HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

China National Medicines A / Event-Driven

<ul>
<li>The "Entrusted Management Agreement" indicates that horizontal competition issue will be completely solved within three years.This could pave the way for a future merger between Guorui and <a href="https://www.smartkarma.com/entities/shanghai-shyndec-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:1952:1" rel="noopener">Shanghai Shyndec Pharmaceutical</a>. </li>
<li>The spin-off of Guorui won’t have material impact on China National Medicines Corporation (CNMC). After restructuring, CNMC will focus on “Beijing area pharmaceutical distribution + nationwide distribution of anesthesia/psychotropic drugs”. </li>
<li>Based on strong/stable fundamentals as well as the dominant position in anesthesia and psychotropic drug business, CNMC’s future growth potential is promising. We share our views on the Company’s valuation.</li>
</ul>


The "Entrusted Management Agreement" indicates that horizontal competition issue will be completely solved within three years.This could pave the way for a future merger between Guorui and Shanghai Shyndec Pharmaceutical. 
The spin-off of Guorui won’t have material impact on China National Medicines Corporation (CNMC). After restructuring, CNMC will focus on “Beijing area pharmaceutical distribution + nationwide distribution of anesthesia/psychotropic drugs”. 
Based on strong/stable fundamentals as well as the dominant position in anesthesia and psychotropic drug business, CNMC’s future growth potential is promising. We share our views on the Company’s valuation.


China National Medicines (600511.CH) - After Restructuring, Performance Growth Is Guaranteed

China Traditional Chinese Medicine / Event-Driven

<ul>
<li>The Medical Insurance Bureau of Hubei Province issued two documents on the VBP of TCM patent medicines.Shineway’s core product Qing Kai Ling is included, which would bring pressure on performance.</li>
<li>It's time to be cautious about the outlook for GLP-1s. We may need to be mentally prepared in advance that the actual market size of GLP-1s is only US$100 billion.</li>
<li>Recent changes at the top of CNPGC have left some investors hopeful that China TCM will resolve horizontal competition as scheduled next year,but current bet on shares reversal isn't wise.</li>
</ul>


The Medical Insurance Bureau of Hubei Province issued two documents on the VBP of TCM patent medicines.Shineway’s core product Qing Kai Ling is included, which would bring pressure on performance.
It's time to be cautious about the outlook for GLP-1s. We may need to be mentally prepared in advance that the actual market size of GLP-1s is only US$100 billion.
Recent changes at the top of CNPGC have left some investors hopeful that China TCM will resolve horizontal competition as scheduled next year,but current bet on shares reversal isn't wise.


China Healthcare Weekly (Dec.8) - TCM VBP Update, GLP-1's Good Story Broke, China TCM's Sudden Rally

Chongqing Taiji Industry (Group) A / Event-Driven

<ul>
<li>There are several ways for pharmaceutical companies to commercialize drugs. We analyzed the advantages and disadvantages and ranked them accordingly. Among them, out-licensing early-stage pipelines is the worst choice.</li>
<li>After 5-6 years of commercialization, China Biotech have reached the critical point of verifying the feasibility of business models. However, some companies are falling behind. We listed them below.</li>
<li>After the failure of China TCM’s privatization, CNPGC can choose to launch another privatization after 12 months. There’re also other methods to address the horizontal competition issue with Taiji Group.</li>
</ul>


There are several ways for pharmaceutical companies to commercialize drugs. We analyzed the advantages and disadvantages and ranked them accordingly. Among them, out-licensing early-stage pipelines is the worst choice.
After 5-6 years of commercialization, China Biotech have reached the critical point of verifying the feasibility of business models. However, some companies are falling behind. We listed them below.
After the failure of China TCM’s privatization, CNPGC can choose to launch another privatization after 12 months. There’re also other methods to address the horizontal competition issue with Taiji Group.


China Healthcare Weekly (Nov.10)-Biotech Model Validation, CNPGC Need to Fulfill Commitment to Taiji

<ul>
<li>Some investors have concerns that the privatization may fail. We also noticed that Morgan Stanley raised China TCM's target price to HK$5.4. However, the privatization of China TCM seems “mandatory”.</li>
<li>At this stage, some background information is worth the attention, which will help investors better understand the logic behind this privatization and thus resolve the "confusion".</li>
<li>According to regulatory requirements, it's expected that both CNPGC and Taiji will integrate resources in pharmaceutical manufacturing and distribution sectors, so as to solve horizontal competition issue between the two.</li>
</ul>


Some investors have concerns that the privatization may fail. We also noticed that Morgan Stanley raised China TCM's target price to HK$5.4. However, the privatization of China TCM seems “mandatory”.
At this stage, some background information is worth the attention, which will help investors better understand the logic behind this privatization and thus resolve the "confusion".
According to regulatory requirements, it's expected that both CNPGC and Taiji will integrate resources in pharmaceutical manufacturing and distribution sectors, so as to solve horizontal competition issue between the two.


China TCM (570.HK) Update - Despite Doubts, This Privatization Seems “Mandatory”

Equity Bottom-Up

Shanghai Shyndec Pharmaceutical / Equity Bottom-Up

<ul>
<li>China plans to issue ultra long-term special treasury bond (about RMB1 trillion) to promote large-scale medical equipment renewal, which is expected to boost domestic demand in medical device sector. </li>
<li>Various regions (e.g. Beijing, Hainan, Guangzhou, Zhuhai) have issued separate supporting policies for innovative drug industry. It may be too early to completely lose hope of Chinese innovative drugs.</li>
<li>There is “horizontal competition” issue between Taiji and <a href="https://www.smartkarma.com/entities/shanghai-shyndec-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:1952:1" rel="noopener">Shanghai Shyndec Pharmaceutical (600420 CH)</a>, which is the underlying logic for potential spin-offs and integrations within Taiji and China TCM before 2025.</li>
</ul>


China plans to issue ultra long-term special treasury bond (about RMB1 trillion) to promote large-scale medical equipment renewal, which is expected to boost domestic demand in medical device sector. 
Various regions (e.g. Beijing, Hainan, Guangzhou, Zhuhai) have issued separate supporting policies for innovative drug industry. It may be too early to completely lose hope of Chinese innovative drugs.
There is “horizontal competition” issue between Taiji and Shanghai Shyndec Pharmaceutical (600420 CH), which is the underlying logic for potential spin-offs and integrations within Taiji and China TCM before 2025.


China Healthcare Weekly (Apr14)- Shanghai Shyndec Pharma,Innovative Drug Policy,Ultra Long-Term Bond

China

China National Medicines Corp. Ltd. wholesales and retails chemical material medicines, western medicine preparations, biochemical medicines, biological products, and Chinese traditional medicines.  Through its subsidiaries, the Company also manufactures pharmaceuticals including injections, capsules, tablets, and other related products under the CNCM brand name.

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China National Medicines A (600511 CH)

China National Medicines (600511.CH) - After Restructuring, Performance Growth Is Guaranteed

Horizontal competition issue will be solved within 3 years. The restructuring will increase the business concentration/scale/competitiveness of...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.8) - TCM VBP Update, GLP-1's Good Story Broke, China TCM's Sudden Rally

Hubei's TCM patent medicine VBP will impact Shineway's performance. Caution needed on GLP-1 market outlook. There's no evidence to support CNPGC’s...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.10)-Biotech Model Validation, CNPGC Need to Fulfill Commitment to Taiji

Out-licensing early-stage pipelines is the worst option. China Biotech at a critical point in verifying business models. CNPGC has other methods to...

Xinyao (Criss) Wang

China TCM (570.HK) Update - Despite Doubts, This Privatization Seems “Mandatory”

Some investors have concerns that the privatization may fail, but China TCM's privatization seems "mandatory", which will lead to spin-off...

Xinyao (Criss) Wang

China Healthcare Weekly (Apr14)- Shanghai Shyndec Pharma,Innovative Drug Policy,Ultra Long-Term Bond

China will issue special treasury bonds for healthcare.New policy boosts hope for innovative drugs.Horizontal competition in Taiji and Shanghai...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China National Medicines (600511.CH) - After Restructuring, Performance Growth Is Guaranteed

Horizontal competition issue will be solved within 3 years. The restructuring will increase the business concentration/scale/competitiveness of...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.8) - TCM VBP Update, GLP-1's Good Story Broke, China TCM's Sudden Rally

​Hubei's TCM patent medicine VBP will impact Shineway's performance. Caution needed on GLP-1 market outlook. There's no evidence to support CNPGC’s...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.10)-Biotech Model Validation, CNPGC Need to Fulfill Commitment to Taiji

Out-licensing early-stage pipelines is the worst option. China Biotech at a critical point in verifying business models. CNPGC has other methods to...

Xinyao (Criss) Wang

China TCM (570.HK) Update - Despite Doubts, This Privatization Seems “Mandatory”

Some investors have concerns that the privatization may fail, but ​China TCM's privatization seems "mandatory", which will lead to spin-off...

Xinyao (Criss) Wang

China Healthcare Weekly (Apr14)- Shanghai Shyndec Pharma,Innovative Drug Policy,Ultra Long-Term Bond

​China will issue special treasury bonds for healthcare.New policy boosts hope for innovative drugs.Horizontal competition in Taiji and Shanghai...

Xinyao (Criss) Wang

Hubei's TCM patent medicine VBP will impact Shineway's performance. Caution needed on GLP-1 market outlook. There's no evidence to support CNPGC’s...

Some investors have concerns that the privatization may fail, but China TCM's privatization seems "mandatory", which will lead to spin-off...

China will issue special treasury bonds for healthcare.New policy boosts hope for innovative drugs.Horizontal competition in Taiji and Shanghai...