HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

China Resources Sanjiu Medical & Pharma / Equity Bottom-Up

<ul>
<li>Sanjiu’s 2023 performance was below expectations, mainly due to the VBP of TCM formula granules and the anti-corruption since 23Q3. But dividend payout ratio reached 51.96%, the highest since 2001.</li>
<li>The prescription drug business would be the core of Sanjiu’s performance changes in next two years, especially TCM injection business, which would be benefit from favorable medical insurance reimbursement policy.</li>
<li>Sanjiu’s management expects to achieve double-digit revenue growth in 2024, with net profit matching the level of revenue growth.We think 2024 performance growth would be lower than that in 2023.</li>
</ul>


Sanjiu’s 2023 performance was below expectations, mainly due to the VBP of TCM formula granules and the anti-corruption since 23Q3. But dividend payout ratio reached 51.96%, the highest since 2001.
The prescription drug business would be the core of Sanjiu’s performance changes in next two years, especially TCM injection business, which would be benefit from favorable medical insurance reimbursement policy.
Sanjiu’s management expects to achieve double-digit revenue growth in 2024, with net profit matching the level of revenue growth.We think 2024 performance growth would be lower than that in 2023.


China Resources Sanjiu (000999.CH) - 2023 Results Below Expectations; Short-Term Headwinds Remain

<ul>
<li>It is the upfront payment rather than the total or subsequent milestone payments that indicates the gold content of license-out collaborations. We analyzed our criteria.</li>
<li>Investors actually don't need to worry too much about the NRDL negotiation results, because the NRDL price of domestic innovative drugs has become relatively stable. There are basically three levels.</li>
<li>We analyzed key points about <a href="https://www.smartkarma.com/entities/china-resources-sanju-mdcl-phrm-co-ltd" target="_blank" data-smartkarma-citation="entities:6218:1" rel="noopener">China Resources Sanju. </a>Considering the impact of anti-corruption in 23Q3 and the weak performance of TCM formula granules business, 23H2 performance could be under pressure. </li>
</ul>


It is the upfront payment rather than the total or subsequent milestone payments that indicates the gold content of license-out collaborations. We analyzed our criteria.
Investors actually don't need to worry too much about the NRDL negotiation results, because the NRDL price of domestic innovative drugs has become relatively stable. There are basically three levels.
We analyzed key points about China Resources Sanju. Considering the impact of anti-corruption in 23Q3 and the weak performance of TCM formula granules business, 23H2 performance could be under pressure. 


China Healthcare Weekly (Nov.24) - Gold Content Of License-Out Deals, NRDL Pricing Levels, CR Sanjiu

<ul>
<li>For a considerable period of time, the industry has been speculating about when the large-scale VBP of TCM formula granules will officially begin. Now, here it comes. </li>
<li>Primary market and other financing except IPO in European and US biopharma industry shows a significant signal of recovery. However, IPOs remain stagnant. </li>
<li>We analyzed key points about China Resources Sanjiu. Sanjiu is expected to have better performance in 2023 than 2022, but we advise investors to allow a sufficient margin of safety.</li>
</ul>


For a considerable period of time, the industry has been speculating about when the large-scale VBP of TCM formula granules will officially begin. Now, here it comes. 
Primary market and other financing except IPO in European and US biopharma industry shows a significant signal of recovery. However, IPOs remain stagnant. 
We analyzed key points about China Resources Sanjiu. Sanjiu is expected to have better performance in 2023 than 2022, but we advise investors to allow a sufficient margin of safety.


China Healthcare Weekly (Aug.18) - TCM Formula Granules VBP, Global Financing Rebound, CR Sanjiu

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Equity Capital Markets

China Resources Beverage / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage</a> is looking to raise US$1bn in its upcoming Hong Kong IPO.</li>
<li>China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>



China Resources Beverage is looking to raise US$1bn in its upcoming Hong Kong IPO.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
In this note, we talk about the positive aspects of the deal.


China Resources Beverage Pre-IPO - The Positives - Strong Position in Its Main Market

Shenyang Xingqi Pharmaceutical / Equity Bottom-Up

<ul>
<li>A document titled "<em>Soliciting Opinions on the Implementation Plan for Supporting the Development of Innovative Drugs throughout the Whole Chain</em>" would completely change the outlook/investment logic of China's innovative drugs.</li>
<li>We predict that due to the early opening of TCM formula granules VBP in some provinces and intensifying competition, the market pattern of TCM formula granules would face reshaping.</li>
<li>After the atropine eye drops is approved by the NMPA, Xingqi’s performance growth will accelerate. Supported by favorable policies, its market value is expected to reach above RMB30 billion.</li>
</ul>


A document titled "Soliciting Opinions on the Implementation Plan for Supporting the Development of Innovative Drugs throughout the Whole Chain" would completely change the outlook/investment logic of China's innovative drugs.
We predict that due to the early opening of TCM formula granules VBP in some provinces and intensifying competition, the market pattern of TCM formula granules would face reshaping.
After the atropine eye drops is approved by the NMPA, Xingqi’s performance growth will accelerate. Supported by favorable policies, its market value is expected to reach above RMB30 billion.


China Healthcare Weekly (Mar.15)- New Policy of Innovative Drug, TCM Formula Granules, Xingqi Pharma

China

China Resources Sanjiu Medical & Pharmaceutical Co., Ltd. manufactures and markets medicines, healthcare products, and medical instruments.  Through its subsidiaries, the Company also operates in pharmaceutical trading, printing, food manufacturing, real estate development, and provides medical services.

China Resources Sanjiu Medical & Pharma (000999 CH)

China Resources Sanjiu Medical & Pharma (000999 CH)

China Resources Sanjiu (000999.CH) - 2023 Results Below Expectations; Short-Term Headwinds Remain

Sanjiu’s 2023 results was below expectations. Growth in 2024 would be lower than that in 2023. Whether the performance would turnaround depends on...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.24) - Gold Content Of License-Out Deals, NRDL Pricing Levels, CR Sanjiu

Only a direct/non-refundable upfront payment represent the true value of licensing deal.NRDL price of innovative drug becomes stable, with three...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.18) - TCM Formula Granules VBP, Global Financing Rebound, CR Sanjiu

China's first TCM formula granules VBP begins.Primary market financing in global biopharma industry rebound, but IPO remains weak.China Resources...

Xinyao (Criss) Wang

China Resources Beverage Pre-IPO - The Positives - Strong Position in Its Main Market

China Resources Beverage is looking to raise US$1bn in its upcoming Hong Kong IPO. In this ntoe, we talk about the positive aspects of the deal.

Sumeet Singh

China Healthcare Weekly (Mar.15)- New Policy of Innovative Drug, TCM Formula Granules, Xingqi Pharma

New policy of innovative drug is a big deal. We've reasons to start being optimistic.The market pattern of TCM formula granules will face...

Xinyao (Criss) Wang