HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>The margins of pharmaceutical circulation B2B business is low. If there’s not enough incremental space of terminal customers, the simple B2B trading model is difficult to form a leapfrog growth.</li>
<li>Based on YSB’s business model, if terminal customers choose to use other platforms like JD Health/Alibaba Health, etc., YSB would face the risk of losing upstream and downstream users.</li>
<li>So far, we haven’t seen that YSB has established core competitiveness or moat to secure the terminal customers pool, casting doubts on its business model, investment logic and outlook.</li>
</ul>


The margins of pharmaceutical circulation B2B business is low. If there’s not enough incremental space of terminal customers, the simple B2B trading model is difficult to form a leapfrog growth.
Based on YSB’s business model, if terminal customers choose to use other platforms like JD Health/Alibaba Health, etc., YSB would face the risk of losing upstream and downstream users.
So far, we haven’t seen that YSB has established core competitiveness or moat to secure the terminal customers pool, casting doubts on its business model, investment logic and outlook.


Pre-IPO YSB Inc (YSB.HK) - The Business Model Is Facing Challenges

Equity Bottom-Up

Sinopharm Group Co Ltd H / 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

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares Global Healthcare ETF / Technical Analysis

<ul>
<li>As recently as last week and throughout February/March we have recommended shifting to defensives due to our belief that $93 will cap upside on the $ACWI in 2023.</li>
<li>MSCI ACWI defensive Sectors including Health Care, Utilities, and Consumer Staples are hitting 2+ month RS highs, and are staging bullish price and RS reversals, as are gold miners (GDX-US).</li>
<li>This confirms our belief that now is the time to be tactically overweight defensives. We highlight buys in Health Care, Gold Miners, and Utilities, with the vast majority from Europe</li>
</ul>


As recently as last week and throughout February/March we have recommended shifting to defensives due to our belief that $93 will cap upside on the $ACWI in 2023.
MSCI ACWI defensive Sectors including Health Care, Utilities, and Consumer Staples are hitting 2+ month RS highs, and are staging bullish price and RS reversals, as are gold miners (GDX-US).
This confirms our belief that now is the time to be tactically overweight defensives. We highlight buys in Health Care, Gold Miners, and Utilities, with the vast majority from Europe


Defensives Worthy of a Tactical Overweight; Buys in Global Health Care, Gold Miners, and Utilities

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

China

Sinopharm Group Co Ltd is a pharmacy distribution company. The Company also owns several pharmacy enterprise groups in different industries such as logistics, retail stores, pharmaceutical manufacturing, and chemical testing.

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Sinopharm Group Co Ltd H (1099 HK)

Pre-IPO YSB Inc (YSB.HK) - The Business Model Is Facing Challenges

Terminal customers are key resources for YSB’s all businesses, but YSB hasn't built core competitiveness/moat to secure terminal customer pool....

Xinyao (Criss) Wang

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

Defensives Worthy of a Tactical Overweight; Buys in Global Health Care, Gold Miners, and Utilities

We have recommended shifting to defensives throughout Feb/March due to our belief that $93 will cap upside on $ACWI. We highlight buys within...

Vermilion Research

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

Sinopharm reported 6% revenue and 10% EPS growth in 2022, driven by pharmaceutical distribution business. Favorable industry tailwind and China...

Tina Banerjee

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

Only ~1.5% of total issued shares are free to trade following the global. I would be cautious investing here given the vast overhang from the IPO...

David Blennerhassett

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