HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

Chongqing Taiji Industry (Group) A / Event-Driven

<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

China Traditional Chinese Medicine / Event-Driven

<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 ?

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 provides ammunition to both the bulls and bears. Since falling on no news on 26 June, the spread has widened to 31.8%. </li>
<li>The bull view is that while the timelines are delayed, the privatisation remains on track as the update shows ongoing progress in satisfying the pre-condition. </li>
<li>The bear view is that progress remains glacial, as the consortium wants to withdraw from a binding offer by failing to satisfy the pre-condition before the long stop date.</li>
</ul>



China Traditional Chinese Medicine (570 HK)’s monthly update provides ammunition to both the bulls and bears. Since falling on no news on 26 June, the spread has widened to 31.8%. 
The bull view is that while the timelines are delayed, the privatisation remains on track as the update shows ongoing progress in satisfying the pre-condition. 
The bear view is that progress remains glacial, as the consortium wants to withdraw from a binding offer by failing to satisfy the pre-condition before the long stop date.


China Traditional Chinese Medicine (570 HK): Update Provides Fodder for Bulls and Bears

<ul>
<li>On no news, <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> shares declined 12% today. We spoke to several readers to gauge the likely reasons for the fall.</li>
<li>The speculation is that the fall could be due to forced liquidation, Sinopharm’s new Chairman pulling the offer, the consortium unravelling, SAMR issues and Ping An blocking the deal. </li>
<li>There is clearly news behind today’s fall, but none of the above rumours seem credible. The risk/reward is attractive as the upside (25% spread) outweighs the downside (18% to undisturbed).</li>
</ul>


On no news, China Traditional Chinese Medicine (570 HK) shares declined 12% today. We spoke to several readers to gauge the likely reasons for the fall.
The speculation is that the fall could be due to forced liquidation, Sinopharm’s new Chairman pulling the offer, the consortium unravelling, SAMR issues and Ping An blocking the deal. 
There is clearly news behind today’s fall, but none of the above rumours seem credible. The risk/reward is attractive as the upside (25% spread) outweighs the downside (18% to undisturbed).


China Traditional Chinese Medicine (570 HK): Something Is Brewing, but Nobody Knows Quite What

<ul>
<li>Some investors have concerns that the privatization may fail. We also noticed that Morgan Stanley raised China TCM's target price to HK$5.4. However, the privatization of China TCM seems “mandatory”.</li>
<li>At this stage, some background information is worth the attention, which will help investors better understand the logic behind this privatization and thus resolve the "confusion".</li>
<li>According to regulatory requirements, it's expected that both CNPGC and Taiji will integrate resources in pharmaceutical manufacturing and distribution sectors, so as to solve horizontal competition issue between the two.</li>
</ul>


Some investors have concerns that the privatization may fail. We also noticed that Morgan Stanley raised China TCM's target price to HK$5.4. However, the privatization of China TCM seems “mandatory”.
At this stage, some background information is worth the attention, which will help investors better understand the logic behind this privatization and thus resolve the "confusion".
According to regulatory requirements, it's expected that both CNPGC and Taiji will integrate resources in pharmaceutical manufacturing and distribution sectors, so as to solve horizontal competition issue between the two.


China TCM (570.HK) Update - Despite Doubts, This Privatization Seems “Mandatory”

China

Shanghai Shyndec Pharmaceutical Co.,Ltd. develops, manufactures and distributes pharmaceuticals. The Company's products include antibiotics, hypertension drugs, diet pills, anti-aging drugs, biological products and medicine preparations.

Shanghai Shyndec Pharmaceutical (600420 CH)

Yifan Pharmaceutical Co.,Ltd. manufactures fine biochemicals. The Company's main products include food additives, pharmaceuticals, fine chemical products, calcium pantothenate, and polymer materials. The Company also offers technology development and transfer, in addition to technical advice and services.

Apeloa Pharmaceutical Co., Ltd. manufactures and markets raw material medicines and preparations, including antitumour, antivirus, anti-infectious, cardiovascular, and other medicines.

Shenzhen Hepalink Pharmaceutical Co., Ltd researches, produces and sells heparin pharmaceuticals products.  The Company's products include heparin sodium active pharmaceutical ingredient.

Tonghua Golden-Horse Pharmaceutical Industry Co., Ltd. develops, manufactures and markets medicines, biochemical preparations, and health care products.

Tonghua Golden Horse Pharmcl Indu (000766 CH)

Jilin Aodong Pharmaceutical Group Co Ltd develops and manufactures traditional Chinese pharmaceuticals and raises deer. The Company's main products  include brain enhancement, blood enrichment, and other medicines. In addition, Jilin Aodong constructs and operates toll roads.

Jilin Aodong Medicine Industry Group Co (000623 CH)

Tonghua Dongbao Pharmaceutical Co., Ltd. manufactures and markets western medici nes, Chinese medicines, biological products, and plastic building materials.

Tonghua Dongbao Pharmaceutical (600867 CH)

Anhui Anke Biotechnology (Group) Company Ltd. develops, manufactures and markets pharmaceuticals and health-care products including genetic and cellular engineering research and products.

Anhui Anke Biotechnology (Group) (300009 CH)

Tianjin Zhongxin Pharmaceutical Group Corporation Limited produces and sells traditional Chinese medicine, western medicine, health products, and healthcare instruments.  The Group also manufactures gene-related biopharmaceutical products.  Tianjin Zhongxin markets its products under the Great Wall, Cypress, and Health brand names.

Tianjin Zhongxin Phrmctl Gp Cp (600329 CH)

Jiangzhong Pharmaceutical Co., Ltd. operates in pharmaceutical manufacturing industry.  The Company's products include Chinese medicine preparations, penicillin, and other pharmaceuticals.

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

China Traditional Chinese Medicine (570 HK)

Oneness Biotech Co Ltd develops botanical new drugs and several biological-active new chemical entities that are purified and molecularly modified from these botanical sources.

TSUMURA & CO. manufactures and sells pharmaceutical products including Chinese medicines.  The Company also manufactures and sells bathing products, cosmetics, and other healthcare and toiletry products.  Tsumura & Co. sells its products in Japan and overseas markets.

Astrazeneca Pharma India Ltd manufactures basic drugs, pharmaceutical formulations, fine chemicals and industrial chemicals.  The Company's popular drugs include "Betaloc Durules," "Sensorcaine," "Theobric," "Restomycin," "Bromenyl" and "Febrafen."

The United Laboratories International Holdings Limited produces and distributes pharmaceutical products. The Company's products include finished products, APIs, intermediates, and capsules.

The United Laboratories International Holdings Limited (3933 HK)

The United Laboratories International Holdings Limited

Amphastar Pharmaceuticals, Inc. develops and manufactures generic and proprietary injectable and inhaleable pharmaceutical products.

HISAMITSU PHARMACEUTICAL CO., INC. produces and sells pharmaceutical products. The Company's main product is anti-inflammatory analgesic plasters and poultices sold under the brand name Salonpas.  Hisamitsu Pharmaceutical exports its products to North America and Southeast Asia.  The Company also researches and develops antibacterial products through its related company, RRF.

Lotus Pharmaceutical Co., Ltd. manufactures and distributes oral medicine, ointment and injection medicine.

Almirall SA is an international pharmaceutical company. The Company produces allergy and respiratory, cardiovascular, central nervous system, digestive, infectious disease, oncology, osteomuscular, pediatric, and urology  drugs.

Amneal Pharmaceuticals, Inc. operates as a pharmaceutical company. The Company specializes in developing, manufacturing, marketing, and distributing generic and biosimilar pharmaceutical products. Amneal Pharmaceuticals serves clients worldwide.

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
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Chongqing Taiji Industry (Group) A (600129 CH)

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) - 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

China Traditional Chinese Medicine (570 HK): Update Provides Fodder for Bulls and Bears

It is rare for the market to misprice an HKEx merger arb to this extent, suggesting something is amiss. Nevertheless, the risk (10.6% downside) vs...

Arun George

China Traditional Chinese Medicine (570 HK): Something Is Brewing, but Nobody Knows Quite What

We spoke to several readers to gauge the likely reasons for the share price fall. There is clearly news behind today’s fall, but none of the...

Arun George

China TCM (570.HK) Update - Despite Doubts, This Privatization Seems “Mandatory”

Some investors have concerns that the privatization may fail, but China TCM's privatization seems "mandatory", which will lead to spin-off...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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) - 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

China Traditional Chinese Medicine (570 HK): Update Provides Fodder for Bulls and Bears

It is rare for the market to misprice an HKEx merger arb to this extent, suggesting something is amiss. Nevertheless, the risk (10.6% downside) vs...

Arun George

China Traditional Chinese Medicine (570 HK): Something Is Brewing, but Nobody Knows Quite What

We spoke to several readers to gauge the likely reasons for the share price fall. There is clearly news behind today’s fall, but none of the...

Arun George

China TCM (570.HK) Update - Despite Doubts, This Privatization Seems “Mandatory”

Some investors have concerns that the privatization may fail, but ​China TCM's privatization seems "mandatory", which will lead to spin-off...

Xinyao (Criss) Wang

Some investors have concerns that the privatization may fail, but China TCM's privatization seems "mandatory", which will lead to spin-off...