HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

China Traditional Chinese Medicine / Equity Bottom-Up

<ul>
<li>TCM finished drugs and TCM decoction pieces businesses could be the second and third growth curve of China TCM when the concentrated TCM granules business is facing VBP headwinds.</li>
<li>2024 would be the performance low point. Due to 2024 low base, we would see positive growth in 2025.Performance recovery is expected in next three years based on our forecast.</li>
<li>Annual profit of RMB1 billion is achievable. If based on 10x P/E, market value is RMB10 billion.We think if valuations fall below RMB10 billion, investors can consider buying on dips.</li>
</ul>


TCM finished drugs and TCM decoction pieces businesses could be the second and third growth curve of China TCM when the concentrated TCM granules business is facing VBP headwinds.
2024 would be the performance low point. Due to 2024 low base, we would see positive growth in 2025.Performance recovery is expected in next three years based on our forecast.
Annual profit of RMB1 billion is achievable. If based on 10x P/E, market value is RMB10 billion.We think if valuations fall below RMB10 billion, investors can consider buying on dips.


China TCM (570.HK) - Updates on Performance Forecast and Valuation Outlook Based on 2024 Results

<ul>
<li>The sharp performance decline of China TCM in 2024 is actually in line with our expectation. The current valuation has not yet reached its lowest point. </li>
<li>China TCM can still achieve an average annual profit of RMB1 billion in the future. Together with the new management, we expect the Company to come out of the trough.</li>
<li>Instead of betting on privatization again, it's better to focus more on whether China TCM's fundamentals would improve, which is the key factor that can support a sustainable valuation rebound.</li>
</ul>


The sharp performance decline of China TCM in 2024 is actually in line with our expectation. The current valuation has not yet reached its lowest point. 
China TCM can still achieve an average annual profit of RMB1 billion in the future. Together with the new management, we expect the Company to come out of the trough.
Instead of betting on privatization again, it's better to focus more on whether China TCM's fundamentals would improve, which is the key factor that can support a sustainable valuation rebound.


China TCM (570.HK) - About the Profit Warning and the Valuation Outlook

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Traditional Chinese Medicine / Event-Driven

<ul>
<li>
<strong><a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a></strong>  (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.</li>
<li>As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out <em>why</em> this got stonewalled?</li>
<li>This deal lapse changes the Hong Kong M&amp;A landscape; if you can't rely on SOE transactions to get up, what next?  The immediate question now is downside support on Monday.  </li>
</ul>



China Traditional Chinese Medicine (570 HK)  (TCM) has been a frustrating deal, for a deal that shouldn’t be frustrating.
As feared from its 16th October monthly update, the inability to secure investor group consents appears to have torpedoed the transaction. Will we eventually find out why this got stonewalled?
This deal lapse changes the Hong Kong M&amp;A landscape; if you can't rely on SOE transactions to get up, what next?  The immediate question now is downside support on Monday.  


TCM (570 HK): Likely Rush for The Exits As Deal Busts

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>Shockingly, the Sinopharm-led consortium’s offer for <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">China Traditional Chinese Medicine (570 HK)</a> has lapsed as the precondition long stop date has not been extended.</li>
<li>This deal break caught many, including me, off guard. There are lessons to be learnt and questions to be asked. </li>
<li>Shareholders will have a bruising Monday. Our analysis suggests a deal break price of around HK$3.44, a 10% downside to the last close.</li>
</ul>


Shockingly, the Sinopharm-led consortium’s offer for China Traditional Chinese Medicine (570 HK) has lapsed as the precondition long stop date has not been extended.
This deal break caught many, including me, off guard. There are lessons to be learnt and questions to be asked. 
Shareholders will have a bruising Monday. Our analysis suggests a deal break price of around HK$3.44, a 10% downside to the last close.


China Traditional Chinese Medicine (570 HK): Disaster as Offer Lapses, Potential Deal Break Price

<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

Hong Kong

China Traditional Chinese Medicine Co. Limited, through its subsidiaries, manufactures and sells medicine and pharmaceutical products in China.

China Traditional Chinese Medicine (570 HK)

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China Traditional Chinese Medicine (570 HK)

China TCM (570.HK) - Updates on Performance Forecast and Valuation Outlook Based on 2024 Results

CNPGC increased its stake in China TCM at an average price of HK$1.86/share in light of its confidence in its outlook, which helps stabilize share...

Xinyao (Criss) Wang

China TCM (570.HK) - About the Profit Warning and the Valuation Outlook

China TCM's performance decline in 2024 aligns with expectations, but there is hope for future profit growth based on new management. Focus on...

Xinyao (Criss) Wang

TCM (570 HK): Likely Rush for The Exits As Deal Busts

How does a ~34% decline (in the morning session) stack up with past deal breaks in Hong Kong? It's not a clean comparative analysis, as past...

David Blennerhassett