HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>China issued the “Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035)”, where some statements are different from those in the  "14th Five-year Plan" and the 20th National Congress report.</li>
<li>We analyzed our interpretation and speculated the “wind direction” behind the difference in statements, so as to identify some possible changes in China healthcare industry in 2023.</li>
<li>
<em> The Outline</em> is not only in line with the adjustment of COVID policies,but also highly relevant to the major contradictions/changes in internal and external situations. Investors need to follow the trend.  </li>
</ul>


China issued the “Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035)”, where some statements are different from those in the  "14th Five-year Plan" and the 20th National Congress report.
We analyzed our interpretation and speculated the “wind direction” behind the difference in statements, so as to identify some possible changes in China healthcare industry in 2023.

 The Outline is not only in line with the adjustment of COVID policies,but also highly relevant to the major contradictions/changes in internal and external situations. Investors need to follow the trend.  


Identify New Directions of China Healthcare in 2023 – Major Changes In Highest Level Policy Document

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 6th.</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 flows for Tencent, China Mobile, Wuxi Biologics, Kuaishou Technology.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of January 6th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, China Mobile, Wuxi Biologics, Kuaishou Technology.


Hong Kong Connect Flows (Jan 6th): Tencent, China Mobile, Wuxi Biologics, Kuaishou

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

Alibaba Group Holding  / Equity Capital Markets

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs</li>
<li>On the IPO front,  only the smaller issuers were active with most following through on year end listing plans.</li>
<li>On placements front, HK market got going in a jiffy, riding on the coattails of China reopening.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs
On the IPO front,  only the smaller issuers were active with most following through on year end listing plans.
On placements front, HK market got going in a jiffy, riding on the coattails of China reopening.


ECM Weekly (8th Jan 2022) - Sinohytec, Beauty Farm, Sula, Kfin, Bionote, Meidong, CIFI, Jinxin Fert

Hygeia Healthcare Group / Equity Capital Markets

<ul>
<li>The government has changed its tone and started to encourage social capital to run hospitals, indicating that the previous concerns about the policy risk on Hygeia has been relieved.</li>
<li>At this stage, Hygeia has more investment value, greater expansion space and higher market demand than <a href="https://www.smartkarma.com/entities/aier-eye-hospital-group-co-ltd" target="_blank" data-smartkarma-citation="entities:1103:1" rel="noopener">Aier Eye Hospital</a>. Meanwhile, the Company performs better in trans provincial expansion than Topchoice. </li>
<li>Due to large investment/“heavy asset” model, Hygeia would continue to face capital pressure. Its expansion pace may not be as fast as expected if it hopes to control expansion quality. </li>
</ul>


The government has changed its tone and started to encourage social capital to run hospitals, indicating that the previous concerns about the policy risk on Hygeia has been relieved.
At this stage, Hygeia has more investment value, greater expansion space and higher market demand than Aier Eye Hospital. Meanwhile, the Company performs better in trans provincial expansion than Topchoice. 
Due to large investment/“heavy asset” model, Hygeia would continue to face capital pressure. Its expansion pace may not be as fast as expected if it hopes to control expansion quality. 


Hygeia Healthcare Placement (6078.HK)- The Prospect Is More Certain After the Policy Risk Is Removed

<ul>
<li>National Health Commission reiterated that the number of ICU beds in designated hospitals should reach 10% of total beds, but we think the expansion/construction of ICU should be treated rationally. </li>
<li>The medical demand in 2020-2022 was very abnormal. If demand returns to normal in 2023H2, the overall growth of the healthcare industry would return to natural growth.</li>
<li>Among the 53 companies listed under Chapter 18A, there’re less than 15 companies that are really seriously developing drugs/devices, which could be the fundamental reason for big differentiation of valuation.</li>
</ul>


National Health Commission reiterated that the number of ICU beds in designated hospitals should reach 10% of total beds, but we think the expansion/construction of ICU should be treated rationally. 
The medical demand in 2020-2022 was very abnormal. If demand returns to normal in 2023H2, the overall growth of the healthcare industry would return to natural growth.
Among the 53 companies listed under Chapter 18A, there’re less than 15 companies that are really seriously developing drugs/devices, which could be the fundamental reason for big differentiation of valuation.


China Healthcare Weekly (Dec.16) - ICU Expansion, Abnormal Medical Demand, Dying Chapter 18A of HKEX

China

Hygeia is a China based oncology healthcare group.

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Hygeia Healthcare Group (6078 HK)

Identify New Directions of China Healthcare in 2023 – Major Changes In Highest Level Policy Document

China issued the Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035), where some statements have changed, leading to the change...

Xinyao (Criss) Wang

Hong Kong Connect Flows (Jan 6th): Tencent, China Mobile, Wuxi Biologics, Kuaishou

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Tencent, China Mobile, Wuxi Biologics, Kuaishou.

Ke Yan, CFA, FRM

ECM Weekly (8th Jan 2022) - Sinohytec, Beauty Farm, Sula, Kfin, Bionote, Meidong, CIFI, Jinxin Fert

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Hygeia Healthcare Placement (6078.HK)- The Prospect Is More Certain After the Policy Risk Is Removed

The government has changed its tone to encourage social capital to run hospitals. So, policy risk is removed. Hygeia has more expansion space...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.16) - ICU Expansion, Abnormal Medical Demand, Dying Chapter 18A of HKEX

Investor should treat ICU expansion rationally due to staff shortage. Demand during COVID was abnormal, which may have natural growth in 23H2. IPO...

Xinyao (Criss) Wang

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