HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

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>TCM formula granules VBP would cause some disturbance to related enterprises’ performance, but the substitution of TCM formula granules for TCM decoction pieces is a trend, indicating long-term optimistic growth.</li>
<li>Keymed’s CM310 would probably miss the NRDL negotiation this year, which will put the Company in passive situation. Based on competitive landscape, we are worried about the performance of Keymed.</li>
<li>Unsatisfactory performance of Taiji’s shares is related to concerns on China TCM’s privatization/24H1 results.However, even without the integration with China TCM, Taiji's market value should be more than RMB20 billion.</li>
</ul>


TCM formula granules VBP would cause some disturbance to related enterprises’ performance, but the substitution of TCM formula granules for TCM decoction pieces is a trend, indicating long-term optimistic growth.
Keymed’s CM310 would probably miss the NRDL negotiation this year, which will put the Company in passive situation. Based on competitive landscape, we are worried about the performance of Keymed.
Unsatisfactory performance of Taiji’s shares is related to concerns on China TCM’s privatization/24H1 results.However, even without the integration with China TCM, Taiji's market value should be more than RMB20 billion.


China Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed's Trouble

<ul>
<li>In the past few years, a big problem of Taiji is weak performance/low valuation. The main purpose of mixed-ownership reform with CNPGC is to improve operational efficiency and enhance profitability.</li>
<li>CNPGC made a clear commitment to solve the horizontal competition issue. So, after the privatization of China TCM is completed, it's worth noting whether it will be merged into Taiji.</li>
<li>2024 is expected to see Taiji launch new M&amp;A deals, which would bring a qualitative leap for Taiji. Market value of Taiji is expected to at least double. </li>
</ul>


In the past few years, a big problem of Taiji is weak performance/low valuation. The main purpose of mixed-ownership reform with CNPGC is to improve operational efficiency and enhance profitability.
CNPGC made a clear commitment to solve the horizontal competition issue. So, after the privatization of China TCM is completed, it's worth noting whether it will be merged into Taiji.
2024 is expected to see Taiji launch new M&amp;A deals, which would bring a qualitative leap for Taiji. Market value of Taiji is expected to at least double. 


Will China TCM (570.HK) Be Incorporated into Taiji Group (600129.CH)? –If Yes, Valuation Will Double

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.

China Traditional Chinese Medicine / Event-Driven

<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>We once again heard privatization rumor of China TCM, but China TCM denied it at this stage. We still recommend investors to remain vigilant until receive definite official announcement.</li>
<li>One important background of privatization is the integration of SOE carried out in recent years. We do not rule out the possibility that Taiji Group would drive this privatization.</li>
<li>It may not be an optimal time for the proposal of privatization by major shareholders. Other shareholders may not want to give up high-quality stocks, which makes privatization challenging.</li>
</ul>


We once again heard privatization rumor of China TCM, but China TCM denied it at this stage. We still recommend investors to remain vigilant until receive definite official announcement.
One important background of privatization is the integration of SOE carried out in recent years. We do not rule out the possibility that Taiji Group would drive this privatization.
It may not be an optimal time for the proposal of privatization by major shareholders. Other shareholders may not want to give up high-quality stocks, which makes privatization challenging.


China Traditional Chinese Medicine (570.HK) - Will This Privatization Rumor Come True ?

China

Chongqing Taiji Industry (Group) Co., Ltd. manufactures and markets medicines, healthcare products, medical packing products, and medical instruments.  The Company also imports and exports Chinese medicine materials and medical packing materials.

Chongqing Taiji Industry (Group) A (600129 CH)

Price Gauge
52-week Range	0.00 - 0.00
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Chongqing Taiji Industry (Group) A (600129 CH)

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 Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed's Trouble

Substitution of TCM formula granules for decoction pieces is a trend despite the VBP. Keymed will face difficulties without NRDL negotiation....

Xinyao (Criss) Wang

Will China TCM (570.HK) Be Incorporated into Taiji Group (600129.CH)? –If Yes, Valuation Will Double

Under the leadership of CNPGC, Taiji has entered the right track, with significant performance growth.If China TCM is ultimately merged into Taiji...

Xinyao (Criss) Wang

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

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...

Arun George

China Traditional Chinese Medicine (570.HK) - Will This Privatization Rumor Come True ?

We once again heard privatization rumor of China TCM.Considering the integration trend of SOE, privatization is always in the plan of CNPGC, but we...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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 Healthcare Weekly (Aug.4)- Taiji Group & China TCM, TCM Formula Granules VBP, Keymed's Trouble

​Substitution of TCM formula granules for decoction pieces is a trend despite the VBP. Keymed will face difficulties without NRDL negotiation....

Xinyao (Criss) Wang

Will China TCM (570.HK) Be Incorporated into Taiji Group (600129.CH)? –If Yes, Valuation Will Double

Under the leadership of CNPGC, Taiji has entered the right track, with significant performance growth.If China TCM is ultimately merged into Taiji...

Xinyao (Criss) Wang

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

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...

Arun George

China Traditional Chinese Medicine (570.HK) - Will This Privatization Rumor Come True ?

We once again heard privatization rumor of China TCM.Considering the integration trend of SOE, privatization is always in the plan of CNPGC, but we...

Xinyao (Criss) Wang

Substitution of TCM formula granules for decoction pieces is a trend despite the VBP. Keymed will face difficulties without NRDL negotiation....