HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Zhou Liu Fu Jewellery / Equity Capital Markets

<ul>
<li>The 2024 China Hospital Medication Market Pattern Report has been released, and we have found some interesting points worth the attention.</li>
<li>CNPGC plans to acquire 21.03% of Pacific Shuanglin's shares at a premium of over 30% and become the actual controller. Due to horizontal competition issue, there’s potential M&amp;A/privatization opportunities here.</li>
<li>The IPO of Zhou Liu Fu is fairly priced. But fundamentals would not improve due to high gold prices and would deteriorate instead. Share price upside potential could be lower-than-expected.</li>
</ul>


The 2024 China Hospital Medication Market Pattern Report has been released, and we have found some interesting points worth the attention.
CNPGC plans to acquire 21.03% of Pacific Shuanglin's shares at a premium of over 30% and become the actual controller. Due to horizontal competition issue, there’s potential M&amp;A/privatization opportunities here.
The IPO of Zhou Liu Fu is fairly priced. But fundamentals would not improve due to high gold prices and would deteriorate instead. Share price upside potential could be lower-than-expected.


China Healthcare Weekly (Jun.22) - CNPGC to Acquire Shuanglin, Thoughts on Zhou Liu Fu's IPO Pricing

Thematic (Sector/Industry)

<ul>
<li>APIs, generic drugs, CXO, low-end medical consumables will be hit the most due to tariffs.Investors are advised to be cautious on these subsectors as companies’ performance would be negatively affected. </li>
<li>As the tariff war is heating up, blood products, innovative medical device, innovative drugs, chain pharmacies, innovative medical services, pharmaceutical distribution business could be "safe haven assets" for investors. </li>
<li>The logic behind tariffs is to attack China's effective supply and trigger China's overcapacity problem, thereby weakening effective demand and reducing capital accumulation rate, so as to attack the RMB.</li>
</ul>


APIs, generic drugs, CXO, low-end medical consumables will be hit the most due to tariffs.Investors are advised to be cautious on these subsectors as companies’ performance would be negatively affected. 
As the tariff war is heating up, blood products, innovative medical device, innovative drugs, chain pharmacies, innovative medical services, pharmaceutical distribution business could be "safe haven assets" for investors. 
The logic behind tariffs is to attack China's effective supply and trigger China's overcapacity problem, thereby weakening effective demand and reducing capital accumulation rate, so as to attack the RMB.


The Impact of Trump's Tariffs on China Healthcare - The Victims, And the Safe Haven Assets

Event-Driven

Beijing Tiantan Biological Products / Event-Driven

<ul>
<li>Guangming District State-owned Assets Supervision and Administration Bureau reached a cooperation agreement with China National Biotec to establish a joint venture, which will become the new controlling shareholder of Weiguang.</li>
<li>Since Tiantan is already Sinopharm’s subsidiary, there will be horizontal competition issue in the field of blood product business between Tiantan and Weiguang, mainly due to significant business overlap.</li>
<li>Some spin-offs and integrations are expected between Tiantan and Weiguang. As the reform of SOE enters a new stage, the two companies could end up very different.</li>
</ul>


Guangming District State-owned Assets Supervision and Administration Bureau reached a cooperation agreement with China National Biotec to establish a joint venture, which will become the new controlling shareholder of Weiguang.
Since Tiantan is already Sinopharm’s subsidiary, there will be horizontal competition issue in the field of blood product business between Tiantan and Weiguang, mainly due to significant business overlap.
Some spin-offs and integrations are expected between Tiantan and Weiguang. As the reform of SOE enters a new stage, the two companies could end up very different.


Tiantan (600161CH) To Acquire Weiguang (002880CH)- New King Rises in China's Blood Products Industry

China

Shenzhen Weiguang Biological Products Co., Ltd manufactures special pharmaceuticals. The Company mainly researches, develops, produces, and sells blood products. Shenzhen Weiguang Biological Products serves customers in China.

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