HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Ping An Healthcare and Technol / Equity Bottom-Up

<ul>
<li>Fang Weihao's departure means PAGD's strategic transformation failed. The business model of being a "vassal" of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.</li>
<li>PAGD is at a crossroads. The question is which development path will the new CEO choose - Follow Fang Weihao's strategy or return to the traditional Internet healthcare business model?</li>
<li>Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.</li>
</ul>


Fang Weihao's departure means PAGD's strategic transformation failed. The business model of being a "vassal" of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.
PAGD is at a crossroads. The question is which development path will the new CEO choose - Follow Fang Weihao's strategy or return to the traditional Internet healthcare business model?
Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.


Ping An Healthcare and Technology (1833.HK) - Valuation Logic May Completely Change Due to New Path

<ul>
<li>PAGD successfully narrowed net loss. It seems that the Company doesn’t mind “sacrificing” revenue scale, which could be considered "a necessary price" to pay for the transition to 2B model.</li>
<li>PAGD mainly rely on Ping An Group channels to acquire B-end and F-end users, but based on our calculation, PAGD would encounter an obvious growth ceiling at certain revenue scale.</li>
<li>Although PAGD could achieve breakeven by divesting businesses with low strategic synergies and effective cost control, the Company's long-term growth potential and prospects remain uncertain, leading to discounted valuation.  </li>
</ul>


PAGD successfully narrowed net loss. It seems that the Company doesn’t mind “sacrificing” revenue scale, which could be considered "a necessary price" to pay for the transition to 2B model.
PAGD mainly rely on Ping An Group channels to acquire B-end and F-end users, but based on our calculation, PAGD would encounter an obvious growth ceiling at certain revenue scale.
Although PAGD could achieve breakeven by divesting businesses with low strategic synergies and effective cost control, the Company's long-term growth potential and prospects remain uncertain, leading to discounted valuation.  


Ping An Healthcare and Technology (1833.HK) - Valuation Could Fall Again Due to Clear Growth Ceiling

Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

Equity Capital Markets

<ul><li>Three major concerns/questions I'd ask regarding the potential IPO of <a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a>:</li></ul><ol>
<li>
<a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener"></a>Single monetization channel: as the company seeks further growth, can it really compete against the distribution channels of the tech and insurance giants in China?</li>
<li>
Insurance/product development potential: does the company have the expertise to develop its own products without just having to rely on the distribution channels?</li>
<li>
Valuation: if the investment thesis is to ride the growth of healthcare and medical insurance spending in China, isn't it more direct to invest in an online (or even traditional) insurer, which is at a much lower valuation?</li>
</ol>

Three major concerns/questions I'd ask regarding the potential IPO of Waterdrop Inc (WDH US):

Single monetization channel: as the company seeks further growth, can it really compete against the distribution channels of the tech and insurance giants in China?

Insurance/product development potential: does the company have the expertise to develop its own products without just having to rely on the distribution channels?

Valuation: if the investment thesis is to ride the growth of healthcare and medical insurance spending in China, isn't it more direct to invest in an online (or even traditional) insurer, which is at a much lower valuation?


Waterdrop Inc: Can the Water Keep Flowing After Its IPO?

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Ping An Healthcare and Technol / Event-Driven

<ul>
<li>In this insight, we take a look at the potential index changes and the resultant capping flows for the HSTECH Index in September 2023.</li>
<li>Based on the latest available data, I see two ADDs and two DELs. </li>
<li>For the September 2023 rebalance, I expect one-way capping flows to be around US$234mn.</li>
</ul>


In this insight, we take a look at the potential index changes and the resultant capping flows for the HSTECH Index in September 2023.
Based on the latest available data, I see two ADDs and two DELs. 
For the September 2023 rebalance, I expect one-way capping flows to be around US$234mn.


Quiddity HSTECH Sep 23 Flow Expectations: Two ADDs/DELs Possible

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

<ul>
<li>With no stocks in outright inclusion or deletion zone, we do not expect any constituent changes for the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> in June.</li>
<li>Capping changes will result in a one-way turnover of 5.3% leading to a round-trip trade of US$1.51bn.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a> is expected to be the largest buy in June following the stock being the largest sell at the March rebalance (also due to capping).</li>
</ul>


With no stocks in outright inclusion or deletion zone, we do not expect any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in June.
Capping changes will result in a one-way turnover of 5.3% leading to a round-trip trade of US$1.51bn.

Li Auto (2015 HK) is expected to be the largest buy in June following the stock being the largest sell at the March rebalance (also due to capping).


HSTECH Index Rebalance Preview: Round-Trip Trade of US$1.5bn in June

China

Ping An Healthcare and Technology Company Limited provides health care software solutions. The Company offers mobile platform for online consultation, hospital referral and appointment, health management, and wellness interaction services, as well as connects consumers and patients with health care resources. Ping An Healthcare and Technology serves customers in China.

Ping An Healthcare and Technol (1833 HK)

Ping An Healthcare and Technology (1833.HK) - Valuation Logic May Completely Change Due to New Path

The core of future development of PAGD is not who the CEO is, but what kind of development path it will take. Valuation logic would change...

Xinyao (Criss) Wang

Ping An Healthcare and Technology (1833.HK) - Valuation Could Fall Again Due to Clear Growth Ceiling

PAGD looks good at strategic transformation with narrowed net loss, but long-term growth potential remain uncertain due to a clear growth ceiling....

Xinyao (Criss) Wang

Waterdrop Inc: Can the Water Keep Flowing After Its IPO?

Waterdrop Inc is an interesting company with good intentions. But these are the three major concerns one should pay particular attention to when...

Alec Tseung

Quiddity HSTECH Sep 23 Flow Expectations: Two ADDs/DELs Possible

I see East Buy (formerly Koolearn (1797 HK)) and Tongcheng Travel (780 HK) as ADDs and AAC Technologies (2018 HK) and Ping An Healthcare (1833 HK)...

Janaghan Jeyakumar, CFA

HSTECH Index Rebalance Preview: Round-Trip Trade of US$1.5bn in June

We do not expect any constituent changes for the HSTECH Index in June. Capping changes will result in a one-way turnover of 5.3% leading to a round...

Brian Freitas