HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Lu DaoPei Medical Group Holding / Equity Capital Markets

<ul>
<li>The government has started to encourage social capital to run hospitals. By entering the market that haven't been fully covered by public hospitals, LDP has large development space theoretically.</li>
<li>The current gross profit margin of LDP isn't satisfactory. Together with continuous expansion of new hospitals with large investment, LDP could face either continuous loss or very low profit margin.</li>
<li>China’s high degree of regulation depresses medical service price.The benefit chain of hospitals is complicated.In essence, an industry with low level of terminal payment is hard to generate high profits.</li>
</ul>


The government has started to encourage social capital to run hospitals. By entering the market that haven't been fully covered by public hospitals, LDP has large development space theoretically.
The current gross profit margin of LDP isn't satisfactory. Together with continuous expansion of new hospitals with large investment, LDP could face either continuous loss or very low profit margin.
China’s high degree of regulation depresses medical service price.The benefit chain of hospitals is complicated.In essence, an industry with low level of terminal payment is hard to generate high profits.


Pre-IPO Lu DaoPei Medical Group - Profitability Is Disappointing Despite Big Potential Theoretically

Equity Bottom-Up

Hygeia Healthcare Group / Equity Bottom-Up

<ul>
<li>In 2022, Hygeia maintained stable revenue growth but with lower-than-expected profit performance. We think Hygeia’s profitability would improve gradually in the future as more and more new hospitals become break-even.</li>
<li>Different from Aier/Topchoice, Hygeia’s acquired hospitals would be directly incorporated into the listed company, which means all aspects of consideration would be prudent. This is clearly more beneficial for investors/shareholders.</li>
<li>Hygeia’s business model has proven to be replicable.The implementation of DRG policy has no significant impact on profitability. Hygeia is expected to have higher valuation than Aier/Topchoice in the future.</li>
</ul>


In 2022, Hygeia maintained stable revenue growth but with lower-than-expected profit performance. We think Hygeia’s profitability would improve gradually in the future as more and more new hospitals become break-even.
Different from Aier/Topchoice, Hygeia’s acquired hospitals would be directly incorporated into the listed company, which means all aspects of consideration would be prudent. This is clearly more beneficial for investors/shareholders.
Hygeia’s business model has proven to be replicable.The implementation of DRG policy has no significant impact on profitability. Hygeia is expected to have higher valuation than Aier/Topchoice in the future.


Hygeia Healthcare (6078.HK) - Profits Fell Short of Expectations, but the Outlook Remains Positive

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

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.

New Ruipeng Pet Group / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/new-ruipeng-pet-group-inc" target="_blank" data-smartkarma-citation="entities:36735:1" rel="noopener">New Ruipeng Pet Group (RPET US)</a> is looking to raise at least US$100m in its upcoming US IPO.</li>
<li>New Ruipeng Pet Group (Ruipeng) is a pet services platform, primarily offering pet care services, supply chain services and local services, covering the entire lifecycle of pets. </li>
<li>In our previous notes, we have looked at the company’s past performance. In this note, we undertake a peer comparison.</li>
</ul>



New Ruipeng Pet Group (RPET US) is looking to raise at least US$100m in its upcoming US IPO.
New Ruipeng Pet Group (Ruipeng) is a pet services platform, primarily offering pet care services, supply chain services and local services, covering the entire lifecycle of pets. 
In our previous notes, we have looked at the company’s past performance. In this note, we undertake a peer comparison.


New Ruipeng Pet Group Pre-IPO Peer Comparison - Largest Domestic Player, but Smallest Margins

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.</li>
<li>As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.</li>
<li>China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.</li>
</ul>


The MSCI EM vs.EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the DXY peaked in November 2022, and also shows signs of reversing the 2-year downtrend.
As long as the DXY remains below $103.50-$106, we expect outperformance from EM to continue.
China/Hong Kong, Greece, South Africa, and Mexico stand out as attractive countries. Our top actionable Sectors include Communications, Consumer Discretionary, and Technology. We highlight 76 attractive EM stocks.


EM Outperformance to Continue (Vs. EAFE) -- Add on a Pullback; DXY Needs to Hold Below $106

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

China

Hygeia is a China based oncology healthcare group.

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Hygeia Healthcare Group (6078 HK)

Pre-IPO Lu DaoPei Medical Group - Profitability Is Disappointing Despite Big Potential Theoretically

Lu DaoPei has strength in hematology healthcare service,but if LDP can't smoothly reflect the advantages in financial reports,it indicates that...

Xinyao (Criss) Wang

Hygeia Healthcare (6078.HK) - Profits Fell Short of Expectations, but the Outlook Remains Positive

It takes time for Hygeia to deliver stable/good profit performance considering its business nature. Due to its replicable development model, there...

Xinyao (Criss) Wang

New Ruipeng Pet Group Pre-IPO Peer Comparison - Largest Domestic Player, but Smallest Margins

New Ruipeng Pet Group (RPET US) is looking to raise at least US$100m in its upcoming US IPO. In this note, we undertake a peer comparison.

Clarence Chu

EM Outperformance to Continue (Vs. EAFE) -- Add on a Pullback; DXY Needs to Hold Below $106

EM vs. EAFE ratio (local currency) shows EM has outperformed relative to EAFE since the $DXY peaked in November 2022. If the DXY remains below...

Vermilion Research

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

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