Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>Allocations in Biotechnology stocks have taken a severe drop among active China A-Share investors.  </li>
<li>From a high of 4% in July of 2020, average fund weights have fallen to just 1.14% and average underweights have plunged towards their lowest level on record.</li>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> has led the declines, as sentiment towards the China A-Share Biotechnology sector looks fragile.</li>
</ul>


Allocations in Biotechnology stocks have taken a severe drop among active China A-Share investors.  
From a high of 4% in July of 2020, average fund weights have fallen to just 1.14% and average underweights have plunged towards their lowest level on record.

Wuxi Biologics (2269 HK) has led the declines, as sentiment towards the China A-Share Biotechnology sector looks fragile.


HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Anhui Anke Biotechnology (Group) / Equity Bottom-Up

<ul>
<li>The recent plunge in share price of <a href="https://www.smartkarma.com/entities/anhui-anke-biotechnology-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11475:1" rel="noopener">Anhui Anke Biotechnology </a> and <a href="https://www.smartkarma.com/entities/changchun-high-new-technology-industry-group-inc-a" target="_blank" data-smartkarma-citation="entities:1371:1" rel="noopener">Changchun High &amp; New Tech (000661 CH)</a> (CCHT) was mainly due to the volume-based purchase (VBP) on recombinant human growth hormone. </li>
<li>The best result is both CCHT and Anke quit this VBP.However,if CCHT quits but Anke wins the bidding and applies low-price strategy,CCHT couldn’t keep its price system and market share. </li>
<li>Overall, growth hormone is a market with increasing competition and shrinking market size as fewer babies are born in China. So, developing more new indications would be the way out.</li>
</ul>


The recent plunge in share price of Anhui Anke Biotechnology  and Changchun High &amp; New Tech (000661 CH) (CCHT) was mainly due to the volume-based purchase (VBP) on recombinant human growth hormone. 
The best result is both CCHT and Anke quit this VBP.However,if CCHT quits but Anke wins the bidding and applies low-price strategy,CCHT couldn’t keep its price system and market share. 
Overall, growth hormone is a market with increasing competition and shrinking market size as fewer babies are born in China. So, developing more new indications would be the way out.


Anke Biotechnology (300009CH) Vs Changchun High & New Tech (000661CH)-Growth Hormone VBP and Outlook

<ul>
<li>Last week, Guangdong province issued a volume-based purchase (VBP) document, among which recombinant human growth hormone (rhGH) and blood products are included, causing widespread concern in the market.</li>
<li>The survival problem of listed biotech companies is becoming more urgent. In primary market, investment banks have started recommending CEOs of unlisted biotech companies to “reconsider” their IPO plans.</li>
<li>In terms of internationalization, companies with three characteristics are likely to become international pharmaceutical enterprises in 10 years.</li>
</ul>


Last week, Guangdong province issued a volume-based purchase (VBP) document, among which recombinant human growth hormone (rhGH) and blood products are included, causing widespread concern in the market.
The survival problem of listed biotech companies is becoming more urgent. In primary market, investment banks have started recommending CEOs of unlisted biotech companies to “reconsider” their IPO plans.
In terms of internationalization, companies with three characteristics are likely to become international pharmaceutical enterprises in 10 years.


China Healthcare Weekly (Jan.21)-Growth Hormone VBP,Biotech Survival,Internationalization Conditions

Industry viewpoints:
<ul>
<li>VBP on recombinant human growth hormone</li>
<li>The differentiation of business models between big pharma/biopharma and biotech companies</li>
<li>A view on the development prospects of innovative drugs in China </li>
</ul>
Company news:
News about the updated progress on new drugs of <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a>, <a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso Biopharma Inc (9926 HK)</a> and <a href="https://www.smartkarma.com/entities/luye-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:488:1" rel="noopener">Luye Pharma (2186 HK)</a>.
Market review:
Last week, stock price for healthcare sector in A share decreased 1.98%, while CSI 300 increased 0.04% over the same period of time.
Risk disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:

VBP on recombinant human growth hormone
The differentiation of business models between big pharma/biopharma and biotech companies
A view on the development prospects of innovative drugs in China 

Company news:
News about the updated progress on new drugs of Hansoh Pharmaceutical (3692 HK), Akeso Biopharma Inc (9926 HK) and Luye Pharma (2186 HK).
Market review:
Last week, stock price for healthcare sector in A share decreased 1.98%, while CSI 300 increased 0.04% over the same period of time.
Risk disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly (Oct15)-Growth Hormone VBP, Biotech's Business Model,Innovative Drug Outlook

Changchun High & New Tech A / Equity Bottom-Up

Recently, <a href="https://www.smartkarma.com/entities/changchun-high-new-technology-industry-group-inc-a" target="_blank" data-smartkarma-citation="entities:1371:1" rel="noopener">Changchun High &amp; New Tech A (000661 CH)</a> (CCHT) is quite “popular”, because there is news about the growth hormone abuse and the possibility of volume-based purchase (VBP) on growth hormone, resulting in the continuous correction of CCHT’s share price. As of August 13, 2021, the Company’s share price has fallen by over 31% this year. So, does the logic of this Company change? This insight mainly analyzed the business performance, the potential risks and the outlook of CCHT.

Recently, Changchun High &amp; New Tech A (000661 CH) (CCHT) is quite “popular”, because there is news about the growth hormone abuse and the possibility of volume-based purchase (VBP) on growth hormone, resulting in the continuous correction of CCHT’s share price. As of August 13, 2021, the Company’s share price has fallen by over 31% this year. So, does the logic of this Company change? This insight mainly analyzed the business performance, the potential risks and the outlook of CCHT.

Changchun High & New Tech (000661.CH) - Logic Change?

China

Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. manufactures and sells Chinese patent medicine. The Company also wholesales, retails, imports, and exports Western and Chinese pharmaceutical products and various medical apparatus.

Guangzhou Baiyunshan Pharmaceutical Holdings (874 HK)

Guangzhou Baiyunshan Pharmaceutical Holdings

Xizang Haisco Pharmaceutical Group Company Limited develops, manufactures and sells drug formulations and active pharmaceutical ingredients. The Company's main products include hepatobiliary disease medication, anti-infective drugs, parenteral nutrition drugs, invert sugar for injection, and other related products.

Xizang Haisco Pharmaceutical Group Co (002653 CH)

Shenzhen Salubris Pharmaceuticals Co., Ltd. develops, manufactures, and distributes pharmaceutical and healthcare products such as tablets, capsules, injection formulations and active pharmaceutical ingredients.

Shenzhen Salubris Pharmaceuticals A (002294 CH)

Dong-E-E-Jiao Co., Ltd. primarily manufactures and sells traditional Chinese medicine, health care products, health foods, and bio-medicine. The company also engages in gelatin products manufacturing.

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. is a pharmaceutical company. Through its subsidiaries, the Company manufactures genetic medicines, Chinese traditional medicines, diagnostic products, and medical instruments, provides technology, marketing, and advertising services, as well as invests in import and export trading.

Shanghai Fosun Pharmaceutical (Group) (600196 CH)

Humanwell Healthcare (Group) Co., Ltd specializes in the R&D and sales of pharmaceuticals, biotechnology, and chemical products, in addition to the import and export of goods and technology. The company, through its subsidiaries, also operate in real estate development and sales, industrial investment and management, and education projects.

Tianjin Zhongxin Pharmaceutical Group Corporation Limited produces and sells traditional Chinese medicine, western medicine, health products, and healthcare instruments.  The Group also manufactures gene-related biopharmaceutical products.  Tianjin Zhongxin markets its products under the Great Wall, Cypress, and Health brand names.

Tianjin Zhongxin Phrmctl Gp Cp (600329 CH)

China Resources Pharmaceutical Group Ltd. operates as a pharmaceutical company. The Company researches and develops, manufactures, and distributes pharmaceuticals. China Resources Pharmaceutical Group provides products and services involving chemicals, biologics, health products, medical appliances, and others. 

Livzon Pharmaceutical Group Inc. develops and manufactures pharmaceutical products, including chemical medicines, bio-chemical medicines, biological engineering medicines, chemical compound crude medicines, antibiotics, micro-ecological preparations, patent Chinese medicines, and diagnosis reagents etc.

Livzon Pharmaceutical Group In (000513 CH)

Sichuan Kelun Pharmaceutical Co., Ltd. manufactures pharmaceutical products. The Company's products include large infusion products, tablets, capsules, antibiotic injection, lyophilized powder for injection, and traditional Chinese medicine.

Sino Biopharmaceutical Limited, through its subsidiaries, researches, develops, produces, and sells biopharmaceutical products for the medical treatment of ophthalmia, as well as modernized Chinese medicine and chemical medicine for the treatment of hepatitis.

Perrigo Company PLC is a global healthcare supplier that develops, manufactures, and distributes OTC and generic prescription pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients and pharmaceutical and medical diagnostic products. The Company's primary markets and locations of manufacturing and logistics operations are the US, UK, Mexico, and Australia.

ROHTO PHARMACEUTICAL CO., LTD. manufactures and markets pharmaceuticals and cosmetics products.  The Company's products include eyewash, bath soaps, gastrointestinal medicine, and hand cream.  Rohto Pharmaceutical also has a license agreement with its subsidiary, Mentholatum (US) to sell their brand products.  The Company also manufactures contact lenses and health foods.

PT Kalbe Farma Tbk produces and develops pharmaceutical products for human and animal healthcare.  Through its subsidiaries, the Company also operates in the pharmaceutical, health food, and packaging industries.

SANTEN PHARMACEUTICAL CO., LTD. produces and sells ophthalmic medicine.  The Company manufactures a variety of products including eye drops and ointments. Santen Pharmaceutical also imports lenses and tools and equipment used by optometrists and produces anti-rheumatic drugs.

Glaxosmithkline Pharmaceuticals Ltd. manufactures and distributes a wide variety of pharmaceutical drugs, veterinary products and laboratory chemicals. The Company's products include "Phexin" capsules, "Betnesol" tablets and injections, "Becoride" asthma treatment, "Betnovate" ointment, "Cetzine" antihistamine, "Zucox" and "Rizap" anti-tuberculosis products.

Glaxosmithkline Pharmaceuticals (GLXO IN)

ONO PHARMACEUTICAL CO., LTD. manufactures and sells pharmaceuticals.  The Company mainly researches and develops prescription drugs.

Glenmark Pharmaceuticals Ltd., is a pharmaceutical company. The Company develops generic drugs for inflammation, metabolic disorders, and pain.

Yuhan Corporation manufactures and markets various pharmaceutical products on its own and through joint ventures with other global pharmaceutical companies. The Company also produces personal care products, dietary supplements, and veterinary medicines.

Laboratorios Farmaceuticos Rovi SA is a specialty pharmaceutical company. The Company researches, develops, manufactures, and markets small molecule and specialty biologic drugs. Rovi's services include contract manufacturing of aseptic filling and packaging of small-volume parenterals in prefilled syringes and vials and provides temperature-controlled storage facilities.

Laboratorios Farmaceuticos ROVI (ROVI SM)

Changchun High & New Technology Industry (Group) Inc. is an investment holding company.  Through its subsidiaries, the Company manufactures biopharmaceuticals and Chinese traditional medicines, constructs infrastructure facilities, manufactures electrolytic condensers, and develops and manages real estate.

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Changchun High & New Tech A (000661 CH)

China A-Shares: Biotechnology Exit

Allocations in Biotechnology stocks have taken a severe drop among active China A-Share investors. From a high of 4% in July of 2020, average fund...

Steven Holden

Anke Biotechnology (300009CH) Vs Changchun High & New Tech (000661CH)-Growth Hormone VBP and Outlook

We analyzed the impact and outlook of growth hormone VBP that led to share price plunge of Anke and CCHT. We also analyzed the bidding strategy for...

Xinyao (Criss) Wang

China Healthcare Weekly (Jan.21)-Growth Hormone VBP,Biotech Survival,Internationalization Conditions

We analyzed the impact of growth hormone/blood products VBP; the "reconsideration" of biotech IPO in primary market, survival problem of listed...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct15)-Growth Hormone VBP, Biotech's Business Model,Innovative Drug Outlook

The article analyzed the VBP on recombinant human growth hormone, the difference in business model of big pharma/biopharma and biotech, and the...

Xinyao (Criss) Wang

Changchun High & New Tech (000661.CH) - Logic Change?

The article analyzed Changchun High & New Tech in terms of its 2021/1H financial results,media exposure of growth hormone abuse, possibility of...

Xinyao (Criss) Wang

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