HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Qingdao Haier Biomedical  Lt / Equity Capital Markets

<ul>
<li>Since the room for China's medical insurance fund to continue to increase reimbursement for high quality innovative drugs is still large, we are optimistic about 2025 NRDL negotiation.</li>
<li>Although it’s inevitable trend for commercial insurance to cover innovative drugs, it won’t truly improve the payment end until the contribution of commercial insurance to hospital revenue increase to 10-15%.</li>
<li>Due to the complexity of the transaction, Haier Biomedical and RAAS terminated their merger. We think disagreements would easily emerge regarding the core issue in this transaction (i.e. the price).</li>
</ul>


Since the room for China's medical insurance fund to continue to increase reimbursement for high quality innovative drugs is still large, we are optimistic about 2025 NRDL negotiation.
Although it’s inevitable trend for commercial insurance to cover innovative drugs, it won’t truly improve the payment end until the contribution of commercial insurance to hospital revenue increase to 10-15%.
Due to the complexity of the transaction, Haier Biomedical and RAAS terminated their merger. We think disagreements would easily emerge regarding the core issue in this transaction (i.e. the price).


China Healthcare Weekly (Jan.12) - Haier Biomedical and RAAS Terminated Their Merger

<ul>
<li>Haier Biomedical plans to merge with and absorb Shanghai RAAS through the issuance of shares, and both parties have signed a letter of intent for the potential merger.</li>
<li>Haier's acquisition of RAAS helps connect the software and hardware of the blood industry and strengthen the company's dominant position in the entire industry chain in the blood products industry.</li>
<li>The market value/financial performance of these two are far apart. If the acquisition is completed, it will help Haier improve financial performance, which is obviously more beneficial for Haier. </li>
</ul>


Haier Biomedical plans to merge with and absorb Shanghai RAAS through the issuance of shares, and both parties have signed a letter of intent for the potential merger.
Haier's acquisition of RAAS helps connect the software and hardware of the blood industry and strengthen the company's dominant position in the entire industry chain in the blood products industry.
The market value/financial performance of these two are far apart. If the acquisition is completed, it will help Haier improve financial performance, which is obviously more beneficial for Haier. 


China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

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 3Q2024 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.</li>
<li>We estimate that the inflows in 3Q were US$7,684 million and holdings were USD340bn.</li>
<li>We highlight flows for Midea, Moutai, Ping An Insurance, Catl, Yangtze Power.</li>
</ul>


We analyze the 3Q2024 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.
We estimate that the inflows in 3Q were US$7,684 million and holdings were USD340bn.
We highlight flows for Midea, Moutai, Ping An Insurance, Catl, Yangtze Power.


Northbound Flows (3Q2024): Wait and See Mode

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

Index Rebalance

<ul>
<li>There are three constituent changes for the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> at the March rebalance. One inclusion and one non-inclusion are surprises.</li>
<li>One way turnover is estimated at 2.9% and will result in a one-way trade of CNY 4,075m with over 2.5x ADV to trade on all constituent changes.</li>
<li>The adds have outperformed the deletes over the last few months with a jump in the last few trading sessions. There could be more outperformance over the next two weeks.</li>
</ul>


There are three constituent changes for the SSE STAR50 (STAR50 INDEX) at the March rebalance. One inclusion and one non-inclusion are surprises.
One way turnover is estimated at 2.9% and will result in a one-way trade of CNY 4,075m with over 2.5x ADV to trade on all constituent changes.
The adds have outperformed the deletes over the last few months with a jump in the last few trading sessions. There could be more outperformance over the next two weeks.


STAR50 Index Rebalance: Three Changes a Side; One Surprise Change

Suzhou Novosense Microelectron / Index Rebalance

Suzhou Novosense Microelectron (688052 CH)

<ul>
<li>The review period for the March rebalance ended 31 January. We expect the changes to be announced 23 February with the implementation taking place after the close on 8 March.</li>
<li>We expect the index committee to continue using a 6-month minimum listing history resulting in three changes to the index.</li>
<li>The potential inclusions have dropped but there has been significant outperformance versus the potential deletions. That could continue as positioning continues for the high expected impact on the stocks.</li>
</ul>


The review period for the March rebalance ended 31 January. We expect the changes to be announced 23 February with the implementation taking place after the close on 8 March.
We expect the index committee to continue using a 6-month minimum listing history resulting in three changes to the index.
The potential inclusions have dropped but there has been significant outperformance versus the potential deletions. That could continue as positioning continues for the high expected impact on the stocks.


STAR50 Index Rebalance Preview: Sustaining Outperformance on Expected Impact

China

Qingdao Haier Biomedical Co., Ltd. designs, manufacture, and markets low temperature storage equipment for biomedical samples. The Company provides complete storage solutions for biological sample banks, blood safety, vaccine safety, medical supplies, and reagent safety as well. Qingdao Haier Biomedical

Price Gauge
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Qingdao Haier Biomedical Lt (688139 CH)

China Healthcare Weekly (Jan.12) - Haier Biomedical and RAAS Terminated Their Merger

China's medical insurance fund will increase reimbursement for innovative drug. Commercial insurance need to increase percentage in hospital...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...

Xinyao (Criss) Wang

Northbound Flows (3Q2024): Wait and See Mode

We analyzed Northbound connect data for 3Q2024 and highlight flows for Moutai, Midea, Wuliangye, Catl, Gree Electric Appliances.

Ke Yan, CFA, FRM

STAR50 Index Rebalance: Three Changes a Side; One Surprise Change

There are 3 changes for the STAR50 in March. Estimated one-way turnover is 2.9% resulting in a 1-way trade of CNY 4.08bn with over 2.5x ADV to...

Brian Freitas

STAR50 Index Rebalance Preview: Sustaining Outperformance on Expected Impact

There could be 3 changes for the STAR50 Index in March. One-way turnover is estimated at 2.4% leading to a one-way trade of CNY 2.9bn. The...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Healthcare Weekly (Jan.12) - Haier Biomedical and RAAS Terminated Their Merger

​China's medical insurance fund will increase reimbursement for innovative drug. Commercial insurance need to increase percentage in hospital...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

​Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...

Xinyao (Criss) Wang

Northbound Flows (3Q2024): Wait and See Mode

We analyzed Northbound connect data for 3Q2024 and highlight flows for Moutai, Midea, Wuliangye, Catl, Gree Electric Appliances.

Ke Yan, CFA, FRM

STAR50 Index Rebalance: Three Changes a Side; One Surprise Change

There are 3 changes for the STAR50 in March. Estimated one-way turnover is 2.9% resulting in a 1-way trade of CNY 4.08bn with over 2.5x ADV to...

Brian Freitas

STAR50 Index Rebalance Preview: Sustaining Outperformance on Expected Impact

There could be 3 changes for the STAR50 Index in March. One-way turnover is estimated at 2.4% leading to a one-way trade of CNY 2.9bn. The...

Brian Freitas

China's medical insurance fund will increase reimbursement for innovative drug. Commercial insurance need to increase percentage in hospital...

Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...