HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>China's retail pharmacy market has entered a new era of integration as the industry growth is slowing down. After JD Health/Alibaba Health enter this industry, the game rule changes. </li>
<li>In the short term, the offline chain pharmacies, JD Health, Alibaba Health, etc. would still have the opportunity to carve up market share under the trend of prescription outflow.</li>
<li>In the long term, it depends on who're the first to establish new omni-channel retail scenarios, because the "new retail" model would comprehensively surpass traditional model from cost to experience.</li>
</ul>


China's retail pharmacy market has entered a new era of integration as the industry growth is slowing down. After JD Health/Alibaba Health enter this industry, the game rule changes. 
In the short term, the offline chain pharmacies, JD Health, Alibaba Health, etc. would still have the opportunity to carve up market share under the trend of prescription outflow.
In the long term, it depends on who're the first to establish new omni-channel retail scenarios, because the "new retail" model would comprehensively surpass traditional model from cost to experience.


China Retail Pharmacy Industry - New Game Rule, New Challenges, New Outlook

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Shenzhen Mindray Bio-Medical Electronics / Event-Driven

<ul>
<li>Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.</li>
<li>Overall, net inflow over the past week was ~US$0.83bn, split between Shanghai (+US$1.16bn) and Shenzhen (-US$0.32bn).</li>
<li>The largest inflows were into <a href="https://www.smartkarma.com/entities/kweichow-moutai-co-ltd-a" target="_blank" data-smartkarma-citation="entities:1553:1" rel="noopener">Kweichow Moutai (600519 CH)</a> and <a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical (300760 CH)</a>. The largest outflows were in <a href="https://www.smartkarma.com/entities/yunnan-chuangxin-new-material" target="_blank" data-smartkarma-citation="entities:27135:1" rel="noopener">Yunnan Energy New Material (002812 CH)</a> and <a href="https://www.smartkarma.com/entities/byd-co-ltd" target="_blank" data-smartkarma-citation="entities:26048:1" rel="noopener">BYD (002594 CH)</a>.</li>
</ul>


Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
Overall, net inflow over the past week was ~US$0.83bn, split between Shanghai (+US$1.16bn) and Shenzhen (-US$0.32bn).
The largest inflows were into Kweichow Moutai (600519 CH) and Shenzhen Mindray Bio-Medical (300760 CH). The largest outflows were in Yunnan Energy New Material (002812 CH) and BYD (002594 CH).


Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

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 monthly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Consumer Staples ($4,362m of outflows) and financials ($1,929m of outflows) led the outflows in October.</li>
<li>We highlight inflows into Tianqi Lithium, BOE Technology, and outflows from Moutai, Ping An Bank/Insurance, Wulianye, Yili.</li>
</ul>


We analyze the monthly Shanghai/Shenzhen northbound Connect flows with our data engine.
Consumer Staples ($4,362m of outflows) and financials ($1,929m of outflows) led the outflows in October.
We highlight inflows into Tianqi Lithium, BOE Technology, and outflows from Moutai, Ping An Bank/Insurance, Wulianye, Yili.


Northbound Flows Monthly (September): One Year High Outflows of $8.3bn

Equity Bottom-Up

Dingdang Health Technology Gro / Equity Bottom-Up

<ul>
<li>Dingdang has formed a system integrating front-end consultation, self-built pharmacies and back-end distribution. The “heavy asset model” leads to large liabilities, negative equity balance, cash flow pressure and poor profitability.</li>
<li>Dingdang lacks core competitiveness in introducing customer flow or rapidly expanding user base. Together with fierce competition, the gap between the Company and JD Health/Alibaba Health will become bigger.</li>
<li>It’s difficult to achieve high profits based on the business model when break-even is barely achieved. Dingdang has it hard to successfully run through its ecosystem.We’re bearish on the outlook.</li>
</ul>


Dingdang has formed a system integrating front-end consultation, self-built pharmacies and back-end distribution. The “heavy asset model” leads to large liabilities, negative equity balance, cash flow pressure and poor profitability.
Dingdang lacks core competitiveness in introducing customer flow or rapidly expanding user base. Together with fierce competition, the gap between the Company and JD Health/Alibaba Health will become bigger.
It’s difficult to achieve high profits based on the business model when break-even is barely achieved. Dingdang has it hard to successfully run through its ecosystem.We’re bearish on the outlook.


Dingdang Health Technology (9886HK)-Business Model Face Test; Hard to Run the Ecosystem Successfully

Alibaba Health Information Tec / Equity Bottom-Up

<ul>
<li>Alibaba Health’s core pharmaceutical direct sales business is facing challenges in terms of increasing competition as well as lower revenue growth and margins, dragging down the overall performance.</li>
<li>The recent new policies about online drug sales on third-party digital healthcare platforms and online diagnosis and treatment would add more uncertainties on Alibaba Health’s business and outlook.</li>
<li>If such unfavorable trend continues, the gap between Alibaba Health and JD Health would be wider. It’s not easy to break the deadlock. Investors may need to take heed.</li>
</ul>


Alibaba Health’s core pharmaceutical direct sales business is facing challenges in terms of increasing competition as well as lower revenue growth and margins, dragging down the overall performance.
The recent new policies about online drug sales on third-party digital healthcare platforms and online diagnosis and treatment would add more uncertainties on Alibaba Health’s business and outlook.
If such unfavorable trend continues, the gap between Alibaba Health and JD Health would be wider. It’s not easy to break the deadlock. Investors may need to take heed.


Alibaba Health Information Technology (241.HK) - It’s Not Easy to Break a Deadlock

China

Yixintang Pharmaceutical Group Co., Ltd. operates pharmaceutical stores. The Company retails Chinese medicines, western medicines, and other products. Yixintang Pharmaceutical Group also provides medical equipment.

Yixintang Pharmaceutical Group (002727 CH)

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Yixintang Pharmaceutical Group (002727 CH)

China Retail Pharmacy Industry - New Game Rule, New Challenges, New Outlook

China's retail pharmacy market has entered a new era with new game rule.As industry growth is slowing down, which companies are the first to...

Xinyao (Criss) Wang

Shanghai/Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

Overall, net inflow over the past week in the HK -Shanghai-Shenzhen Northbound Connect facilities was ~US$0.83bn, split between Shanghai...

David Blennerhassett

Northbound Flows Monthly (September): One Year High Outflows of $8.3bn

We analyzed the Shanghai/Shenzhen Connect Scheme for October and highlight flows for Tianqi Lithium, BOE Technology, Moutai, Ping An Bank...

Ke Yan, CFA, FRM

Dingdang Health Technology (9886HK)-Business Model Face Test; Hard to Run the Ecosystem Successfully

Dingdang's "heavy asset model" leads to large liabilities/negative equity balance/cash flow pressure/poor profitability. Dingdang is hard to...

Xinyao (Criss) Wang

Alibaba Health Information Technology (241.HK) - It’s Not Easy to Break a Deadlock

Alibaba Health is facing challenges in both business and policy sides,with declining performance.The gap with JD Health becomes wider.It’s not easy...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Retail Pharmacy Industry - New Game Rule, New Challenges, New Outlook

China's retail pharmacy market has entered a new era with new game rule.As industry growth is slowing down, which companies are the first to...

Xinyao (Criss) Wang

Shanghai/​​​​​​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (25 November 2022)

Overall, net inflow over the past week in the HK -Shanghai-Shenzhen Northbound Connect facilities was ~US$0.83bn, split between Shanghai...

David Blennerhassett

Northbound Flows Monthly (September): One Year High Outflows of $8.3bn

We analyzed the Shanghai/Shenzhen Connect Scheme for October and highlight flows for Tianqi Lithium, BOE Technology, Moutai, Ping An Bank...

Ke Yan, CFA, FRM

Dingdang Health Technology (9886HK)-Business Model Face Test; Hard to Run the Ecosystem Successfully

Dingdang's "heavy asset model" leads to large liabilities/negative equity balance/cash flow pressure/poor profitability. Dingdang is hard to...

Xinyao (Criss) Wang

Alibaba Health Information Technology (241.HK) - It’s Not Easy to Break a Deadlock

Alibaba Health is facing challenges in both business and policy sides,with declining performance.The gap with JD Health becomes wider.It’s not easy...

Xinyao (Criss) Wang

Shanghai/Shenzhen Northbound Connect: Weekly Moves (25 November 2022)