HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Ping An Healthcare and Technology / Equity Bottom-Up

<ul>
<li>Just as we analyzed before, things get worse for PAGD. The loss expanded and gross margin declined. The gap between PAGD and its peers (JD Health, Alibaba Health) is widening. </li>
<li>PAGD’s Achilles' heel is its business model/profit model is untenable. The new HMO services system would not help turn things around because China's national condition is different from the US.</li>
<li>Being on the wrong track, PAGD’s financial performance is expected to further weaken. We are conservative about PAGD’s outlook. Any brief upwards movement is just dead cat bounce.</li>
</ul>


Just as we analyzed before, things get worse for PAGD. The loss expanded and gross margin declined. The gap between PAGD and its peers (JD Health, Alibaba Health) is widening. 
PAGD’s Achilles' heel is its business model/profit model is untenable. The new HMO services system would not help turn things around because China's national condition is different from the US.
Being on the wrong track, PAGD’s financial performance is expected to further weaken. We are conservative about PAGD’s outlook. Any brief upwards movement is just dead cat bounce.


Ping An Healthcare and Technology (1833.HK) - Untenable Business Model Worsen the Logic and Outlook

Equity Capital Markets

Beijing Yuanxin Technology Group Co Ltd / Equity Capital Markets

<ul>
<li>Based on the business analysis, <a href="https://www.smartkarma.com/entities/beijing-yuanxin-technology-group-co-ltd" target="_blank" data-smartkarma-citation="entities:34685:1" rel="noopener">Beijing Yuanxin Technology Group Co Ltd (1865453D CH)</a> is more of a traditional offline chain drugstores than a healthcare technology company.</li>
<li>Yuanxin has been suffering from loss for years. With a gross margin of lower than 10%, it's going to be tough to turn a profit, leading to concerns on survival. </li>
<li>Due to the fierce competition in each of its businesses, homogeneous business model, weak financial position, lack of high moat, policy risks, etc., we are conservative about the Company’s outlook.</li>
</ul>


Based on the business analysis, Beijing Yuanxin Technology Group Co Ltd (1865453D CH) is more of a traditional offline chain drugstores than a healthcare technology company.
Yuanxin has been suffering from loss for years. With a gross margin of lower than 10%, it's going to be tough to turn a profit, leading to concerns on survival. 
Due to the fierce competition in each of its businesses, homogeneous business model, weak financial position, lack of high moat, policy risks, etc., we are conservative about the Company’s outlook.


Pre-IPO Beijing Yuanxin Technology Group - Conservative About the Outlook

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>ClouDr was the largest digital chronic condition management solution provider in China. The company’ application for a HKEx IPO has been approved and plans to raise proceeds of around US$500m.</li>
<li>The company is well positioned to benefit from growing demand for digital healthcare marketing and services in China driven by increased health awareness, technological advancements and prevalence of chronic conditions.</li>
<li>In this insight, we examine the company’s business model, segments and financials.</li>
</ul>


ClouDr was the largest digital chronic condition management solution provider in China. The company’ application for a HKEx IPO has been approved and plans to raise proceeds of around US$500m.
The company is well positioned to benefit from growing demand for digital healthcare marketing and services in China driven by increased health awareness, technological advancements and prevalence of chronic conditions.
In this insight, we examine the company’s business model, segments and financials.


ClouDr IPO: Strong Business Model with Multiple Revenue Channels

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 statistics on top repurchases over one week, one month, one quarter and one year periods ended on May 27th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Jd Health (6618 HK), Esr Cayman (1821 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Jd Health (6618 HK), Smoore International (6969 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on May 27th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Jd Health (6618 HK), Esr Cayman (1821 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Jd Health (6618 HK), Smoore International (6969 HK).


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

Orient Overseas International / Event-Driven

<ul>
<li>The inclusion of <a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International</a>, <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group</a>, <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC)</a> and <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao</a> plus the deletion of <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings</a> takes us to 69 index stocks.</li>
<li>Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover is 3.43% and will result in a one-way trade of HK$7,444m.</li>
<li>There is huge short interest on <a href="https://www.smartkarma.com/entities/zhongsheng-group-holdings" target="_blank" data-smartkarma-citation="entities:10573:1" rel="noopener">Zhongsheng Group (881 HK)</a> and <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a> and there could be some short covering from now to implementation.</li>
</ul>


The inclusion of Orient Overseas International, Zhongsheng Group, Semiconductor Manufacturing International Corp (SMIC) and China Hongqiao plus the deletion of AAC Technologies Holdings takes us to 69 index stocks.
Changes to the stocks, number of shares, float and capping result in an estimated one-way turnover is 3.43% and will result in a one-way trade of HK$7,444m.
There is huge short interest on Zhongsheng Group (881 HK) and China Hongqiao (1378 HK) and there could be some short covering from now to implementation.


HSI Index Rebalance: Four Weddings & A Funeral

China

JD Health International Inc. operates drug stores. The Company retails Chinese and Western medicines, nutrition products, health care products, and other products. JD Health International markets its products throughout China.

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JD Health International (6618 HK)

Ping An Healthcare and Technology (1833.HK) - Untenable Business Model Worsen the Logic and Outlook

PAGD’s Achilles' heel is its business/profit model is untenable.The new HMO services will not turn things around.PAGD will enter a vicious circle...

Xinyao (Criss) Wang

Pre-IPO Beijing Yuanxin Technology Group - Conservative About the Outlook

Yuanxin is more of a traditional offline drugstores than a healthcare technology company. The fierce competition/homogeneous business model/weak...

Xinyao (Criss) Wang

ClouDr IPO: Strong Business Model with Multiple Revenue Channels

ClouDr was the largest digital chronic condition management solution provider in China. The company’ application for a HKEx IPO has been approved...

Shifara Samsudeen, ACMA, CGMA

Hong Kong Buybacks: AIA, JD Health, ESR

We highlight the top 3 companies that repurchased the most shares from the HK market in the past week were Aia (1299 HK), Jd Health (6618 HK), Esr...

Ke Yan, CFA, FRM

HSI Index Rebalance: Four Weddings & A Funeral

There are 4 adds & 1 delete to take the number of HSI members to 69. There is reasonable impact on the stocks and huge short interest on some of...

Brian Freitas

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