HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

160 Health International / Equity Capital Markets

<ul>
<li>160 Health collaborates with medical institutions and then get access to high-caliber medical professionals, which helps to attract patients/other business parties. So, its business model is B2B2C, similar to ClouDr.</li>
<li>However, ClouDr has much better performance than 160 Health, because ClouDr has established moat/barriers to more effectively monetize medical resources, while 160 Health is clearly lagging behind in this regard.</li>
<li>160 Health’s revenue mainly comes from sales of pharmaceutical and healthcare products, whose gross margin is very low. As the competition intensifies, the C-end customer acquisition cost would also increase.  </li>
</ul>


160 Health collaborates with medical institutions and then get access to high-caliber medical professionals, which helps to attract patients/other business parties. So, its business model is B2B2C, similar to ClouDr.
However, ClouDr has much better performance than 160 Health, because ClouDr has established moat/barriers to more effectively monetize medical resources, while 160 Health is clearly lagging behind in this regard.
160 Health’s revenue mainly comes from sales of pharmaceutical and healthcare products, whose gross margin is very low. As the competition intensifies, the C-end customer acquisition cost would also increase.  


Pre-IPO 160 Health - The Lack of Moat Has Led to Development Falling Far Short of Expectations

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/posco-dx-co-ltd" target="_blank" data-smartkarma-citation="entities:5198:1" rel="noopener">Posco DX (022100 KS)</a> continues to drop following its section transfer from the KOSDAQ market to the KOSPI market. Short interest in the stock nearly halved in December.</li>
<li>There were big net inflows to China ETFs with creations in <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-inde" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">CSI 300 Index</a> ETFs and redemptions in ETFs tracking the CSI 500 Index and CSI 1000 Index.</li>
<li>Creations continued in the <a href="https://www.smartkarma.com/entities/ishares-msci-emerging-markets-223f5da3-7054-4e4f-bc55-b7f0852c2581" target="_blank" data-smartkarma-citation="entities:31998:1" rel="noopener">iShares Emerging Markets ex China (EMXC US)</a> ETF with units outstanding reaching a new high.</li>
</ul>



Posco DX (022100 KS) continues to drop following its section transfer from the KOSDAQ market to the KOSPI market. Short interest in the stock nearly halved in December.
There were big net inflows to China ETFs with creations in CSI 300 Index ETFs and redemptions in ETFs tracking the CSI 500 Index and CSI 1000 Index.
Creations continued in the iShares Emerging Markets ex China (EMXC US) ETF with units outstanding reaching a new high.


Index Rebalance & ETF Flow Recap: HSCEI, HSCI, KRX New Deal, NIFTY50, NEXT50, CNXBANK

<ul>
<li>We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.</li>
<li>We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.
We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March

Neusoft Xikang Healthcare Technology Co Ltd / Equity Capital Markets

Neusoft Xikang Healthcare Technology Co Ltd

<ul>
<li>Either from business model or investment logic, the key is to increase the revenue proportion of cloud hospital platform services. However, many restrictions have led to difficulties in nationwide expansion.</li>
<li>Overreliance on government projects and public hospitals makes it difficult to generate high profits. Xikang may continue to suffer loss in the future, and its profitability is worrying. </li>
<li>Based on our analysis, it could be difficult for Xikang to achieve good valuation performance in the future. we think its valuation should be lower than that of ClouDr.</li>
</ul>


Either from business model or investment logic, the key is to increase the revenue proportion of cloud hospital platform services. However, many restrictions have led to difficulties in nationwide expansion.
Overreliance on government projects and public hospitals makes it difficult to generate high profits. Xikang may continue to suffer loss in the future, and its profitability is worrying. 
Based on our analysis, it could be difficult for Xikang to achieve good valuation performance in the future. we think its valuation should be lower than that of ClouDr.


Pre-IPO Neusoft Xikang (PHIP Updates) - Business Expansion and Profitability Remain in Doubt

<ul>
<li>HealthyWay cannot rely on drug/product sales to achieve rapid expansion of revenue scale because it hasn't huge user base accumulated on e-commerce platforms like Taobao/JD.com, leading to different business model.</li>
<li>Relying on Baidu's search engine to guide traffic could be worthless, because B-end users would not pay for the traffic that cannot provide added value.HealthyWay hasn't a strong cornerstone business. </li>
<li>HealthyWay’s valuation should be lower than that of ClouDr. Due to the lack of imagination space in business model, it would to some extent suppress the valuation growth of HealthyWay.</li>
</ul>


HealthyWay cannot rely on drug/product sales to achieve rapid expansion of revenue scale because it hasn't huge user base accumulated on e-commerce platforms like Taobao/JD.com, leading to different business model.
Relying on Baidu's search engine to guide traffic could be worthless, because B-end users would not pay for the traffic that cannot provide added value.HealthyWay hasn't a strong cornerstone business. 
HealthyWay’s valuation should be lower than that of ClouDr. Due to the lack of imagination space in business model, it would to some extent suppress the valuation growth of HealthyWay.


Pre-IPO HealthyWay - The Business Model Lacks Core Competitiveness

China

ClouDr Group Limited offers medical services. The Company provides in hospital solutions development, pharmacy solutions development, individual chronic condition management, and other services. ClouDr Group provides its services throughout Hong Kong.

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ClouDr Group (9955 HK)

Pre-IPO 160 Health - The Lack of Moat Has Led to Development Falling Far Short of Expectations

160 Health’s B2B2C business model is logical, but rich medical resources can't be effectively translated into performance. Whichever business...

Xinyao (Criss) Wang

Index Rebalance & ETF Flow Recap: HSCEI, HSCI, KRX New Deal, NIFTY50, NEXT50, CNXBANK

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March

There could be nearly 58 adds/deletes for the HSCI in September. That will trigger changes to the Southbound Stock Connect list and increase flows...

Brian Freitas

Pre-IPO Neusoft Xikang (PHIP Updates) - Business Expansion and Profitability Remain in Doubt

Restrictions imposed by cities would affect the scalability of business. Xikang may suffer long-term loss due to unproven profit model. It's...

Xinyao (Criss) Wang

Pre-IPO HealthyWay - The Business Model Lacks Core Competitiveness

HealthyWay's model is essentially an intermediary business.The seemingly abundant resources may not necessarily transform into substantial revenue...

Xinyao (Criss) Wang

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