HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Last week, centralized procurement results of orthopedic spinal consumables were released, with an average price reduction of 84%. We analyzed the impact on related companies. </li>
<li>If medical insurance reimbursement standards of Hunan Provincial are followed, there will be few real clinical needs for surgical robots for many hospitals, mainly to meet scientific research needs instead.</li>
<li>Under the appearance of the popularity of CGT CDMO, there are some hidden worries. Investors are recommended to be rational due to the overcapacity issue in the future.</li>
</ul>


Last week, centralized procurement results of orthopedic spinal consumables were released, with an average price reduction of 84%. We analyzed the impact on related companies. 
If medical insurance reimbursement standards of Hunan Provincial are followed, there will be few real clinical needs for surgical robots for many hospitals, mainly to meet scientific research needs instead.
Under the appearance of the popularity of CGT CDMO, there are some hidden worries. Investors are recommended to be rational due to the overcapacity issue in the future.


China Healthcare Weekly (Sep.30) - Orthopedics VBP, CGT CDMO, Surgical Robots, Bottom of HKEX

<ul>
<li>The 7th National VBP released results. 60 kinds of drugs won the bidding successfully, with price reduction of 48% on average. We analyzed its impact on companies. </li>
<li>The newly issued document about the payment management measures for new technology out of CHS-DRG payment scope is a solid encouragement to innovation and an important policy reform signal.</li>
<li>The national centralized procurement of orthopedic spine consumables has officially started, which is beneficial to those leading companies with complete product line.</li>
</ul>


The 7th National VBP released results. 60 kinds of drugs won the bidding successfully, with price reduction of 48% on average. We analyzed its impact on companies. 
The newly issued document about the payment management measures for new technology out of CHS-DRG payment scope is a solid encouragement to innovation and an important policy reform signal.
The national centralized procurement of orthopedic spine consumables has officially started, which is beneficial to those leading companies with complete product line.


China Healthcare Weekly (July.15)-7th VBP, Policy Correction Signs, Orthopedic Spine Consumables VBP

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

Star Sports Medicine / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/star-sports-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:45717:1" rel="noopener">Star Sports Medicine (1609 HK)</a> is in an excellent position to gain market share from the overseas players in China, given its increased popularity among hospitals.</li>
<li>The company is expected to achieve an EPS CAGR of 21.5% between FY25 and FY28F, fueled by revenue growth and a steady expansion in gross margin.</li>
<li>Its IPO is priced at 20.1x FY26F PER. By attributing a 20% premium over the global average, it equals a fair price of HK$106.7, an upside of 8%.</li>
</ul>



Star Sports Medicine (1609 HK) is in an excellent position to gain market share from the overseas players in China, given its increased popularity among hospitals.
The company is expected to achieve an EPS CAGR of 21.5% between FY25 and FY28F, fueled by revenue growth and a steady expansion in gross margin.
Its IPO is priced at 20.1x FY26F PER. By attributing a 20% premium over the global average, it equals a fair price of HK$106.7, an upside of 8%.


Star Sports Medicine (1609 HK) IPO: Possibly Some Upside

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

Cambricon Technologies  Lt / Index Rebalance

<ul>
<li>There are 3 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>, 10 changes for the STAR100 Index and 2 changes for the STAR Chip Index at the March rebalance.</li>
<li>We estimate one-way turnover of 9% 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">STAR50 INDEX</a> resulting in a round-trip trade of CNY 27.6bn (US$4bn). One-way turnover for the STAR100 Index is 9.2%.</li>
<li>With the National Team redeeming ETFs, the adds have outperformed the deletes for all the indices and that could continue ahead of implementation of the changes.</li>
</ul>


There are 3 constituent changes for the SSE STAR50 (STAR50 INDEX), 10 changes for the STAR100 Index and 2 changes for the STAR Chip Index at the March rebalance.
We estimate one-way turnover of 9% for the STAR50 INDEX resulting in a round-trip trade of CNY 27.6bn (US$4bn). One-way turnover for the STAR100 Index is 9.2%.
With the National Team redeeming ETFs, the adds have outperformed the deletes for all the indices and that could continue ahead of implementation of the changes.


STAR50/STAR100/STAR Chip Index Rebalance: Adds Outperform Deletes as Trade Nears US$6bn

Moore Threads Technology / Index Rebalance

<ul>
<li>With the review period nearly complete, we forecast 4 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> and 10 constituent changes for the STAR100 Index in March.</li>
<li>We estimate turnover of 9.1% 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> and 9.6% for the STAR100 Index. The estimated round-trip net trade is CNY 28.55bn (US$4.1bn).</li>
<li>There has been big unwinding of ETF holdings (likely the National Team at work) recently and that reduces the flow and impact for the index changes.</li>
</ul>


With the review period nearly complete, we forecast 4 constituent changes for the SSE STAR50 (STAR50 INDEX) and 10 constituent changes for the STAR100 Index in March.
We estimate turnover of 9.1% for the SSE STAR50 (STAR50 INDEX) and 9.6% for the STAR100 Index. The estimated round-trip net trade is CNY 28.55bn (US$4.1bn).
There has been big unwinding of ETF holdings (likely the National Team at work) recently and that reduces the flow and impact for the index changes.


STAR50/STAR100 Index Rebalance Preview: Huge Outperformance as National Team Redeems ETF Holdings

China

Shandong Weigao Orthopaedic Device Company Limited produces and sells medical devices. The Company manufactures and sells orthopedic implants and other products. Shandong Weigao Orthopaedic Device markets its products throughout China.

Shandong Weigao Orthopaedic De (688161 CH)

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52-week Range	0.00 - 0.00
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Shandong Weigao Orthopaedic De (688161 CH)

China Healthcare Weekly (Sep.30) - Orthopedics VBP, CGT CDMO, Surgical Robots, Bottom of HKEX

Orthopedics VBP result was released,we analyzed the impact on companies; There will be few real clinical needs for surgical robots; There're hidden...

Xinyao (Criss) Wang

China Healthcare Weekly (July.15)-7th VBP, Policy Correction Signs, Orthopedic Spine Consumables VBP

The 7th National VBP released results. New technology payment management measures out of CHS-DRG scope is a policy correction signal.Orthopedic...

Xinyao (Criss) Wang

Star Sports Medicine (1609 HK) IPO: Possibly Some Upside

Star Sports Medicine is poised to capture market share in China with growing hospital popularity, a projected 3-year EPS CAGR of 21.5%, IPO priced...

Osbert Tang, CFA

STAR50/STAR100/STAR Chip Index Rebalance: Adds Outperform Deletes as Trade Nears US$6bn

There are 3 changes for the STAR50, 10 changes for the STAR100, 2 changes for the STAR Chip in March. The adds have outperformed the deletes across...

Brian Freitas

STAR50/STAR100 Index Rebalance Preview: Huge Outperformance as National Team Redeems ETF Holdings

4 changes forecast for the STAR50 and 10 for the STAR100 resulting in a net round-trip trade of US$4.1bn. The National Team has been redeeming...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Healthcare Weekly (Sep.30) - Orthopedics VBP, CGT CDMO, Surgical Robots, Bottom of HKEX

Orthopedics VBP result was released,we analyzed the impact on companies; There will be few real clinical needs for surgical robots; There're hidden...

Xinyao (Criss) Wang

China Healthcare Weekly (July.15)-7th VBP, Policy Correction Signs, Orthopedic Spine Consumables VBP

The 7th National VBP released results. New technology payment management measures out of CHS-DRG scope is a policy correction signal.Orthopedic...

Xinyao (Criss) Wang

Star Sports Medicine (1609 HK) IPO: Possibly Some Upside

​Star Sports Medicine is poised to capture market share in China with growing hospital popularity, a projected 3-year EPS CAGR of 21.5%, IPO priced...

Osbert Tang, CFA

STAR50/STAR100/STAR Chip Index Rebalance: Adds Outperform Deletes as Trade Nears US$6bn

There are 3 changes for the STAR50, 10 changes for the STAR100, 2 changes for the STAR Chip in March. The adds have outperformed the deletes across...

Brian Freitas

STAR50/STAR100 Index Rebalance Preview: Huge Outperformance as National Team Redeems ETF Holdings

4 changes forecast for the STAR50 and 10 for the STAR100 resulting in a net round-trip trade of US$4.1bn. The National Team has been redeeming...

Brian Freitas

Star Sports Medicine is poised to capture market share in China with growing hospital popularity, a projected 3-year EPS CAGR of 21.5%, IPO priced...