In today’s briefing:
- China Healthcare Weekly (Jan.12) – Haier Biomedical and RAAS Terminated Their Merger
- Yibin Bank (2596 HK): 100% IPO Float Fails to Secure Global Index Inclusion
- BUY/SELL/HOLD: Hong Kong Stock Update (January 10)
- Container Shipping: Mean Reversion in 2025, Yes, but to WHICH Mean?
China Healthcare Weekly (Jan.12) – Haier Biomedical and RAAS Terminated Their Merger
- Since the room for China’s medical insurance fund to continue to increase reimbursement for high quality innovative drugs is still large, we are optimistic about 2025 NRDL negotiation.
- Although it’s inevitable trend for commercial insurance to cover innovative drugs, it won’t truly improve the payment end until the contribution of commercial insurance to hospital revenue increase to 10-15%.
- Due to the complexity of the transaction, Haier Biomedical and RAAS terminated their merger. We think disagreements would easily emerge regarding the core issue in this transaction (i.e. the price).
Yibin Bank (2596 HK): 100% IPO Float Fails to Secure Global Index Inclusion
- Yibin City Commercial Bank Co Ltd (2596 HK) is scheduled to debut on the HKEX on 13 January 2025 at a market capitalization of ~$1.6bn.
- The IPO free float is 100% as the offered shares represent all the listed shares. However, the significant amount of unlisted shares result in a low fcap.
- The security can be added at the June 2025 review if the stock price mimics the IPO debut of Bloks (325 HK) and surges by ~84%.
BUY/SELL/HOLD: Hong Kong Stock Update (January 10)
- Hong Kong and China shares have outperformed most Asian markets over the last year. In HK the consumer discretionary sector has lost strength and momentum over the last 4 weeks.
- CSSC (Hong Kong) Shipping Co Ltd (3877 HK) was rated BUY after reporting strong results. Analysts have a target price of $2.50 on the stock.
- Bosideng International Holdings (3998 HK) has shown earnings growth exceeding revenue growth for the last seven years. Technically, the stock looks weak near term, but analysts project 60% upside.
Container Shipping: Mean Reversion in 2025, Yes, but to WHICH Mean?
- We expect container shipping profits to begin to revert to historical levels in 2025
- Between 2009 and 2019, Evergreen Marine’s mean OpInc margin was negative 0.8%
- We believe path to mean industry returns & near-term risks both misunderstood; AVOID
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