HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Pharmaceutical distribution business is about competing for scale/capital costs. Sinopharm mainly relies on economies of scale to establish competitiveness.But this business wouldn’t generate high profit margin due to industry characteristics.</li>
<li>The opportunity lies in the logic of import substitution and the products out of VBP scope. Stable or declining financial cost ratio is also a key driving force for profitability.</li>
<li>We think Sinopharm’s revenue and net profit could achieve double-digit growth in 2023. The valuation is already not cheap. It may be wiser to take profits in time.</li>
</ul>


Pharmaceutical distribution business is about competing for scale/capital costs. Sinopharm mainly relies on economies of scale to establish competitiveness.But this business wouldn’t generate high profit margin due to industry characteristics.
The opportunity lies in the logic of import substitution and the products out of VBP scope. Stable or declining financial cost ratio is also a key driving force for profitability.
We think Sinopharm’s revenue and net profit could achieve double-digit growth in 2023. The valuation is already not cheap. It may be wiser to take profits in time.


Sinopharm Group Co (1099.HK) - Double-Digit Growth Is Expected in 2023; Margins Have Room to Improve

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sinopharm-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:32:1" rel="noopener">Sinopharm Group Co Ltd H (1099 HK)</a> reported strong 2022 results, with annual revenue exceeding RMB550B and net profit achieving 10% YoY growth. Growth was driven by pharmaceutical distribution business.</li>
<li>EPS increased 10% YoY to RMB2.73, ahead of consensus of RMB2.64. The company has increased its final dividend to RMB0.82 per share from RMB0.75 per share in the prior year.</li>
<li>With favorable industry tailwind and China reopening, consensus expects Sinopharm to report double-digit revenue and EPS growth through 2025.</li>
</ul>



Sinopharm Group Co Ltd H (1099 HK) reported strong 2022 results, with annual revenue exceeding RMB550B and net profit achieving 10% YoY growth. Growth was driven by pharmaceutical distribution business.
EPS increased 10% YoY to RMB2.73, ahead of consensus of RMB2.64. The company has increased its final dividend to RMB0.82 per share from RMB0.75 per share in the prior year.
With favorable industry tailwind and China reopening, consensus expects Sinopharm to report double-digit revenue and EPS growth through 2025.


Sinopharm Group (1099 HK): Strong 2022 Results; Double-Digit Top and Bottom-Line Growth to Continue

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Sipai Health Technology / Equity Bottom-Up

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/sipai-health-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:36662:1" rel="noopener">Sipai Health Technology (314 HK)</a></strong>, a Chinese digital healthcare platform backed by <strong><a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a></strong> continues to eke out new highs. </li>
<li>Sipai closed up 34% on its debut two days before Xmas last year, and is currently up 74% on its IPO price of HK$18.60.</li>
<li>The company is loss-making. However, FY22 financials showed those losses continue to fall. </li>
</ul>



Sipai Health Technology (314 HK), a Chinese digital healthcare platform backed by Tencent (700 HK) continues to eke out new highs. 
Sipai closed up 34% on its debut two days before Xmas last year, and is currently up 74% on its IPO price of HK$18.60.
The company is loss-making. However, FY22 financials showed those losses continue to fall. 


Sipai Health Technology: Hidden Benefits, Not-So-Hidden Risks

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>End December was the end of the review cutoff for a lot of indices that will rebalance within the next couple of months.</li>
<li>
<a href="https://www.smartkarma.com/entities/pexa-group-ltd" target="_blank" data-smartkarma-citation="entities:34716:1" rel="noopener">PEXA Group (PXA AU)</a> replaces <a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> in the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> at the close on 12 January.</li>
<li>There were big outflows from Hong Kong and China focused ETFs led by <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF (2828 HK)</a> and <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong Ltd (2800 HK)</a>.</li>
</ul>


End December was the end of the review cutoff for a lot of indices that will rebalance within the next couple of months.

PEXA Group (PXA AU) replaces Pendal Group (PDL AU) in the S&amp;P/ASX 200 (AS51 INDEX) at the close on 12 January.
There were big outflows from Hong Kong and China focused ETFs led by Hang Seng H Share Index ETF (2828 HK) and Tracker Fund of Hong Kong Ltd (2800 HK).


Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, HSI, HSCI, KS200, KQ150, CSI300, SENSEX, LQ45, PSEi

<ul>
<li>There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.</li>
<li>We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.</li>
<li>All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.</li>
</ul>


There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.
We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.
All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.


HSI Index Rebalance Preview: Better Late Than Never?

China

Sinopharm Group is a leading Chinese distributor and retailer of pharmaceutical and healthcare products, medical devices, and a supply chain service provider. The company also engages in the production and sale of pharmaceutical products, chemical reagents, and laboratory supplies. It was incorporated in January 2003 and is headquartered in Shanghai, China.

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Sinopharm Group (1099 HK)

Sinopharm Group Co (1099.HK) - Double-Digit Growth Is Expected in 2023; Margins Have Room to Improve

Sinopharm relies on economies of scale to establish competitiveness, but it faces low profit margin problem, which still has room to improve....

Xinyao (Criss) Wang