Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

KraneShares CSI China Internet ETF / Event-Driven

<ul>
<li>The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.</li>
<li>On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules. </li>
<li>Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?</li>
</ul>


The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.
On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules. 
Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?


New CSRC "Provisions" Take a Step Towards Meeting PCAOB Requirements

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The market seems “not excited” with fruquintinib’s FDA approval.We analyzed the potential reasons behind.Beyond boosting market sentiment when license-out deal is announced initially,its practical impact on valuation could be limited.</li>
<li>HUTCHMED’s financial performance is good. The deal with Takeda helps to relieve cash-flow pressure. We think HUTCHMED is a relatively safe bet for investors as eventual breakeven is drawing near.</li>
<li>If based on conservative calculation, market value of about US$1,455-2,055 million is a good place to long.When market value is higher than US$3,500 million, it's time to consider taking profits.</li>
</ul>


The market seems “not excited” with fruquintinib’s FDA approval.We analyzed the potential reasons behind.Beyond boosting market sentiment when license-out deal is announced initially,its practical impact on valuation could be limited.
HUTCHMED’s financial performance is good. The deal with Takeda helps to relieve cash-flow pressure. We think HUTCHMED is a relatively safe bet for investors as eventual breakeven is drawing near.
If based on conservative calculation, market value of about US$1,455-2,055 million is a good place to long.When market value is higher than US$3,500 million, it's time to consider taking profits.


Hutchmed China Ltd (13.HK/​HCM.US) - A Valuable Option in the Portfolio

Thematic (Sector/Industry)

<ul>
<li>The assassination of Trump in July has greatly increased the probability of his election as president this year. However, a Trump presidency is not necessarily good for healthcare industry.</li>
<li>Trump's reform in the field of healthcare has two major propositions - One is to achieve the independence of US pharmaceutical supply chain. The other is to reduce drug prices.</li>
<li>From a US national security perspective, China's APIs/CXO would be the segments with the highest sanction risk. China Biotech may also face some headwinds. The risk of "decoupling" further increases.</li>
</ul>


The assassination of Trump in July has greatly increased the probability of his election as president this year. However, a Trump presidency is not necessarily good for healthcare industry.
Trump's reform in the field of healthcare has two major propositions - One is to achieve the independence of US pharmaceutical supply chain. The other is to reduce drug prices.
From a US national security perspective, China's APIs/CXO would be the segments with the highest sanction risk. China Biotech may also face some headwinds. The risk of "decoupling" further increases.


What Does a Trump Presidency Mean for China Healthcare?

Hutchison China MediTech Ltd / Equity Bottom-Up

<ul>
<li>HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. </li>
<li>Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.</li>
<li>Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.</li>
</ul>


HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. 
Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.
Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.


Hutchmed China Ltd (13.HK/​HCM.US) 23H1 - This Company Is Becoming More Attractive

<ul>
<li>Fosun's preferred arrangement for Henlius is to list the Company in A-shares.Since IPO in A-shares failed and Henlius has begun to generate profits, Fosun finally feels the need for privatization.</li>
<li>Due to its "flaws", undervaluation of Henlius in the Hong Kong stock market is difficult to fundamentally change. So, for conservative/cautious investors, Fosun's one-time acquisition at a 30% premium is attractive.</li>
<li>The Potential Share Alternative Offer seems a good option, but it is uncertain whether investors are still willing to believe in Fosun's "good story" - the future re-listing is uncertain.</li>
</ul>


Fosun's preferred arrangement for Henlius is to list the Company in A-shares.Since IPO in A-shares failed and Henlius has begun to generate profits, Fosun finally feels the need for privatization.
Due to its "flaws", undervaluation of Henlius in the Hong Kong stock market is difficult to fundamentally change. So, for conservative/cautious investors, Fosun's one-time acquisition at a 30% premium is attractive.
The Potential Share Alternative Offer seems a good option, but it is uncertain whether investors are still willing to believe in Fosun's "good story" - the future re-listing is uncertain.


Shanghai Henlius Biotech Update (2696.HK) - The Story Behind Privatization

Hong Kong

HUTCHMED (China) Limited develops, manufactures, and sells pharmaceutical products. The Company offers drugs for oncology and autoimmune diseases treatment. HUTCHMED (China) markets its products worldwide.

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52-week Range	0.00 - 0.00
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Hutchmed China Ltd (13 HK)

New CSRC "Provisions" Take a Step Towards Meeting PCAOB Requirements

CSRC has published new Provisions putting the onus of info management on companies, making it easier for the PCAOB to conduct on-site audits. It...

Travis Lundy