HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

Tasly Pharmaceutical Group / Event-Driven

<ul>
<li>Since Tasly's performance growth has long stagnated and Yan Kaijing has no better way to turn the situation around, selling Tasly to SOE and cashing out becomes a good choice.</li>
<li>Upon completion of all approvals (e.g. the SASAC, SAMR, shareholders' meeting of CR Sanjiu, etc.), the deal aims to be completed in 25Q1. We think the deal will get up.</li>
<li>Tasly’s share price should be at least higher than RMB14.85/share based on the cash transfer price. Its P/E would reach 30 in the future after the integration with CR Sanjiu.</li>
</ul>


Since Tasly's performance growth has long stagnated and Yan Kaijing has no better way to turn the situation around, selling Tasly to SOE and cashing out becomes a good choice.
Upon completion of all approvals (e.g. the SASAC, SAMR, shareholders' meeting of CR Sanjiu, etc.), the deal aims to be completed in 25Q1. We think the deal will get up.
Tasly’s share price should be at least higher than RMB14.85/share based on the cash transfer price. Its P/E would reach 30 in the future after the integration with CR Sanjiu.


CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update - This Is Already a Done Deal

China Traditional Chinese Medicine / Event-Driven

<ul>
<li>Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance. </li>
<li>Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was "inappropriate".</li>
<li>If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.</li>
</ul>


Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance. 
Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was "inappropriate".
If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.


China TCM (570.HK) Privatization Update - The Long Stop Date to Extend or Not?

<ul>
<li>We have seen positive progress of the privatization of China TCM, which is still considered an important project on the agenda. CNPGC’s new leadership is very supportive of the deal.</li>
<li>The SAMR process has begun. There should be no problem to meet the Pre-Conditions. If the approval process takes more time, Long Stop Date would be extended.</li>
<li>Considering China Resources has decided to acquire Tasly, we think the integration of TCM business by CNPGC is expected to accelerate. We remain optimistic and this deal will get up. </li>
</ul>


We have seen positive progress of the privatization of China TCM, which is still considered an important project on the agenda. CNPGC’s new leadership is very supportive of the deal.
The SAMR process has begun. There should be no problem to meet the Pre-Conditions. If the approval process takes more time, Long Stop Date would be extended.
Considering China Resources has decided to acquire Tasly, we think the integration of TCM business by CNPGC is expected to accelerate. We remain optimistic and this deal will get up. 


China TCM (570.HK) Privatization Update- Pre-Conditions Won't Be “An Obstacle” to the Entire Process

China Resources Sanjiu Medical & Pharma / Event-Driven

<ul>
<li>China Resources Sanjiu plans to acquire 28% stake in Tasly for RMB6.21 billion at RMB14.85/share. The acquisition of Tasly is in line with the strategic direction of 14th Five-Year Plan.</li>
<li>China Resources is positioned as a leading enterprise in modern industrial chain of TCM by the SASAC.Due to policy support, TCM assets are more likely to be favored by SOEs.</li>
<li>The deal is positive for Tasly, whose valuation has room to rise further, but the market seems "skeptical" about China Resources Sanjiu's decision, leading to a lackluster share price reaction. </li>
</ul>


China Resources Sanjiu plans to acquire 28% stake in Tasly for RMB6.21 billion at RMB14.85/share. The acquisition of Tasly is in line with the strategic direction of 14th Five-Year Plan.
China Resources is positioned as a leading enterprise in modern industrial chain of TCM by the SASAC.Due to policy support, TCM assets are more likely to be favored by SOEs.
The deal is positive for Tasly, whose valuation has room to rise further, but the market seems "skeptical" about China Resources Sanjiu's decision, leading to a lackluster share price reaction. 


CR Sanjiu (000999.CH) To Acquire Tasly Pharma (600535.CH) - SOEs Have High Enthusiasm for TCM Assets

Equity Capital Markets

<ul>
<li>The growth factor drug market is highly competitive. Many competing products have been on the market for many years with NRDL reimbursement coverage and also accumulated rich recognition from doctors/patients.</li>
<li>Even if Pro-101 is approved for market launch, B&amp;K may have to reduce its price largely and invest heavily in market education/promotion. B&amp;K’s commercialization capability still needs to be verified.</li>
<li>Valuation of B&amp;K would be lower than peers. It is hard for B&amp;K to receive expected valuation premium since its latest round of post investment valuation is already RMB3.3 billion.</li>
</ul>


The growth factor drug market is highly competitive. Many competing products have been on the market for many years with NRDL reimbursement coverage and also accumulated rich recognition from doctors/patients.
Even if Pro-101 is approved for market launch, B&amp;K may have to reduce its price largely and invest heavily in market education/promotion. B&amp;K’s commercialization capability still needs to be verified.
Valuation of B&amp;K would be lower than peers. It is hard for B&amp;K to receive expected valuation premium since its latest round of post investment valuation is already RMB3.3 billion.


Pre-IPO B&K Corporation - Valuation Performance Could Be Disappointing

China

Tasly Pharmaceutical Group Co.,Ltd. manufactures drug products. The Company develops and sells traditional Chinese medicine, biological medicine, chemical medicine, and other related products. Tasly Pharmaceutical Group markets its products throughout China.

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Tasly Pharmaceutical Group (600535 CH)

CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update - This Is Already a Done Deal

Tasly's stagnant growth prompts Yan Kaijing to sell it to SOE.This is a done deal, which aims to be completed in 25Q1. Tasly's valuation is...

Xinyao (Criss) Wang

China TCM (570.HK) Privatization Update - The Long Stop Date to Extend or Not?

The announcement is “annoying” as “It remains uncertain whether such consent from the Investor Group will be obtained”.The risk is since it's not...

Xinyao (Criss) Wang

China TCM (570.HK) Privatization Update- Pre-Conditions Won't Be “An Obstacle” to the Entire Process

The applications have been submitted to SASAC/MOC/NDRC, and the Offeror/China TCM also modified the submitted documentation in light of the...

Xinyao (Criss) Wang

CR Sanjiu (000999.CH) To Acquire Tasly Pharma (600535.CH) - SOEs Have High Enthusiasm for TCM Assets

China Resources Sanjiu to acquire 28% stake in Tasly for RMB6.21 billion, aligning with strategic goals of 14th Five-Year Plan. Market is...

Xinyao (Criss) Wang

Pre-IPO B&K Corporation - Valuation Performance Could Be Disappointing

Pro-101will face fierce competition. Due to uncertain market acceptance, B&K has to invest heavily in market education. Valuation of peers is under...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update - This Is Already a Done Deal

​Tasly's stagnant growth prompts Yan Kaijing to sell it to SOE.This is a done deal, which aims to be completed in 25Q1. Tasly's valuation is...

Xinyao (Criss) Wang

China TCM (570.HK) Privatization Update - The Long Stop Date to Extend or Not?

The announcement is “annoying” as “It remains uncertain whether such consent from the Investor Group will be obtained”.The risk is since it's not...

Xinyao (Criss) Wang

China TCM (570.HK) Privatization Update- Pre-Conditions Won't Be “An Obstacle” to the Entire Process

The applications have been submitted to SASAC/MOC/NDRC, and the Offeror/China TCM also modified the submitted documentation in light of the...

Xinyao (Criss) Wang

CR Sanjiu (000999.CH) To Acquire Tasly Pharma (600535.CH) - SOEs Have High Enthusiasm for TCM Assets

​China Resources Sanjiu to acquire 28% stake in Tasly for RMB6.21 billion, aligning with strategic goals of 14th Five-Year Plan. Market is...

Xinyao (Criss) Wang

Pre-IPO B&K Corporation - Valuation Performance Could Be Disappointing

Pro-101will face fierce competition. Due to uncertain market acceptance, B&K has to invest heavily in market education. Valuation of peers is under...

Xinyao (Criss) Wang

Tasly's stagnant growth prompts Yan Kaijing to sell it to SOE.This is a done deal, which aims to be completed in 25Q1. Tasly's valuation is...

China Resources Sanjiu to acquire 28% stake in Tasly for RMB6.21 billion, aligning with strategic goals of 14th Five-Year Plan. Market is...