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.

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> announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.</li>
<li>The pre-condition relates to various Chinese regulatory approvals. As SOE entities own the offeror, regulatory approvals will be a formality. The offer price is final. </li>
<li>
<a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, which holds a blocking stake, will be supportive. The offer is fair when the previously (higher) rumoured offers are adjusted for the market downturn. </li>
</ul>



China Traditional Chinese Medicine (570 HK) announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.
The pre-condition relates to various Chinese regulatory approvals. As SOE entities own the offeror, regulatory approvals will be a formality. The offer price is final. 

Ping An Insurance (H) (2318 HK), which holds a blocking stake, will be supportive. The offer is fair when the previously (higher) rumoured offers are adjusted for the market downturn. 


China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60

<ul>
<li>Bloomberg reports that Sinopharm is reviving its interest in privatising <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>/CTCM. Sinopharm has contacted banks about financing and is considering partnering with other investors.</li>
<li>Sinopharm’s best bet is to partner with <a href="https://www.smartkarma.com/entities/ping-an-insurance-group-co-of-c2975d60-47cd-4246-a7a6-25297586242b" target="_blank" data-smartkarma-citation="entities:24682:1" rel="noopener">Ping An Insurance Group of (601318 CH)</a> and privatise through a scheme. In this scenario, no disinterested shareholder would hold a blocking stake.</li>
<li>Due to Sinopharm's previous privatisation attempts, shareholders will be wary of the latest rumour. Nevertheless, the valuation is undemanding compared to peer multiples.</li>
</ul>


Bloomberg reports that Sinopharm is reviving its interest in privatising China Traditional Chinese Medicine (570 HK)/CTCM. Sinopharm has contacted banks about financing and is considering partnering with other investors.
Sinopharm’s best bet is to partner with Ping An Insurance Group of (601318 CH) and privatise through a scheme. In this scenario, no disinterested shareholder would hold a blocking stake.
Due to Sinopharm's previous privatisation attempts, shareholders will be wary of the latest rumour. Nevertheless, the valuation is undemanding compared to peer multiples.


China Traditional Chinese Med (570 HK): Third Time's the Charm as Sinopharm Revives Its Interest?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

CSPC Innovation Pharmaceutical-A / Equity Bottom-Up

<ul>
<li>If there’s ultimately substantial negative policies in the field of biopharmaceuticals between China and US, APIs will be the segment with the highest risk. But CXO would also be affected.</li>
<li>Now we have entered the harvest period after the previous peak of financing round in China's biotech industry, which has become a concentrated "peach picking period" for foreign pharmaceutical enterprises.</li>
<li>Considering the low market sentiment, we’re cautious on companies with high valuation elasticity before they come up with convincing products. So, we don’t recommend investors rush to bottom-fish CSPC Innovation.</li>
</ul>


If there’s ultimately substantial negative policies in the field of biopharmaceuticals between China and US, APIs will be the segment with the highest risk. But CXO would also be affected.
Now we have entered the harvest period after the previous peak of financing round in China's biotech industry, which has become a concentrated "peach picking period" for foreign pharmaceutical enterprises.
Considering the low market sentiment, we’re cautious on companies with high valuation elasticity before they come up with convincing products. So, we don’t recommend investors rush to bottom-fish CSPC Innovation.


China Healthcare Weekly (Feb.2) - US Strike on China CXOs, CSPC Innovation, Peach Picking Period

<ul>
<li>One direct reason for the sharp drop in stock prices is that RemeGen's performance in 23Q4 would miss expectation, thus leading to disappointing performance for the entire year of 2023.</li>
<li>Due to low competitiveness of pipelines, product sales are hard to bring sufficient cashflow.Prospects for future license-out deals are still uncertain. RemeGen may find it difficult to turn the tide.</li>
<li>Reasonable market value of Remegen should be above RMB12 billion. Investors can participate in the rebounds after stock price plunge, but we do not recommend holding for the long term.</li>
</ul>


One direct reason for the sharp drop in stock prices is that RemeGen's performance in 23Q4 would miss expectation, thus leading to disappointing performance for the entire year of 2023.
Due to low competitiveness of pipelines, product sales are hard to bring sufficient cashflow.Prospects for future license-out deals are still uncertain. RemeGen may find it difficult to turn the tide.
Reasonable market value of Remegen should be above RMB12 billion. Investors can participate in the rebounds after stock price plunge, but we do not recommend holding for the long term.


Remegen (9995.HK/688331.CH) - The Real Reasons for the Stock Price Collapse and the Future Prospects

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of January 19th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight the weekly Hong Kong connect flows for CCB.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of January 19th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight the weekly Hong Kong connect flows for CCB.


China

CSPC Pharmaceutical Group Limited, through its subsidiaries, manufactures and sells pharmaceutical products.  The Company's products include vitamin C, antibiotics and common generic drugs. The Company is also engages in the development of innovative drugs and antibiotics.

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CSPC Pharmaceutical Group (1093 HK)

China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60

The offer is attractive to historical trading ranges and peer multiples. Ping An, which holds a blocking stake, will be supportive. This looks like...

Arun George

China Traditional Chinese Med (570 HK): Third Time's the Charm as Sinopharm Revives Its Interest?

Due to Sinopharm's previous privatisation attempts, shareholders will be wary of the latest rumour. Nevertheless, the valuation is undemanding...

Arun George

China Healthcare Weekly (Feb.2) - US Strike on China CXOs, CSPC Innovation, Peach Picking Period

Debate about restricting China CXO has never gone away in US politics. MNCs have entered a concentrated "peach picking period" of China biotech....

Xinyao (Criss) Wang

Remegen (9995.HK/688331.CH) - The Real Reasons for the Stock Price Collapse and the Future Prospects

RemeGen's 23Q4 results will miss expectation, leading to poor performance for 2023.The pain point isn't cashflow shortage but weak...

Xinyao (Criss) Wang

Hong Kong Connect Flows (Jan 19th): CCB

We analyzed southbound Hong Kong connect flows in the past week and highlight southbound Hong Kong connect flows for CCB.

Ke Yan, CFA, FRM

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