Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Traditional Chinese Medicine / Event-Driven

<ul>
<li>
<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> (TCM) will fall today. Perhaps a lot.</li>
<li>With two days left on the clock to secure the pre-conditions (18th October), the Offeror <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/1016/2024101600435.pdf" target="_blank" rel="noopener">said</a> "it remains uncertain" whether it can secure an extension from the investor group.</li>
<li>Such wording could be viewed as boilerplate SFC legalise. I would argue the use of "uncertain" is superfluous, unhelpful, and for investors, downright worrying. </li>
</ul>



China Traditional Chinese Medicine (570 HK) (TCM) will fall today. Perhaps a lot.
With two days left on the clock to secure the pre-conditions (18th October), the Offeror said "it remains uncertain" whether it can secure an extension from the investor group.
Such wording could be viewed as boilerplate SFC legalise. I would argue the use of "uncertain" is superfluous, unhelpful, and for investors, downright worrying. 


TCM (570 HK): "Uncertain" To Spook Shares

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance. </li>
<li>Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was "inappropriate".</li>
<li>If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.</li>
</ul>


Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance. 
Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was "inappropriate".
If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.


China TCM (570.HK) Privatization Update - The Long Stop Date to Extend or Not?

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>
<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>’s monthly update notes that the consortium has secured SAMR approval and made progress in obtaining the other regulatory approvals. </li>
<li>As expected, the precondition will not be satisfied before the 18 October long stop date. Unexpectedly, whether the consortium members will consent to the extension remains uncertain.</li>
<li>The extension will be forthcoming as the delay is procedural, there is a reputational risk from a deal break, the time investment is significant, and the warning was legally required.</li>
</ul>



China Traditional Chinese Medicine (570 HK)’s monthly update notes that the consortium has secured SAMR approval and made progress in obtaining the other regulatory approvals. 
As expected, the precondition will not be satisfied before the 18 October long stop date. Unexpectedly, whether the consortium members will consent to the extension remains uncertain.
The extension will be forthcoming as the delay is procedural, there is a reputational risk from a deal break, the time investment is significant, and the warning was legally required.


China Traditional Chinese Medicine (570 HK): Theatre of the Absurd

<ul>
<li>
<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> profit warning notes that the 1H24 net profit would decrease by 60%-70% YoY due to pricing pressure, higher impairment losses and remedial taxes. </li>
<li>The profit warning could pose a risk to the scheme, as the consortium can withdraw if there is an adverse material change in China TCM's profits or prospects.</li>
<li>If there were a danger of triggering the MAC clause, the consortium would not have made the regulatory submissions. The flip side is that the warning helps the shareholders vote. </li>
</ul>



China Traditional Chinese Medicine (570 HK) profit warning notes that the 1H24 net profit would decrease by 60%-70% YoY due to pricing pressure, higher impairment losses and remedial taxes. 
The profit warning could pose a risk to the scheme, as the consortium can withdraw if there is an adverse material change in China TCM's profits or prospects.
If there were a danger of triggering the MAC clause, the consortium would not have made the regulatory submissions. The flip side is that the warning helps the shareholders vote. 


China Traditional Chinese Medicine (570 HK): Never a Dull Moment as Profit Warning Lands

<ul>
<li>In its latest monthly update, <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> <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0916/2024091600927.pdf" target="_blank" rel="noopener">fleshes out</a> the latest on the various PRC regulatory applications. </li>
<li>Comparing the two most recent monthly updates side-by-side, apart from modifying the documentation for the MOC and NDRC process; the SAMR filing has been formally accepted, as previously flagged. </li>
<li>The upshot? These regulatory approvals will be secured. The key question is whether this can take place before the 18th October pre-condition long stop date. Or an extension is required.</li>
</ul>


In its latest monthly update, China Traditional Chinese Medicine (570 HK) fleshes out the latest on the various PRC regulatory applications. 
Comparing the two most recent monthly updates side-by-side, apart from modifying the documentation for the MOC and NDRC process; the SAMR filing has been formally accepted, as previously flagged. 
The upshot? These regulatory approvals will be secured. The key question is whether this can take place before the 18th October pre-condition long stop date. Or an extension is required.


TCM (570 HK): Inching Towards Regulatory Sign-Off

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)

TCM (570 HK): "Uncertain" To Spook Shares

The Offeror said "it remains uncertain" whether it can secure an extension from the investor group. It could be boilerplate SFC legalise. I'd argue...

David Blennerhassett

China TCM (570.HK) Privatization Update - The Long Stop Date to Extend or Not?

The announcement is “annoying” as “It remains uncertain whether such consent from the Investor Group will be obtained”.The risk is since it's not...

Xinyao (Criss) Wang