HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

<ul>
<li>2024 NRDL negotiation results were released. Some eye-catching drugs were included this time, which will bring challenges to companies such as <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent</a>, RemeGen, <a href="https://www.smartkarma.com/entities/gan-lee-pharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:36237:1" rel="noopener">Gan &amp; Lee Pharmaceuticals</a>, <a href="https://www.smartkarma.com/entities/xizang-haisco-pharmaceutical-group-coltd" target="_blank" data-smartkarma-citation="entities:4779:1" rel="noopener">Haisco Pharmaceutical</a>, etc..</li>
<li>There have been a big “expectation gap” for biotech companies in Hong Kong stock market - It's a mismatch between what the market thinks and what's actually happening.</li>
<li>The progress of Henlius’ privatization is still slower-than-expected. We also do not know how this privatization ranks in terms of strategic significance of capital operations within Fosun Pharma's system.</li>
</ul>


2024 NRDL negotiation results were released. Some eye-catching drugs were included this time, which will bring challenges to companies such as Innovent, RemeGen, Gan &amp; Lee Pharmaceuticals, Haisco Pharmaceutical, etc..
There have been a big “expectation gap” for biotech companies in Hong Kong stock market - It's a mismatch between what the market thinks and what's actually happening.
The progress of Henlius’ privatization is still slower-than-expected. We also do not know how this privatization ranks in terms of strategic significance of capital operations within Fosun Pharma's system.


China Healthcare Weekly (Dec.1)- 2024 NRDL Result, Expectation Gap for Biotech, Henlius' Wide Spread

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Keisei Electric Railway Co / Event-Driven

<ul>
<li>Remain BULLISH <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway Co (9009 JP) </a> with low conviction. This is buying on narrative rather than fundamentals but there is no need to not get involved.</li>
<li>
<a href="https://www.smartkarma.com/entities/vitasoy-intl-holdings-ltd" target="_blank" data-smartkarma-citation="entities:2807:1" rel="noopener">Vitasoy Intl Holdings (345 HK)</a>'s share price run up is excessive as Philip Ng and<a href="https://www.smartkarma.com/entities/yeo-hiap-seng-ltd" target="_blank" data-smartkarma-citation="entities:9051:1" rel="noopener">Yeo Hiap Seng (YHS SP)</a> over-extend their hand.</li>
<li>
<a href="https://www.smartkarma.com/entities/nec-networks-system-integr" target="_blank" data-smartkarma-citation="entities:16396:1" rel="noopener">Nec Networks (1973 JP)</a> has yet to trade below terms. The premium is small, perhaps reflecting the risk NEC will lower the minimum threshold. But there is still a fight here.</li>
</ul>


Remain BULLISH Keisei Electric Railway Co (9009 JP)  with low conviction. This is buying on narrative rather than fundamentals but there is no need to not get involved.

Vitasoy Intl Holdings (345 HK)'s share price run up is excessive as Philip Ng andYeo Hiap Seng (YHS SP) over-extend their hand.

Nec Networks (1973 JP) has yet to trade below terms. The premium is small, perhaps reflecting the risk NEC will lower the minimum threshold. But there is still a fight here.


Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group

<ul>
<li>I tally 48 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.</li>
<li>Three new deals this week: NBIOs for <a href="https://www.smartkarma.com/entities/sg-fleet-group-ltd" target="_blank" data-smartkarma-citation="entities:13984:1" rel="noopener">SG Fleet (SGF AU)</a> and <a href="https://www.smartkarma.com/entities/avjennings-ltd" target="_blank" data-smartkarma-citation="entities:12578:1" rel="noopener">AVJennings Ltd (AVJ AU)</a>; and <a href="https://www.smartkarma.com/entities/shandong-hi-speed-new-energy-g" target="_blank" data-smartkarma-citation="entities:6927:1" rel="noopener">Shandong Hi-Speed New Energy  (1250 HK)</a>'s MGO. <a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a> also suspended.</li>
<li>Key updates/news took place on: <a href="https://www.smartkarma.com/entities/hotel-property-investments" target="_blank" data-smartkarma-citation="entities:9850:1" rel="noopener">Hotel Property Investments (HPI AU)</a>, <a href="https://www.smartkarma.com/entities/capitol-health-ltd" target="_blank" data-smartkarma-citation="entities:14504:1" rel="noopener">Capitol Health (CAJ AU)</a>, <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a> and <a href="https://www.smartkarma.com/entities/samty-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:43711:1" rel="noopener">SAMTY HOLDINGS (187A JP)</a>.
</li>
</ul>


I tally 48 - mostly firm, mostly Asia-Pac - transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals this week: NBIOs for SG Fleet (SGF AU) and AVJennings Ltd (AVJ AU); and Shandong Hi-Speed New Energy  (1250 HK)'s MGO. Fosun Tourism (1992 HK) also suspended.
Key updates/news took place on: Hotel Property Investments (HPI AU), Capitol Health (CAJ AU), Shanghai Henlius Biotech (2696 HK), Seven &amp; I Holdings (3382 JP) and SAMTY HOLDINGS (187A JP).



Mostly) Asia-Pac M&A: SG Fleet, Shandong Hi-Speed New Energy, HPI, Capitol Health, Henlius, 7 & I

<ul>
<li>On the 24th June, <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Fosun Pharmaceutical (2196 HK)</a> made a HK$24.60/share Offer, in cash, for H-shares not held in <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>. A scrip alternative was subsequently afforded.</li>
<li>This is a pre-conditional Offer, subject to NDRC, Mofcom and SAFE - followed by a Scheme-like vote for independent H-shareholders. Henlius has announced that NDRC approval has now been secured.</li>
<li>Trading at a massive gross spread of ~21.5% compared to ~10% just prior to <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a>'s capitulation. This is excessive.</li>
</ul>


On the 24th June, Fosun Pharmaceutical (2196 HK) made a HK$24.60/share Offer, in cash, for H-shares not held in Shanghai Henlius Biotech (2696 HK). A scrip alternative was subsequently afforded.
This is a pre-conditional Offer, subject to NDRC, Mofcom and SAFE - followed by a Scheme-like vote for independent H-shareholders. Henlius has announced that NDRC approval has now been secured.
Trading at a massive gross spread of ~21.5% compared to ~10% just prior to China Traditional Chinese Medicine (570 HK)'s capitulation. This is excessive.


Henlius (2696 HK): The Spread Should Narrow After NDRC Approval

<ul>
<li>On the surface, the 24Q3 results are not bad, but if take a close look, the real situation of Fosun Pharma is still not optimistic.</li>
<li>There are rumors that Fosun Pharma may have encountered funding issues, thus casting a shadow over the prospects of this privatization.</li>
<li>The motivation and underlying logic for Fosun Pharma to privatize Henlius are both solid.Potential risks currently on the table are funding issues and whether Pre-Condition approval process will go smoothly.</li>
</ul>


On the surface, the 24Q3 results are not bad, but if take a close look, the real situation of Fosun Pharma is still not optimistic.
There are rumors that Fosun Pharma may have encountered funding issues, thus casting a shadow over the prospects of this privatization.
The motivation and underlying logic for Fosun Pharma to privatize Henlius are both solid.Potential risks currently on the table are funding issues and whether Pre-Condition approval process will go smoothly.


Shanghai Henlius Biotech (2696.HK) Privatization Update - These Are the Potential Risks Behind

China

Shanghai Henlius Biotech, Inc develops and produces drugs. The Company develops and produces monoclonal antibody biosimilar drugs, bio betters, novel monoclonal antibodys, and other drugs. Shanghai Henlius Biotech throughout China.

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Shanghai Henlius Biotech (2696 HK)

China Healthcare Weekly (Dec.1)- 2024 NRDL Result, Expectation Gap for Biotech, Henlius' Wide Spread

2024 NRDL results released, posing new challenges. Expectation gap for biotech in HK provides opportunities. Henlius' privatization progress is...

Xinyao (Criss) Wang

Last Week in Event SPACE: Keisei Electric Railway, Vitasoy, NEC Network, ESR Group

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Mostly) Asia-Pac M&A: SG Fleet, Shandong Hi-Speed New Energy, HPI, Capitol Health, Henlius, 7 & I

This insight provides a summary of gross/annualised spreads (on deals discussed on Smartkarma) across Asia-Pacific as at the last trading date, and...

David Blennerhassett

Henlius (2696 HK): The Spread Should Narrow After NDRC Approval

Currently trading at an excessive gross/annualised spread of 21.5%/39.6%, assuming late-June payment. I'd get involved here. I'd pay up to HK$22.70...

David Blennerhassett