In today’s briefing:
- CSI Medical Service Index Rebalance: Chunky Flows for Some Stocks
- China Healthcare Weekly (Nov.24) – Gold Content Of License-Out Deals, NRDL Pricing Levels, CR Sanjiu
- Pre-IPO Xiamen Yan Palace Bioengineering (PHIP Updates) – Some Points Worth the Attention
CSI Medical Service Index Rebalance: Chunky Flows for Some Stocks
- There are 4 changes for the CSI Medical Service Index that will be implemented at the close on 8 December.
- The constituent changes plus capping result in one-way turnover of 5.9% and in a one-way trade of CNY 1.86bn (US$261m).
- Some stocks will have passive flows from global trackers at the end of November while there will be flows from other local passive trackers at the close on 8 December.
China Healthcare Weekly (Nov.24) – Gold Content Of License-Out Deals, NRDL Pricing Levels, CR Sanjiu
- It is the upfront payment rather than the total or subsequent milestone payments that indicates the gold content of license-out collaborations. We analyzed our criteria.
- Investors actually don’t need to worry too much about the NRDL negotiation results, because the NRDL price of domestic innovative drugs has become relatively stable. There are basically three levels.
- We analyzed key points about China Resources Sanju. Considering the impact of anti-corruption in 23Q3 and the weak performance of TCM formula granules business, 23H2 performance could be under pressure.
Pre-IPO Xiamen Yan Palace Bioengineering (PHIP Updates) – Some Points Worth the Attention
- From 2020 to 2022, Yan Palace has spent RMB831 million on advertising and promotion, while total net profit of the Company during the same period was only about RMB500 million.
- OneNest is the main product with the highest gross margin, which is driven by price increase strategy.However, raising price may not work. Revenue growth in 2023H2/2024 could further slow down.
- The question is are investors really satisfied with such low-margin business for a company with strong consumption attributes? Valuation of Yan Palace should be lower than Dong E E Jiao.
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