HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

Industry viewpoints:
<ul>
<li>The State Council released the supporting measures for the three-child policy so as to further optimize the family planning policy.</li>
<li>With the implementation of favorable policies on promoting the high-quality development of public hospitals, we are optimistic about the long-term development of the medical service and medical device industry.</li>
<li>The National Health Care Security Administration recently issued a new DIP regulation, which will guide the pilot areas to further standardize the implementation of payment based on disease classification.</li>
</ul>
Company news: 
News about the updated progress on drugs of <a href="https://www.smartkarma.com/entities/sinocelltech-group-ltd" target="_blank" data-smartkarma-citation="entities:33456:1" rel="noopener">Sinocelltech Group (688520 CH)</a>, <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a>, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a> and <a href="https://www.smartkarma.com/entities/china-medical-system-holdings" target="_blank" data-smartkarma-citation="entities:18736:1" rel="noopener">China Medical System (867 HK)</a>.
Market review:
Last week, stock price for healthcare sector in A share decreased 2.42%, while CSI 300 decreased 0.11% over the same period of time.
Risk disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:

The State Council released the supporting measures for the three-child policy so as to further optimize the family planning policy.
With the implementation of favorable policies on promoting the high-quality development of public hospitals, we are optimistic about the long-term development of the medical service and medical device industry.
The National Health Care Security Administration recently issued a new DIP regulation, which will guide the pilot areas to further standardize the implementation of payment based on disease classification.

Company news: 
News about the updated progress on drugs of Sinocelltech Group (688520 CH), Everest Medicines (1952 HK), Antengene (6996 HK) and China Medical System (867 HK).
Market review:
Last week, stock price for healthcare sector in A share decreased 2.42%, while CSI 300 decreased 0.11% over the same period of time.
Risk disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

Q2 2020’s selection delivered an average return increase of 54% v’s the MSCI Asia Pacific Index 37.4% over the same period. The GARP-based screen uses a combination of growth and value metrics to identify shares where brokers are forecasting high earnings growth, but which are currently valued at a price that is low relative to their forecast outlook. Whilst Central Banks are providing additional liquidity favouring growth names, our value-based screen is key to delivering positive gains as tapering begins. Q2 2021's screen provides 16 key suggestions.  What makes the current selection interesting is the bias towards Taiwan and India on a country basis and Industrials and Healthcare on a sector basis. Also of particular note, Singapore presents one name on this screen.

Q2 2020’s selection delivered an average return increase of 54% v’s the MSCI Asia Pacific Index 37.4% over the same period. The GARP-based screen uses a combination of growth and value metrics to identify shares where brokers are forecasting high earnings growth, but which are currently valued at a price that is low relative to their forecast outlook. Whilst Central Banks are providing additional liquidity favouring growth names, our value-based screen is key to delivering positive gains as tapering begins. Q2 2021's screen provides 16 key suggestions.  What makes the current selection interesting is the bias towards Taiwan and India on a country basis and Industrials and Healthcare on a sector basis. Also of particular note, Singapore presents one name on this screen.

Screening the Silk Road: Q2-2021 All Cap GARP (Zulu Warrior Screening)

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/china-medical-system-holdings" target="_blank" data-smartkarma-citation="entities:18736:1" rel="noopener">China Medical System (867 HK)</a>(CMS) recently performed very well. Last week, its stock priced increased about 23%, which was mainly driven by the positive outlook of its business. Meanwhile, the Company announced the annual results for the year ended 31 December 2020. According to the financial reports, turnover was up 14.4% to RMB6,946.0 million (2019: RMB6,073.6 million), which was mainly due to the overall increase in sales of various products. Gross profit was up 12.9% to RMB5,134.2 million (2019: RMB4,546.3 million); Profit for the year was up 30.7% to RMB2,555.7 million (2019: RMB1,955.7 million), which was above market expectation. However, besides the growth, there are some concerns on its star product PLENITY, an orally-administered weight management product.

China Medical System (867 HK)(CMS) recently performed very well. Last week, its stock priced increased about 23%, which was mainly driven by the positive outlook of its business. Meanwhile, the Company announced the annual results for the year ended 31 December 2020. According to the financial reports, turnover was up 14.4% to RMB6,946.0 million (2019: RMB6,073.6 million), which was mainly due to the overall increase in sales of various products. Gross profit was up 12.9% to RMB5,134.2 million (2019: RMB4,546.3 million); Profit for the year was up 30.7% to RMB2,555.7 million (2019: RMB1,955.7 million), which was above market expectation. However, besides the growth, there are some concerns on its star product PLENITY, an orally-administered weight management product.

China Medical System (867.HK) - The Concerns Are On "PLENITY"

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Zydus Lifesciences Ltd / Equity Bottom-Up

Cadila Healthcare reported its Q3FY21 earnings. Below, we note some of the key highlights from the earnings conference call.
Most promising aspect for Cadila is its focus on innovation that has been yielding good results with potential for launching a blockbuster drug in US. It has 4 NCEs (New Chemical Entities) in clinical development and 10+ NCEs/NBEs in pipeline. In particular, its NCE candidate, Saroglitazar Magnesium, for PBC disease has a USD 10bn+ global opportunity and Cadila has potential to be among the first wave of launches in US (represents 94%+ of the opportunity) with expected commercialization by FY23. Saroglitazar has potential to get approval for NASH disease in US by FY25. NASH has a much bigger opportunity with projected global market size of USD 27bn+. Another promising drug candidate is Desidustat where apart from large potential in treatment of anemia in CKD patients in India and China, there is orphan drug potential for niche chemotherapy-induced anemia condition in US.

Cadila Healthcare reported its Q3FY21 earnings. Below, we note some of the key highlights from the earnings conference call.
Most promising aspect for Cadila is its focus on innovation that has been yielding good results with potential for launching a blockbuster drug in US. It has 4 NCEs (New Chemical Entities) in clinical development and 10+ NCEs/NBEs in pipeline. In particular, its NCE candidate, Saroglitazar Magnesium, for PBC disease has a USD 10bn+ global opportunity and Cadila has potential to be among the first wave of launches in US (represents 94%+ of the opportunity) with expected commercialization by FY23. Saroglitazar has potential to get approval for NASH disease in US by FY25. NASH has a much bigger opportunity with projected global market size of USD 27bn+. Another promising drug candidate is Desidustat where apart from large potential in treatment of anemia in CKD patients in India and China, there is orphan drug potential for niche chemotherapy-induced anemia condition in US.

Cadila Healthcare: Q3FY21 Earnings - Innovation in Focus

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

Sciclone Pharmaceuticals / Equity Capital Markets

SciClone Pharmaceuticals is a China-based company that has filed to list on the HKEX. The company primarily sells products in-licensed from third parties and provides promotion services. We expect concerns about Volume-Based Procurement for Zadaxin to weigh on the valuation until new products can offset potential pressures. As a result, we would pass on the deal.

SciClone Pharmaceuticals is a China-based company that has filed to list on the HKEX. The company primarily sells products in-licensed from third parties and provides promotion services. We expect concerns about Volume-Based Procurement for Zadaxin to weigh on the valuation until new products can offset potential pressures. As a result, we would pass on the deal. 

SciClone Pharmaceuticals: Caged by the Elephant

China

China Medical System Holdings Limited manufactures pharmaceutical and medical products primarily in China.

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China Medical System (867 HK)

China Healthcare Weekly (July.23)

The article analyzed the supporting measures for the three-child policy, the mainstay position of public hospitals, the new DIP regulation...

Xinyao (Criss) Wang

Screening the Silk Road: Q2-2021 All Cap GARP (Zulu Warrior Screening)

GARP selection, held for 12 mths for good reason. The list delivered an average return of 54% v’s the MSCI Asia Pac Index 37.4% over the same...

David Lepper