HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Sichuan Biokin Pharmaceutical / Equity Bottom-Up

<ul>
<li>The national centralized procurement of high-value medical consumables such as intraocular lens (IOL) and sports medicine medical consumables is about to begin. We listed the companies that could be affected.</li>
<li>The instability of policies seems to be a consensus among investors regarding China healthcare. However, if truly understand the logic behind policy changes and industry shifts, investors will maintain optimism.</li>
<li>We analyzed the key points of Biokin. Its valuation is ridiculously high considering the current pipeline situation and commercialization outlook. We think the bubble will eventually burst (e.g. 50% downside).</li>
</ul>


The national centralized procurement of high-value medical consumables such as intraocular lens (IOL) and sports medicine medical consumables is about to begin. We listed the companies that could be affected.
The instability of policies seems to be a consensus among investors regarding China healthcare. However, if truly understand the logic behind policy changes and industry shifts, investors will maintain optimism.
We analyzed the key points of Biokin. Its valuation is ridiculously high considering the current pipeline situation and commercialization outlook. We think the bubble will eventually burst (e.g. 50% downside).


China Healthcare Weekly (Sep.22) - Medical Device VBP, Restore Optimism on Healthcare, Biokin Pharma

Shanghai Haohai Biological Tec / Equity Bottom-Up

<ul>
<li>The General Office of the State Council issued favorable policy for TCM industry. However, TCM still has to face VBP, therefore <a href="https://www.smartkarma.com/entities/zhangzhou-pientzehuang-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:15709:1" rel="noopener">Zhangzhou Pientzehuang Pharmaceutical Co. (600436 CH)</a> and Gushengtang are our top picks..</li>
<li>Pfizer is in talks to acquire Seagen in a deal worth over US$30 billion, but we remain conservative about whether this transaction would ultimately bring expected contributions to Pfizer.</li>
<li>Haohai’s business model fails to bring ideal performance. Increasing competition/declining gross margin cast doubts on the outlook of medical aesthetics business. We’re not optimistic about its potential valuation upside.</li>
</ul>


The General Office of the State Council issued favorable policy for TCM industry. However, TCM still has to face VBP, therefore Zhangzhou Pientzehuang Pharmaceutical Co. (600436 CH) and Gushengtang are our top picks..
Pfizer is in talks to acquire Seagen in a deal worth over US$30 billion, but we remain conservative about whether this transaction would ultimately bring expected contributions to Pfizer.
Haohai’s business model fails to bring ideal performance. Increasing competition/declining gross margin cast doubts on the outlook of medical aesthetics business. We’re not optimistic about its potential valuation upside.


China Healthcare Weekly (March.3) - TCM New Policy, Pfizer to Acquire Seagen, Haohai Biological

Bloomage Biotechnology  Lt / Equity Bottom-Up

<p>In January, 2021, National Health Commission has approved hyaluronic acid as a new food ingredient, which could be used in common foods. This marks the further opening of China's hyaluronic acid food market and the new development milestone of China's hyaluronic acid industry. <a href="https://www.smartkarma.com/entities/bloomage-biotechnology-corporation-a" target="_blank" data-smartkarma-citation="entities:30390:1" rel="noopener">Bloomage Biotechnology Corporation-A (688363 CH)</a> is the global leader in the raw materials of hyaluronic acid, and it has broken through the whole industrial chain from the upstream hyaluronic acid raw materials to the downstream of the medical beauty, functional skin care and functional food. Besides, because of the new regulation, the Company's food grade raw materials business and functional food products are expected to shift from export to domestic sales, further opening the Company's growth space. It is expected that Bloomage’s future growth would be promising.</p>

In January, 2021, National Health Commission has approved hyaluronic acid as a new food ingredient, which could be used in common foods. This marks the further opening of China's hyaluronic acid food market and the new development milestone of China's hyaluronic acid industry. Bloomage Biotechnology Corporation-A (688363 CH) is the global leader in the raw materials of hyaluronic acid, and it has broken through the whole industrial chain from the upstream hyaluronic acid raw materials to the downstream of the medical beauty, functional skin care and functional food. Besides, because of the new regulation, the Company's food grade raw materials business and functional food products are expected to shift from export to domestic sales, further opening the Company's growth space. It is expected that Bloomage’s future growth would be promising.

Bloomage Biotechnology (688363.CH) - Accelerated Growth with the Approval of New Regulation

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.0% as of Jul 28th.</li>
<li>The average A-H premium changed by 0.8ppt week on week, led by information technology, communication services, energy and offset by health care, consumer staples.</li>
<li>We highlight weekly changes in A-H premium for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.0% as of Jul 28th.
The average A-H premium changed by 0.8ppt week on week, led by information technology, communication services, energy and offset by health care, consumer staples.
We highlight weekly changes in A-H premium for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.


A-H Premium Weekly (Jul 28th): China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC

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

<ul>
<li>The index committee has used a 6-month minimum listing history and that results in two changes. This is the first rebalance with less than 5 changes at a review.</li>
<li>One way turnover is estimated at 1.03% and will result in a one-way trade of CNY 1,025m. Given the adds are new listings, there will be some reverse funding flow.</li>
<li>There appears to be little pre-positioning on the adds while there is a bigger buildup on the deletes.</li>
</ul>


The index committee has used a 6-month minimum listing history and that results in two changes. This is the first rebalance with less than 5 changes at a review.
One way turnover is estimated at 1.03% and will result in a one-way trade of CNY 1,025m. Given the adds are new listings, there will be some reverse funding flow.
There appears to be little pre-positioning on the adds while there is a bigger buildup on the deletes.


STAR50 Index Rebalance: Two Changes in June (As Expected)

China

Shanghai Haohai Biological Technology Co., Ltd. manufactures absorbable biomedical materials. The Company manufactures and sells intraocular lens, medical sodium hyaluronate, medical chitosan, medical collage sponge, and other products. Shanghai Haohai Biological Technology markets its products worldwide.

Shanghai Haohai Biological Tec (688366 CH)

52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Shanghai Haohai Biological Tec (688366 CH)

China Healthcare Weekly (Sep.22) - Medical Device VBP, Restore Optimism on Healthcare, Biokin Pharma

National VBP of intraocular lens/sports medicine medical consumables begins.Investors will maintain optimism when understand the logic behind...

Xinyao (Criss) Wang

China Healthcare Weekly (March.3) - TCM New Policy, Pfizer to Acquire Seagen, Haohai Biological

New favorable policy for TCM industry was released. We analyzed our top picks. Pfizer is in talks to acquire Seagen, but we're conservative about...

Xinyao (Criss) Wang

Bloomage Biotechnology (688363.CH) - Accelerated Growth with the Approval of New Regulation

The article analyzed Bloomage in terms of major business (raw material, medical products, functional skin care and functional food after the new...

Xinyao (Criss) Wang

A-H Premium Weekly (Jul 28th): China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC

We analyzed A-H premium changes in the past week and highlight A-H premium changes for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.

Ke Yan, CFA, FRM

STAR50 Index Rebalance: Two Changes in June (As Expected)

There are 2 changes for the STAR50 Index as a 6-month minimum listing history is used. There is little increase in excess volume on the adds while...

Brian Freitas

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)