HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Guangdong Rong Tai Pharmaceutical / Equity Capital Markets

Guangdong Rong Tai Pharmaceutical (RTP HK)

<ul>
<li>As a digital circulation platform, Rong Tai’s business essence is a “middleman”, with limited added value and a naturally lower profit margin than that of R&amp;D-oriented pharmaceutical companies.</li>
<li>Rong Tai’s profitability is disappointing. It’s difficult for the Company to bring decent returns to investors. This actually reflects from the side the flaws of Rong Tai's business model/channel resources.</li>
<li>Reasonable valuation is RMB1.6bn, lower than post-money valuation after Series B Financing(RMB2.7bn). If market sentiment is pessimistic at the time of IPO, there could be big downward space for valuation.</li>
</ul>


As a digital circulation platform, Rong Tai’s business essence is a “middleman”, with limited added value and a naturally lower profit margin than that of R&amp;D-oriented pharmaceutical companies.
Rong Tai’s profitability is disappointing. It’s difficult for the Company to bring decent returns to investors. This actually reflects from the side the flaws of Rong Tai's business model/channel resources.
Reasonable valuation is RMB1.6bn, lower than post-money valuation after Series B Financing(RMB2.7bn). If market sentiment is pessimistic at the time of IPO, there could be big downward space for valuation.


Pre-IPO Guangdong Rong Tai Pharmaceutical - Low Profitability Is a Pain Point

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

Contemporary Amperex Technology / Index Rebalance

Contemporary Amperex Technology (3750 HK)

<ul>
<li>Post market close on Friday, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 5 December.</li>
<li>We highlight 6 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.</li>
<li>
<a href="https://www.smartkarma.com/entities/contemporary-amperex-technology-catl-co-limited" target="_blank" data-smartkarma-citation="entities:45179:1" rel="noopener">CATL (3750 HK)</a> will have a 6-month trading history by implementation of the index changes and is a high probability inclusion to the index. But cornerstone lock-up ends tomorrow.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 5 December.
We highlight 6 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.

CATL (3750 HK) will have a 6-month trading history by implementation of the index changes and is a high probability inclusion to the index. But cornerstone lock-up ends tomorrow.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Dec25

<ul>
<li>Post market close on Friday, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 5 September.</li>
<li>We highlight 6 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.</li>
<li>
<a href="https://www.smartkarma.com/entities/contemporary-amperex-technology-catl-co-limited" target="_blank" data-smartkarma-citation="entities:45179:1" rel="noopener">CATL</a> completes 3 months of listing just prior to the review meeting date and is a dark horse candidate, though the committee could let the stock season for another quarter.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 5 September.
We highlight 6 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.

CATL completes 3 months of listing just prior to the review meeting date and is a dark horse candidate, though the committee could let the stock season for another quarter.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Sep25

<ul>
<li>Post market close on Friday, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 6 June.</li>
<li>With no constituent changes, one-way turnover will be 1.9% with 3 stocks being capped and FAF changes for a few stocks due to a methodology change for Secondary Listings. </li>
<li>We highlight 7 stocks that have a higher probability of being added to the index. Everything depends on the index committee, and we would not be surprised by zero changes.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 June.
With no constituent changes, one-way turnover will be 1.9% with 3 stocks being capped and FAF changes for a few stocks due to a methodology change for Secondary Listings. 
We highlight 7 stocks that have a higher probability of being added to the index. Everything depends on the index committee, and we would not be surprised by zero changes.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Jiangsu Hengrui Medicine / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a>, a leading Chinese pharmaceutical company, has filed its PHIP for an H Share listing to raise US$2 billion.     </li>
<li>
<a href="https://www.smartkarma.com/entities/jiangsu-hengrui-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:44224:1" rel="noopener">Jiangsu Hengrui Pharmaceuticals (JHR HK)</a> ranked first among Chinese pharma companies in revenue from NME drugs in 2023 and the number of commercialised NME drugs in 2024.</li>
<li>The investment case rests on its product portfolio, strong revenue growth, rising profitability, cash generation, strong balance sheet and undemanding valuation. </li>
</ul>



Jiangsu Hengrui Medicine (600276 CH), a leading Chinese pharmaceutical company, has filed its PHIP for an H Share listing to raise US$2 billion.     

Jiangsu Hengrui Pharmaceuticals (JHR HK) ranked first among Chinese pharma companies in revenue from NME drugs in 2023 and the number of commercialised NME drugs in 2024.
The investment case rests on its product portfolio, strong revenue growth, rising profitability, cash generation, strong balance sheet and undemanding valuation. 


Jiangsu Hengrui Pharma H Share Listing: The Investment Case

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)

Pre-IPO Guangdong Rong Tai Pharmaceutical - Low Profitability Is a Pain Point

Rong Tai's digital circulation platform operates as a "middleman" with limited added value,leading to low profitability/potential downward...

Xinyao (Criss) Wang

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Dec25

We highlight 6 potential adds to the HSI in Dec. CATL is a high prob add and has a lock-up expiry tomorrow. Estimated turnover is 1.9% and trade is...

Brian Freitas

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Sep25

We highlight 6 potential adds to the HSI in Sep. CATL has an outside chance of inclusion. Estimated turnover is less than 3% and the trade is...

Brian Freitas

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25

We highlight 7 potential inclusions for the HSI in June, though the index committee could make no changes as we have seen in the past. Pop Mart...

Brian Freitas

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Pre-IPO Guangdong Rong Tai Pharmaceutical - Low Profitability Is a Pain Point

​Rong Tai's digital circulation platform operates as a "middleman" with limited added value,leading to low profitability/potential downward...

Xinyao (Criss) Wang

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Dec25

We highlight 6 potential adds to the HSI in Dec. CATL is a high prob add and has a lock-up expiry tomorrow. Estimated turnover is 1.9% and trade is...

Brian Freitas

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for Sep25

We highlight 6 potential adds to the HSI in Sep. CATL has an outside chance of inclusion. Estimated turnover is less than 3% and the trade is...

Brian Freitas

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25

We highlight 7 potential inclusions for the HSI in June, though the index committee could make no changes as we have seen in the past. Pop Mart...

Brian Freitas

Jiangsu Hengrui Pharma H Share Listing: The Investment Case

Hengrui Pharma has filed its PHIP for an H Share listing to raise US$2 billion. In this note, we discuss the key tenets of the investment case.

Arun George

Rong Tai's digital circulation platform operates as a "middleman" with limited added value,leading to low profitability/potential downward...