HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Sonoscape Medical Corp / Equity Bottom-Up

<ul>
<li>Sonoscape maintained strong growth momentum in 23H1. Profit margin further improved. The Company has entered a stage where scale effect has emerged. However, declining contract liability balance raised our concern.</li>
<li>Japanese companies setting up factories in China would shake competitive landscape of the domestic market. The anti-corruption campaign could lead to “unexpected impact” on performance in 23H2. </li>
<li>We lowered 2023 revenue forecast to RMB2 billion. After negative factors are fully priced in, share price would rebound. </li>
</ul>


Sonoscape maintained strong growth momentum in 23H1. Profit margin further improved. The Company has entered a stage where scale effect has emerged. However, declining contract liability balance raised our concern.
Japanese companies setting up factories in China would shake competitive landscape of the domestic market. The anti-corruption campaign could lead to “unexpected impact” on performance in 23H2. 
We lowered 2023 revenue forecast to RMB2 billion. After negative factors are fully priced in, share price would rebound. 


High Conviction Update: Sonoscape (300633.CH) - Stock Price to Rebound After Temporary Headwinds

Shanghai Shyndec Pharmaceutical / Equity Bottom-Up

<ul>
<li>China plans to issue ultra long-term special treasury bond (about RMB1 trillion) to promote large-scale medical equipment renewal, which is expected to boost domestic demand in medical device sector. </li>
<li>Various regions (e.g. Beijing, Hainan, Guangzhou, Zhuhai) have issued separate supporting policies for innovative drug industry. It may be too early to completely lose hope of Chinese innovative drugs.</li>
<li>There is “horizontal competition” issue between Taiji and <a href="https://www.smartkarma.com/entities/shanghai-shyndec-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:1952:1" rel="noopener">Shanghai Shyndec Pharmaceutical (600420 CH)</a>, which is the underlying logic for potential spin-offs and integrations within Taiji and China TCM before 2025.</li>
</ul>


China plans to issue ultra long-term special treasury bond (about RMB1 trillion) to promote large-scale medical equipment renewal, which is expected to boost domestic demand in medical device sector. 
Various regions (e.g. Beijing, Hainan, Guangzhou, Zhuhai) have issued separate supporting policies for innovative drug industry. It may be too early to completely lose hope of Chinese innovative drugs.
There is “horizontal competition” issue between Taiji and Shanghai Shyndec Pharmaceutical (600420 CH), which is the underlying logic for potential spin-offs and integrations within Taiji and China TCM before 2025.


China Healthcare Weekly (Apr14)- Shanghai Shyndec Pharma,Innovative Drug Policy,Ultra Long-Term Bond

Equity Analyst, Event-driven, Quiddity Advisors

Janaghan Jeyakumar, CFA

Equity Analyst, Event-driven

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Xinjiang Tianshan Cement A / Event-Driven

<ul>
<li>CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.</li>
<li>In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in June 2024.</li>
<li>There are some changes to the list of expected ADDs/DELs since I published my last insight on this roughly a month ago.</li>
</ul>


CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in June 2024.
There are some changes to the list of expected ADDs/DELs since I published my last insight on this roughly a month ago.


Quiddity Leaderboard CSI 300/​​500 Jun 24: Exp. One-Way Flow Tops US$3bn Due to Passive AUM Surge

<ul>
<li>Recent share-price declines in healthcare is mainly related to anti-corruption campaigns. Here're some updates.We recommend investors not to rush to buy the dip, but wait for the bottom.</li>
<li>We recommend A-share healthcare companies to buy back shares/increase dividends, in which case, despite slowing growth, A-shares are still the RMB-asset with the greatest potential for increases in expected returns.</li>
<li>
<a href="https://www.smartkarma.com/entities/cansino-biologics-inc" target="_blank" data-smartkarma-citation="entities:27739:1" rel="noopener">CanSino Biologics (6185 HK)</a> has entered a Framework Agreement with AstraZeneca, but investors should not be overly optimistic about the short-term or even medium-term performance contribution brought by this cooperation.</li>
</ul>


Recent share-price declines in healthcare is mainly related to anti-corruption campaigns. Here're some updates.We recommend investors not to rush to buy the dip, but wait for the bottom.
We recommend A-share healthcare companies to buy back shares/increase dividends, in which case, despite slowing growth, A-shares are still the RMB-asset with the greatest potential for increases in expected returns.

CanSino Biologics (6185 HK) has entered a Framework Agreement with AstraZeneca, but investors should not be overly optimistic about the short-term or even medium-term performance contribution brought by this cooperation.


China Healthcare Weekly (Aug11)-Anti-Corruption Update, Increase A-Share Shareholder Return, CanSino

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

<ul>
<li>It was a busy week with index rebalance implementations and announcements of index changes.</li>
<li>The coming week has the KOSPI200 and KOSDAQ150 rebalancing on Thursday and a bunch of onshore China indices rebalancing on Friday.</li>
<li>There were big inflows to China ETFs during the week while the largest inflows went to the <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> ETF.</li>
</ul>


It was a busy week with index rebalance implementations and announcements of index changes.
The coming week has the KOSPI200 and KOSDAQ150 rebalancing on Thursday and a bunch of onshore China indices rebalancing on Friday.
There were big inflows to China ETFs during the week while the largest inflows went to the Tracker Fund of Hong Kong Ltd (2800 HK) ETF.


Index Rebalance & ETF Flow Recap: CSI300/500, Chinext, China Semi Chips, Nifty Next50, SET50, REMX

China

Sonoscape Medical Corp. manufactures medical equipment. The Company develops, produces, and sells ultrasound diagnostic systems, transducers, and other medical equipment products. Sonoscape Medical serves customers worldwide.

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Sonoscape Medical Corp (300633 CH)

High Conviction Update: Sonoscape (300633.CH) - Stock Price to Rebound After Temporary Headwinds

Sonoscape's 23H1 performance met our expectations, but it also faces challenges such as China's anti-corruption and capital outflow. We think solid...

Xinyao (Criss) Wang

China Healthcare Weekly (Apr14)- Shanghai Shyndec Pharma,Innovative Drug Policy,Ultra Long-Term Bond

China will issue special treasury bonds for healthcare.New policy boosts hope for innovative drugs.Horizontal competition in Taiji and Shanghai...

Xinyao (Criss) Wang

Quiddity Leaderboard CSI 300/500 Jun 24: Exp. One-Way Flow Tops US$3bn Due to Passive AUM Surge

Significant amounts of new passive money has flowed into the CSI 300 and CSI 500 index resulting in a sharp increase in our one-way flow...

Janaghan Jeyakumar, CFA

Index Rebalance & ETF Flow Recap: CSI300/500, Chinext, China Semi Chips, Nifty Next50, SET50, REMX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

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52-week Range

Market Cap (USDm)

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Dividend (Yield)

High Conviction Update: Sonoscape (300633.CH) - Stock Price to Rebound After Temporary Headwinds

Sonoscape's 23H1 performance met our expectations, but it also faces challenges such as China's anti-corruption and capital outflow. We think solid...

Xinyao (Criss) Wang

China Healthcare Weekly (Apr14)- Shanghai Shyndec Pharma,Innovative Drug Policy,Ultra Long-Term Bond

​China will issue special treasury bonds for healthcare.New policy boosts hope for innovative drugs.Horizontal competition in Taiji and Shanghai...

Xinyao (Criss) Wang

Quiddity Leaderboard CSI 300/​​500 Jun 24: Exp. One-Way Flow Tops US$3bn Due to Passive AUM Surge

Significant amounts of new passive money has flowed into the CSI 300 and CSI 500 index resulting in a sharp increase in our one-way flow...

Janaghan Jeyakumar, CFA

China Healthcare Weekly (Aug11)-Anti-Corruption Update, Increase A-Share Shareholder Return, CanSino

We updated the impact of anti-corruption in different sectors.Healthcare company need to increase share buyback/dividend to improve shareholder'...

Xinyao (Criss) Wang

Index Rebalance & ETF Flow Recap: CSI300/500, Chinext, China Semi Chips, Nifty Next50, SET50, REMX

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

China will issue special treasury bonds for healthcare.New policy boosts hope for innovative drugs.Horizontal competition in Taiji and Shanghai...

Quiddity Leaderboard CSI 300/500 Jun 24: Exp. One-Way Flow Tops US$3bn Due to Passive AUM Surge