HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

China Resources Pharmaceutical / Event-Driven

<ul>
<li>The 10th national VBP officially begins. Enterprises involved in this VBP include <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (2196 HK)</a><a href="https://www.smartkarma.com/entities/shanghai-pharmaceuticals-holding" target="_blank" data-smartkarma-citation="entities:228:1" rel="noopener">Shanghai Pharmaceuticals (2607 HK), </a><a href="https://www.smartkarma.com/entities/sichuan-kelun-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:3625:1" rel="noopener">Sichuan Kelun Pharmaceutical (002422 CH), </a><a href="https://www.smartkarma.com/entities/cspc-pharmaceutical-group-ltd" target="_blank" data-smartkarma-citation="entities:229:1" rel="noopener">CSPC (1093 HK)</a>, etc..</li>
<li>We analyzed Chinese Biotech companies’ P/S range based on different product revenue growth. Due to low profitability, there is “a valuation discount” if they are included in global valuation system.</li>
<li>KPC has agreed to acquire 51% interest in CR Shenghuo from CR Sanjiu. Due to good performance, we are full of expectations for the future acquisition/integration within China Resources.</li>
</ul>


The 10th national VBP officially begins. Enterprises involved in this VBP include Shanghai Fosun Pharmaceutical (2196 HK)Shanghai Pharmaceuticals (2607 HK), Sichuan Kelun Pharmaceutical (002422 CH), CSPC (1093 HK), etc..
We analyzed Chinese Biotech companies’ P/S range based on different product revenue growth. Due to low profitability, there is “a valuation discount” if they are included in global valuation system.
KPC has agreed to acquire 51% interest in CR Shenghuo from CR Sanjiu. Due to good performance, we are full of expectations for the future acquisition/integration within China Resources.


China Healthcare Weekly (Nov.24) - 10th VBP, Biotech Valuation Logic, China Resources Reorganization

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

China Resources Pharmaceutical / Index Rebalance

<ul>
<li>In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2024.</li>
<li>The index changes for the September 2024 index rebal will be announced on 16th August 2024.</li>
<li>The HSI selection process is highly subjective and does not follow clear-cut rules. This insight is simply an attempt to provide readers with an overall understanding of the possible scenarios.</li>
</ul>


In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2024.
The index changes for the September 2024 index rebal will be announced on 16th August 2024.
The HSI selection process is highly subjective and does not follow clear-cut rules. This insight is simply an attempt to provide readers with an overall understanding of the possible scenarios.


Quiddity Leaderboard for Hang Seng Index Sep 24: New Economy? Clean Energy? or Shipping?

Equity Bottom-Up

China Resources Pharmaceutical / Equity Bottom-Up

<ul>
<li>The NHSA issued a Notice on “improving the quality and expanding the scope of VBP”. The trend of full coverage of VBP of conventional drugs/consumables is determined.TCM is under pressure.</li>
<li>We analyzed the potential demand growth rate of the glove industry, which is already better than most cyclical stocks. Therefore, we see no need to remain pessimistic about this industry.</li>
<li>Holding platform companies have valuation discounts.HK$50-60 billion is reasonable market value for China Resources Pharmaceutical.Better to go long when share price is below HK$5 and then hold to receive dividends.</li>
</ul>


The NHSA issued a Notice on “improving the quality and expanding the scope of VBP”. The trend of full coverage of VBP of conventional drugs/consumables is determined.TCM is under pressure.
We analyzed the potential demand growth rate of the glove industry, which is already better than most cyclical stocks. Therefore, we see no need to remain pessimistic about this industry.
Holding platform companies have valuation discounts.HK$50-60 billion is reasonable market value for China Resources Pharmaceutical.Better to go long when share price is below HK$5 and then hold to receive dividends.


China Healthcare Weekly (May.26)-VBP Scope Expands, Optimistic About Glove Industry, China Resources

Equity Capital Markets

<ul>
<li>The 11th national VBP is expected to start in 2025H1. Companies such as Kelun, CSPC, Qilu Pharmaceuticals, Fosun Pharma, <a href="https://www.smartkarma.com/entities/china-resources-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:22928:1" rel="noopener">China Resources Pharmaceutical</a>, etc. are expected to be affected the most.</li>
<li>It is estimated that the entire market of PD-1/L1 x VEGF BsAb is approximately US$20-30 billion. AK112 is expected to seize about 40%-50% of the market or US$8-15 billion.</li>
<li>MIXUE's IPO debut was stellar. Conservative investors can considering taking profits as risk of share price corrections has increased. Radical investors can choose to bet on valuation exceeding Nongfu Spring.</li>
</ul>


The 11th national VBP is expected to start in 2025H1. Companies such as Kelun, CSPC, Qilu Pharmaceuticals, Fosun Pharma, China Resources Pharmaceutical, etc. are expected to be affected the most.
It is estimated that the entire market of PD-1/L1 x VEGF BsAb is approximately US$20-30 billion. AK112 is expected to seize about 40%-50% of the market or US$8-15 billion.
MIXUE's IPO debut was stellar. Conservative investors can considering taking profits as risk of share price corrections has increased. Radical investors can choose to bet on valuation exceeding Nongfu Spring.


China Healthcare Weekly (Mar.9) - 11th VBP, PD-1/VEGF BsAb Outlook, MIXUE's Stunning IPO Debut

<ul>
<li>The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.</li>
<li>In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in March 2025.</li>
<li>The index changes for the March 2025 index rebal event will be announced after market close on 21st February 2025.</li>
</ul>


The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in March 2025.
The index changes for the March 2025 index rebal event will be announced after market close on 21st February 2025.


Quiddity Leaderboard Hang Seng Index: Healthcare Is Still the Most Under-Represented Industry Group

China

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. 

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China Resources Pharmaceutical (3320 HK)

China Healthcare Weekly (Nov.24) - 10th VBP, Biotech Valuation Logic, China Resources Reorganization

The 10th national VBP kicks off. Chinese Biotech face valuation discount when included in global valuation system. China Resources is undergoing...

Xinyao (Criss) Wang

Quiddity Leaderboard for Hang Seng Index Sep 24: New Economy? Clean Energy? or Shipping?

The index changes for the Hang Seng Index for September 2024 will be announced after market close on Friday 16th August 2024. In this insight, I...

Janaghan Jeyakumar, CFA

China Healthcare Weekly (May.26)-VBP Scope Expands, Optimistic About Glove Industry, China Resources

Due to VBP scope expansion, TCM will face more pressure.Time to be optimistic about glove industry, which is better than expected.China Resources...

Xinyao (Criss) Wang

China Healthcare Weekly (Mar.9) - 11th VBP, PD-1/VEGF BsAb Outlook, MIXUE's Stunning IPO Debut

The 11th national VBP in 2025H1 will impact big pharma companies. AK112 would seize 40%-50% of the PD-1/VEGF BsAb market. MIXUE's IPO debut was...

Xinyao (Criss) Wang

Quiddity Leaderboard Hang Seng Index: Healthcare Is Still the Most Under-Represented Industry Group

The Hang Seng Index February 2025 index review results will be confirmed on Friday this week (21st). This would be a good time to revisit this...

Janaghan Jeyakumar, CFA

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52-week Range

Market Cap (USDm)

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China Healthcare Weekly (Nov.24) - 10th VBP, Biotech Valuation Logic, China Resources Reorganization

The 10th national VBP kicks off. Chinese Biotech face valuation discount when included in global valuation system. China Resources is undergoing...

Xinyao (Criss) Wang

Quiddity Leaderboard for Hang Seng Index Sep 24: New Economy? Clean Energy? or Shipping?

The index changes for the Hang Seng Index for September 2024 will be announced after market close on Friday 16th August 2024. In this insight, I...

Janaghan Jeyakumar, CFA

China Healthcare Weekly (May.26)-VBP Scope Expands, Optimistic About Glove Industry, China Resources

Due to VBP scope expansion, TCM will face more pressure.Time to be optimistic about glove industry, which is better than expected.China Resources...

Xinyao (Criss) Wang

China Healthcare Weekly (Mar.9) - 11th VBP, PD-1/VEGF BsAb Outlook, MIXUE's Stunning IPO Debut

​The 11th national VBP in 2025H1 will impact big pharma companies. AK112 would seize 40%-50% of the PD-1/VEGF BsAb market. MIXUE's IPO debut was...

Xinyao (Criss) Wang

Quiddity Leaderboard Hang Seng Index: Healthcare Is Still the Most Under-Represented Industry Group

The Hang Seng Index February 2025 index review results will be confirmed on Friday this week (21st). This would be a good time to revisit this...

Janaghan Jeyakumar, CFA

The 11th national VBP in 2025H1 will impact big pharma companies. AK112 would seize 40%-50% of the PD-1/VEGF BsAb market. MIXUE's IPO debut was...