"Donkey Skin" Rhymes With "Shark Fin" Update

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

China Resources Pharmaceutical / Equity Bottom-Up

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading product is its E-Jiao series of OTC products that generated HKD5 billion of revenue (only 3% of revenue, but probably around 10% of profits). We noted in our prior Insights on the company that one emerging risk to the story is the increasing shortage of donkeys globally and the potential impact on public opinion.  The South China Morning Post is running an in-depth story on E-Jiao products and their impact on the global donkey herd.  Public outcry over the treatment of donkeys could lead to boycotts, as seen with shark fin soup.

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading product is its E-Jiao series of OTC products that generated HKD5 billion of revenue (only 3% of revenue, but probably around 10% of profits). We noted in our prior Insights on the company that one emerging risk to the story is the increasing shortage of donkeys globally and the potential impact on public opinion.  The South China Morning Post is running an in-depth story on E-Jiao products and their impact on the global donkey herd.  Public outcry over the treatment of donkeys could lead to boycotts, as seen with shark fin soup. 