, and 477 under Shenzhen; although every HK-listed company under the Shanghai connect can also be found in the Shenzhen eligible list. 

As always, more below the fold.


Shanghai/Shenzhen Connect: Holdings From the Wuhan Lockdown, The Market Low, Until Now

China

Microport Scientific Corp. manufactures interventional and minimally invasive devices for keyhole surgery. The Company's products are used to treat vascular diseases and is developing devices to treat diabetes and orthopedic diseases.

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Microport Scientific (853 HK)

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The article analyzed potential impact of China's new intensive procurement policy on high-value medical devices. If interested in investing China...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.23)

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Xinyao (Criss) Wang

China Healthcare Weekly (Oct.9)

This insight summarized the important industry viewpoints, news of listed healthcare companies and capital market review for the last week of China...

Xinyao (Criss) Wang

HSCEI Index Rebalance Preview - December 2020: HUGE Number of Changes and Turnover Expected

The Hang Seng Indexes Company Limited (HSIL) will announce the results of the 2020 Q2 review of the Hang Seng Family of Indexes in mid August. The...

Brian Freitas

Shanghai/Shenzhen Connect: Holdings From the Wuhan Lockdown, The Market Low, Until Now

In Hong Kong Short Interest: From the Wuhan Lockdown, The Market Low, Until Now at end May, I thought it would be a useful exercise to see how...

David Blennerhassett

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