HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>The centralized procurement would be applied to chemiluminescence products, so the logic changes.</li>
<li>Recently, the National Health Commission and the National Health Care Security Administration jointly issued a new regulation about long-term prescriptions.</li>
<li>There is new information about the national VBP of insulin released.</li>
</ul>Company news:News about the updated progress on new drugs and license agreement of <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a>, <a href="https://www.smartkarma.com/entities/innocare-pharma-ltd" target="_blank" data-smartkarma-citation="entities:28355:1" rel="noopener">InnoCare Pharma Ltd (9969 HK)</a>, <a href="https://www.smartkarma.com/entities/cspc-pharmaceutical-group-ltd" target="_blank" data-smartkarma-citation="entities:229:1" rel="noopener">CSPC Pharmaceutical Group (1093 HK)</a> and <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK).</a>Market review:Last week, stock price for healthcare sector in A share decreased 7.28%, while CSI 300 decreased 3.57% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
The centralized procurement would be applied to chemiluminescence products, so the logic changes.
Recently, the National Health Commission and the National Health Care Security Administration jointly issued a new regulation about long-term prescriptions.
There is new information about the national VBP of insulin released.
Company news:News about the updated progress on new drugs and license agreement of BeiGene Ltd (6160 HK), InnoCare Pharma Ltd (9969 HK), CSPC Pharmaceutical Group (1093 HK) and Innovent Biologics Inc (1801 HK).Market review:Last week, stock price for healthcare sector in A share decreased 7.28%, while CSI 300 decreased 3.57% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:<ul>
<li>Every stock market pullback is a good time to reorganize the logic and to think about what the trends are and what the constant demand is.</li>
<li>The volume-based purchase (VBP) of insulin will begin soon.</li>
<li>Due to the slow international logistics and product export restrictions during the COVID-19, the upstream pharmaceutical equipment, which was previously slow in import substitution, is expected to add the domestic industrial chain and quickly achieve the import substitution. </li>
</ul>Company news: News about the updated progress on drugs of <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a>, <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a>, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> and <a href="https://www.smartkarma.com/entities/cstone-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:27882:1" rel="noopener">CStone Pharmaceuticals (2616 HK)</a>. Market review:Last week, stock price for healthcare sector in A share decreased 4.32%, while CSI 300 decreased 5.46% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Every stock market pullback is a good time to reorganize the logic and to think about what the trends are and what the constant demand is.
The volume-based purchase (VBP) of insulin will begin soon.
Due to the slow international logistics and product export restrictions during the COVID-19, the upstream pharmaceutical equipment, which was previously slow in import substitution, is expected to add the domestic industrial chain and quickly achieve the import substitution. 
Company news: News about the updated progress on drugs of BeiGene Ltd (6160 HK), Everest Medicines (1952 HK), Innovent Biologics Inc (1801 HK) and CStone Pharmaceuticals (2616 HK). Market review:Last week, stock price for healthcare sector in A share decreased 4.32%, while CSI 300 decreased 5.46% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:<ul>
<li>Recently, there is news that insulin could be included in the volume-based purchase (VBP).</li>
<li>With the continuous improvement of the innovation capability of domestic pharmaceutical enterprises and the gradual recognition by foreign enterprises, "going global" has gradually become a common way in the domestic pharmaceutical industry.</li>
<li>As the residents' medical expenses continue to increase, commercial health insurance has become an important part to relieve the pressure of medical insurance fund.</li>
</ul>2. Company news:News about the new agreement and updated progress of new drugs from <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>, <a href="https://www.smartkarma.com/entities/alphamab-oncology" target="_blank" data-smartkarma-citation="entities:28213:1" rel="noopener">Alphamab Co Ltd (9966 HK)</a>, <a href="https://www.smartkarma.com/entities/luye-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:488:1" rel="noopener">Luye Pharma (2186 HK)</a> and <a href="https://www.smartkarma.com/entities/remegen-co-ltd" target="_blank" data-smartkarma-citation="entities:29191:1" rel="noopener">Remegen Co Ltd (9995 HK)</a>.3. Market review:Last week, stock price for healthcare sector in A share decreased 3.7%, while CSI 300 decreased 2.21% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:
Recently, there is news that insulin could be included in the volume-based purchase (VBP).
With the continuous improvement of the innovation capability of domestic pharmaceutical enterprises and the gradual recognition by foreign enterprises, "going global" has gradually become a common way in the domestic pharmaceutical industry.
As the residents' medical expenses continue to increase, commercial health insurance has become an important part to relieve the pressure of medical insurance fund.
2. Company news:News about the new agreement and updated progress of new drugs from Wuxi Biologics (2269 HK), Alphamab Co Ltd (9966 HK), Luye Pharma (2186 HK) and Remegen Co Ltd (9995 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 3.7%, while CSI 300 decreased 2.21% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

<ul>
<li>
Deteriorating credit metrics continue to support our view that the level of risk is increasing within the small-mid cap universe. </li>
<li>
Our screen looks for high valuation multiples presented by candidates with significant earnings growth forecasts, as well as financial indicators that suggest balance sheet distress. Therefore, with the credit markets pointing towards high yield stress, this screen becomes highly relevant.</li>
<li>
15 stocks appear in our Q2 2020 screen. The average stock rank in our list has decreased to 67.5 from 72.1 points since early March 2019. The reduction reflects some of the continued bearish moves in recent weeks within the Asian Universe. We, therefore, feel, as highlighted in other recent commentary, that the market is currently undergoing a defined separation of Quality, Value and relative Momentum.</li>
</ul>



Deteriorating credit metrics continue to support our view that the level of risk is increasing within the small-mid cap universe. 

Our screen looks for high valuation multiples presented by candidates with significant earnings growth forecasts, as well as financial indicators that suggest balance sheet distress. Therefore, with the credit markets pointing towards high yield stress, this screen becomes highly relevant.

15 stocks appear in our Q2 2020 screen. The average stock rank in our list has decreased to 67.5 from 72.1 points since early March 2019. The reduction reflects some of the continued bearish moves in recent weeks within the Asian Universe. We, therefore, feel, as highlighted in other recent commentary, that the market is currently undergoing a defined separation of Quality, Value and relative Momentum.


Screening the Silk Road: Q2 2020 Small-Mid Cap High Risk Names to Avoid

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

Several equity indexes and indicators we watch are telling us an initial primary low has been established for global equities (ACWI-US). At the same time, after this type of major waterfall decline there is often a test of this initial low - and oftentimes we get an undercut of the initial low. Barring approval of a first-line therapy for COVID-19 we are of the belief that we will get an eventual test of this initial low and potentially an undercut. In this report we highlight key technical levels and indicators to watch and suggest investment opportunities with defensive and/or growth characteristics. We are also expanding our recommendations to include bottom-up ideas within several other Sectors.

Several equity indexes and indicators we watch are telling us an initial primary low has been established for global equities (ACWI-US). At the same time, after this type of major waterfall decline there is often a test of this initial low - and oftentimes we get an undercut of the initial low. Barring approval of a first-line therapy for COVID-19 we are of the belief that we will get an eventual test of this initial low and potentially an undercut. In this report we highlight key technical levels and indicators to watch and suggest investment opportunities with defensive and/or growth characteristics. We are also expanding our recommendations to include bottom-up ideas within several other Sectors.

Global Equity Strategy: Initial Low Established

Hong Kong

United Laboratories is a leading integrated pharmaceutical company engaged in the research, development, production, and sales of pharmaceutical products. Its diverse portfolio includes intermediate products, bulk medicines, finished products such as antibiotics and insulin, biopharmaceuticals, and animal healthcare products. The company was founded in 1990 and is headquartered in Hong Kong, with extensive manufacturing operations across China.

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United Laboratories (3933 HK)

China Healthcare Weekly (Aug.20)

The article analyzed the logic change due to the centralized procurement on chemiluminescence products, new regulation about long-term...

Xinyao (Criss) Wang

China Healthcare Weekly (July.30)

This article mainly analyzed the logic and trends when stock market pullback, volume-based purchase of insulin in China, import substitution of...

Xinyao (Criss) Wang

China Healthcare Weekly (Mar.12)

The article analyzed viewpoints of potential VBP on insulin, internationalization of domestic pharmaceutical companies, commercial health...

Xinyao (Criss) Wang

Screening the Silk Road: Q2 2020 Small-Mid Cap High Risk Names to Avoid

Deteriorating credit metrics continue to support our view that the level of risk is increasing within the small-mid cap universe. Our screen...

David Lepper

Global Equity Strategy: Initial Low Established

Several equity indexes and indicators we watch are telling us an initial primary low has been established for global equities (ACWI-US). At the...

Vermilion Research

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