HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Yichang HEC Changjiang Pharma / Equity Bottom-Up

<ul>
<li>For the upcoming 11th national VBP, we think some core and big varieties could be included, involving companies such as Sunshine Lake Pharma, <a href="https://www.smartkarma.com/entities/huadong-medicine-co-ltd-a" target="_blank" data-smartkarma-citation="entities:18522:1" rel="noopener">Huadong Medicine</a>, <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group-co" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a>, etc.</li>
<li>Anjoy’s IPO is fairly priced. Reasonable valuation range is 10-15x P/E.However, unfavorable factors have led us to take a conservative attitude towards the upside potential of stock price after IPO.</li>
<li>For Sunshine Lake Pharma's privatization of HEC Pharma, Composite Document was despatched. However, if investors truly understand "the essence" of HEC Pharma, they will be calm/rational about this absorption merger.</li>
</ul>


For the upcoming 11th national VBP, we think some core and big varieties could be included, involving companies such as Sunshine Lake Pharma, Huadong Medicine, Hansoh Pharmaceutical (3692 HK), etc.
Anjoy’s IPO is fairly priced. Reasonable valuation range is 10-15x P/E.However, unfavorable factors have led us to take a conservative attitude towards the upside potential of stock price after IPO.
For Sunshine Lake Pharma's privatization of HEC Pharma, Composite Document was despatched. However, if investors truly understand "the essence" of HEC Pharma, they will be calm/rational about this absorption merger.


China Healthcare Weekly (Jul.6)- Anjoy’s IPO Debut, HEC CJ Pharma's Merger with Sunshine Lake Pharma

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Yichang HEC Changjiang Pharma / Event-Driven

<ul>
<li>A little over a year ago, I wrote about <a href="https://www.smartkarma.com/entities/yichang-hec-changjiang-pharmaceutical" target="_blank" data-smartkarma-citation="entities:21040:1" rel="noopener">Yichang HEC Changjiang Pharma (1558 HK)</a>'s overly complicated scrip Offer in <a href="https://skr.ma/RSCyX" target="_blank" rel="noopener">Yichang HEC (1558 HK): Absorption Via Speculative Scrip. Avoid</a>.</li>
<li>In summary, Yichang HEC shareholders were being offered 0.263614 "Offeror H shares". These consideration shares are unlisted. The Offeror being Yichang HEC's controlling shareholder (51.41%).</li>
<li>
The Composite Doc and the Offeror's Listing by Way Of Introduction Doc are out.  The independent H-shareholder vote is the 21st July. Shareholders should vote this down.</li>
</ul>


A little over a year ago, I wrote about Yichang HEC Changjiang Pharma (1558 HK)'s overly complicated scrip Offer in Yichang HEC (1558 HK): Absorption Via Speculative Scrip. Avoid.
In summary, Yichang HEC shareholders were being offered 0.263614 "Offeror H shares". These consideration shares are unlisted. The Offeror being Yichang HEC's controlling shareholder (51.41%).

The Composite Doc and the Offeror's Listing by Way Of Introduction Doc are out.  The independent H-shareholder vote is the 21st July. Shareholders should vote this down.


Yichang HEC (1558 HK): Speculative Scrip Offer? No Thanks - Vote No

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.

<ul>
<li>The precondition for Sunshine Lake Pharma's privatisation of HEC Pharma was satisfied on 27 June. The offer is 0.263614 new offeror H Share per HEC share and HK$1.50 special dividend.</li>
<li>The vote on 21 July is low-risk as no independent H Shareholder comes close to the blocking stake, which is 4.61% of the outstanding shares (6.20% of H Shares).</li>
<li>The appraised value is HK$19.36, but this is a finger-in-the-sky valuation as it marginally increased from HK$19.30 despite the offeror’s weak 2024 results and limited progress on commercialising its pipeline.</li>
</ul>


The precondition for Sunshine Lake Pharma's privatisation of HEC Pharma was satisfied on 27 June. The offer is 0.263614 new offeror H Share per HEC share and HK$1.50 special dividend.
The vote on 21 July is low-risk as no independent H Shareholder comes close to the blocking stake, which is 4.61% of the outstanding shares (6.20% of H Shares).
The appraised value is HK$19.36, but this is a finger-in-the-sky valuation as it marginally increased from HK$19.30 despite the offeror’s weak 2024 results and limited progress on commercialising its pipeline.


HEC ChangJiang Pharma (1558 HK): Finally a Vote, but the Offer Value Is Wrapped in Uncertainty

Haitong Securities Co Ltd (H) / Event-Driven

<ul>
<li>A month after China's leading state-backed brokerages, <a href="https://www.smartkarma.com/entities/guotai-junan-securities-co-ltd-5dfaf2c5-76d3-4f34-a77d-118787fd7091" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Junan Securities (2611 HK)</a> and <a href="https://www.smartkarma.com/entities/haitong-securities-co-ltd-h" target="_blank" data-smartkarma-citation="entities:5665:1" rel="noopener">Haitong Securities (H) (6837 HK)</a>, announced an intention to merge, we have a <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1009/2024100900977.pdf" target="_blank" rel="noopener">firm deal</a>. </li>
<li>Via a share swap, each Haitong H share may be exchanged for 0.62 H shares of GJS. A similar ratio is in place for the As. Cash options are afforded</li>
<li>Conditions include GJS and Haitong shareholder approval; plus the usual suspects on the regulatory front. The key risk, as with <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">TCM (570 HK)</a>'s Offer, is one of timing.</li>
</ul>


A month after China's leading state-backed brokerages, Guotai Junan Securities (2611 HK) and Haitong Securities (H) (6837 HK), announced an intention to merge, we have a firm deal. 
Via a share swap, each Haitong H share may be exchanged for 0.62 H shares of GJS. A similar ratio is in place for the As. Cash options are afforded
Conditions include GJS and Haitong shareholder approval; plus the usual suspects on the regulatory front. The key risk, as with TCM (570 HK)'s Offer, is one of timing.


Guotai Junan (2611 HK)/Haitong (6837 HK)'s Merger: A Win For H-Shareholders

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 31st.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for CNOOC, SMIC, Alibaba, China Mobile, CSPC Pharma, Tencent, Meituan, Li Auto.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of October 31st.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for CNOOC, SMIC, Alibaba, China Mobile, CSPC Pharma, Tencent, Meituan, Li Auto.


HK Connect Flows Weekly (Oct 31st): CNOOC, SMIC, Alibaba, China Mobile, CSPC Pharma, Tencent

Hong Kong

YiChang HEC ChangJiang Pharmaceutical Co Ltd develops a variety of drugs.  The Company develops and sells drugs for anti-virus, metabolic diseases, cardiovascular, and more.

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Yichang HEC Changjiang Pharma (1558 HK)

China Healthcare Weekly (Jul.6)- Anjoy’s IPO Debut, HEC CJ Pharma's Merger with Sunshine Lake Pharma

11th VBP may include big variety of Sunshine Lake Pharma/Huadong/Hansoh. Anjoy's IPO is fairly priced but shares upside is limited.HEC Pharma's...

Xinyao (Criss) Wang

Yichang HEC (1558 HK): Speculative Scrip Offer? No Thanks - Vote No

Maybe this is worth HK$19.36/share. Maybe Yichang HEC would be better equipped with R&D capability, and a larger suite of drugs on Offer from the...

David Blennerhassett

HEC ChangJiang Pharma (1558 HK): Finally a Vote, but the Offer Value Is Wrapped in Uncertainty

The vote is low-risk. However, the appraised value is a finger-in-the-sky valuation, and perplexingly, marginally increased despite the offeror's...

Arun George

Guotai Junan (2611 HK)/Haitong (6837 HK)'s Merger: A Win For H-Shareholders

Done and done. After bigly moves in both stock, I see the gross/annualised return at 21%/22%, assuming late 3Q25. If you can take down borrow...

David Blennerhassett

HK Connect Flows Weekly (Oct 31st): CNOOC, SMIC, Alibaba, China Mobile, CSPC Pharma, Tencent

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for CNOOC, SMIC, Alibaba, China Mobile, CSPC Pharma, Tencent,...

Ke Yan, CFA, FRM

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