HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Hygeia Healthcare Group / Equity Capital Markets

<ul>
<li>The government has changed its tone and started to encourage social capital to run hospitals, indicating that the previous concerns about the policy risk on Hygeia has been relieved.</li>
<li>At this stage, Hygeia has more investment value, greater expansion space and higher market demand than <a href="https://www.smartkarma.com/entities/aier-eye-hospital-group-co-ltd" target="_blank" data-smartkarma-citation="entities:1103:1" rel="noopener">Aier Eye Hospital</a>. Meanwhile, the Company performs better in trans provincial expansion than Topchoice. </li>
<li>Due to large investment/“heavy asset” model, Hygeia would continue to face capital pressure. Its expansion pace may not be as fast as expected if it hopes to control expansion quality. </li>
</ul>


The government has changed its tone and started to encourage social capital to run hospitals, indicating that the previous concerns about the policy risk on Hygeia has been relieved.
At this stage, Hygeia has more investment value, greater expansion space and higher market demand than Aier Eye Hospital. Meanwhile, the Company performs better in trans provincial expansion than Topchoice. 
Due to large investment/“heavy asset” model, Hygeia would continue to face capital pressure. Its expansion pace may not be as fast as expected if it hopes to control expansion quality. 


Hygeia Healthcare Placement (6078.HK)- The Prospect Is More Certain After the Policy Risk Is Removed

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 Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 25th.</li>
<li>We estimate the weekly inflows to be US$1,113.7 million, led by financials, consumer staples, utilities sectors, and offset by health care, industrials.</li>
<li>We highlight flows for Luzhou Lao Jiao, Yunnan New Energy Material, CATL.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 25th.
We estimate the weekly inflows to be US$1,113.7 million, led by financials, consumer staples, utilities sectors, and offset by health care, industrials.
We highlight flows for Luzhou Lao Jiao, Yunnan New Energy Material, CATL.


Northbound Flows (Nov 25th): Luzhou Lao Jiao, Yunnan New Energy Material, CATL

Thematic (Sector/Industry)

<ul>
<li>The recent rally in healthcare is mainly driven by medical device sector. But investors are advised to exit in time before the truth is revealed.</li>
<li>For pharmaceutical sector, it may not be as lucky as medical device sector.Even if it has followed the positive momentum of medical device sector, stock price would diverge after that.</li>
<li>We won't take any chances on CXO due to geographical conflicts and overseas policy risks, with "no reversal signal". We updated our top picks in various sectors. </li>
</ul>


The recent rally in healthcare is mainly driven by medical device sector. But investors are advised to exit in time before the truth is revealed.
For pharmaceutical sector, it may not be as lucky as medical device sector.Even if it has followed the positive momentum of medical device sector, stock price would diverge after that.
We won't take any chances on CXO due to geographical conflicts and overseas policy risks, with "no reversal signal". We updated our top picks in various sectors. 


About the Recent Rebound in China Healthcare and the Future Direction (Updated Top Picks)

<ul>
<li>Ukraine "miraculously" turned the tide of war, making Russia to consider whether they’re facing Ukraine or the Pentagon/NATO? There could be "entry of new members". The balance could tilt again.</li>
<li>The Russia-Ukraine war is also a cruel world economic war. We analyzed the impact on healthcare industry (both opportunities and challenges).</li>
<li>Overall, the first episode of the Russia-Ukraine war has ended and entered a serious new phase. The game between the US and Russia would last for a long time.</li>
</ul>


Ukraine "miraculously" turned the tide of war, making Russia to consider whether they’re facing Ukraine or the Pentagon/NATO? There could be "entry of new members". The balance could tilt again.
The Russia-Ukraine war is also a cruel world economic war. We analyzed the impact on healthcare industry (both opportunities and challenges).
Overall, the first episode of the Russia-Ukraine war has ended and entered a serious new phase. The game between the US and Russia would last for a long time.


Russia-Ukraine War Episode 2 - The Balance Could Tilt Again and Its Impact on Healthcare Industry

<ul>
<li>It is estimated that a large number of biotech companies will be liquidated or willing to be acquired at low prices starting from the second half of 2023.</li>
<li>If strictly speaking, the so-called import substitution is not really good logic, but investors need to know "when to participate in this story" and "when to exit".</li>
<li>Economic downturn would lead to consumption downgrade. We suggest that investors temporarily avoid medical companies with consumption attributes, since we have concerns on their performance.</li>
</ul>


It is estimated that a large number of biotech companies will be liquidated or willing to be acquired at low prices starting from the second half of 2023.
If strictly speaking, the so-called import substitution is not really good logic, but investors need to know "when to participate in this story" and "when to exit".
Economic downturn would lead to consumption downgrade. We suggest that investors temporarily avoid medical companies with consumption attributes, since we have concerns on their performance.


China Healthcare Weekly (Oct.7)- Biotech Accept Reality, Import Substitution Logic, Consumer Medical

China

Aier Eye Hospital Group Co., Ltd provides ophthalmological services.  The Company's services include ophthalmological diagnosis and treatments.

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Aier Eye Hospital Group (300015 CH)

Hygeia Healthcare Placement (6078.HK)- The Prospect Is More Certain After the Policy Risk Is Removed

The government has changed its tone to encourage social capital to run hospitals. So, policy risk is removed. Hygeia has more expansion space...

Xinyao (Criss) Wang

Northbound Flows (Nov 25th): Luzhou Lao Jiao, Yunnan New Energy Material, CATL

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Luzhou Lao Jiao, Yunnan New Energy Material, CATL.

Ke Yan, CFA, FRM

About the Recent Rebound in China Healthcare and the Future Direction (Updated Top Picks)

There's catalyst in medical device sector, leading to the recent rebound, but investors should exit in time before the truth is revealed. After the...

Xinyao (Criss) Wang

Russia-Ukraine War Episode 2 - The Balance Could Tilt Again and Its Impact on Healthcare Industry

The first episode of Russia-Ukraine war has ended and entered a new phase.As it becomes "small world war",the balance may tilt again. It's also a...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.7)- Biotech Accept Reality, Import Substitution Logic, Consumer Medical

Although unwilling, biotech will face the harshest truth in 2023; Import substitution isn't good logic. Investors should know "when to join" &...

Xinyao (Criss) Wang

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