HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Ping An Healthcare and Technol / Equity Bottom-Up

<ul>
<li>Fang Weihao's departure means PAGD's strategic transformation failed. The business model of being a "vassal" of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.</li>
<li>PAGD is at a crossroads. The question is which development path will the new CEO choose - Follow Fang Weihao's strategy or return to the traditional Internet healthcare business model?</li>
<li>Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.</li>
</ul>


Fang Weihao's departure means PAGD's strategic transformation failed. The business model of being a "vassal" of Ping An Group seems hard to bring high valuation due to “discounted” growth potential.
PAGD is at a crossroads. The question is which development path will the new CEO choose - Follow Fang Weihao's strategy or return to the traditional Internet healthcare business model?
Both directions have painful costs that investors will not be happy with. Therefore, we recommend that investors remain sober and rational in the face of the bullish view on PAGD.


Ping An Healthcare and Technology (1833.HK) - Valuation Logic May Completely Change Due to New Path

<ul>
<li>PAGD successfully narrowed net loss. It seems that the Company doesn’t mind “sacrificing” revenue scale, which could be considered "a necessary price" to pay for the transition to 2B model.</li>
<li>PAGD mainly rely on Ping An Group channels to acquire B-end and F-end users, but based on our calculation, PAGD would encounter an obvious growth ceiling at certain revenue scale.</li>
<li>Although PAGD could achieve breakeven by divesting businesses with low strategic synergies and effective cost control, the Company's long-term growth potential and prospects remain uncertain, leading to discounted valuation.  </li>
</ul>


PAGD successfully narrowed net loss. It seems that the Company doesn’t mind “sacrificing” revenue scale, which could be considered "a necessary price" to pay for the transition to 2B model.
PAGD mainly rely on Ping An Group channels to acquire B-end and F-end users, but based on our calculation, PAGD would encounter an obvious growth ceiling at certain revenue scale.
Although PAGD could achieve breakeven by divesting businesses with low strategic synergies and effective cost control, the Company's long-term growth potential and prospects remain uncertain, leading to discounted valuation.  


Ping An Healthcare and Technology (1833.HK) - Valuation Could Fall Again Due to Clear Growth Ceiling

Research from Quam Securities, Quam Securities

Quam Securities Research

Research from Quam Securities

Quam Securities

Since its inception in 1986, Quam Securities Limited (Quam Securities) has grown to become one of the few mid-tier securities brokerages in Hong Kong with global execution capabilities for both private and institutional clients. It boasts a well-established network in Greater China including Taiwan and in major world markets through the Global Alliance Partners (GAP). Quam Securities is well-positioned not only to harness and drive business within the China Tonghai International Financial Limited but also between China and the world markets.

<ul><li>Ping An Good Doctor ("PAGD") has almost finished the adjustments to businesses with low strategic synergies, implying revenue will no longer be negatively affected by the transformation.</li><li>GPM improvement showed that the differentiation strategy is working. Due to the lowered-than-expected revenue in 1H23, we have reduced our FY23/FY24 revenue forecasts by 30.9%/30.8% and our TP by 30% to HK$14.13.</li><li>As our new TP implies a potential downside of 20%, we downgrade PAGD to SELL.</li></ul>

Ping An Good Doctor ("PAGD") has almost finished the adjustments to businesses with low strategic synergies, implying revenue will no longer be negatively affected by the transformation.GPM improvement showed that the differentiation strategy is working. Due to the lowered-than-expected revenue in 1H23, we have reduced our FY23/FY24 revenue forecasts by 30.9%/30.8% and our TP by 30% to HK$14.13.As our new TP implies a potential downside of 20%, we downgrade PAGD to SELL.

Ping An Good Doctor (1833 HK) - Strategic Changes Done but Valuation Is High

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.</li><li>The significantly narrowed adjusted net loss was mainly driven by the execution of its Strategy 2.0 Continuum to focus on corporate (B-end) clients as well as various cost saving measures during the period.</li><li>In 1H23, PAGD had largely completed its business adjustment, through which the Company proactively reduced low-synergy businesses with its Strategy 2.0 Continuum. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.The significantly narrowed adjusted net loss was mainly driven by the execution of its Strategy 2.0 Continuum to focus on corporate (B-end) clients as well as various cost saving measures during the period.In 1H23, PAGD had largely completed its business adjustment, through which the Company proactively reduced low-synergy businesses with its Strategy 2.0 Continuum. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

PA Good Doctor (1833 HK) – Business Restructuring Closes to the End

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.</li>
<li>The reference period for the September 2024 index rebal event is now complete. In this insight, we take a look at our final expectations for index changes.</li>
<li>Our current estimates suggest one-way flows due to index changes and capping could be around US$733mn but that could change by early September 2024.</li>
</ul>


The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
The reference period for the September 2024 index rebal event is now complete. In this insight, we take a look at our final expectations for index changes.
Our current estimates suggest one-way flows due to index changes and capping could be around US$733mn but that could change by early September 2024.


Quiddity Leaderboard HSTECH Sep 24: Reference Period Over; One Change Likely; US$733mn One-Way

China

Laobaixing Pharmacy Chain JSC wholesales and distributes medical products. The Company provides Chinese herbal medicines, antibiotic preparations, biochemical drugs, and other products. Laobaixing Pharmacy Chain also provides medical equipment.

Shenzhen Agricultural Products Co., Ltd. operates chain supermarkets and wholesale markets for agricultural products.  The Company also provides agricultural products processing and other related services.

Shenzhen Agricultural Products Co, Ltd. (000061 CH)

Yixintang Pharmaceutical Group Co., Ltd. operates pharmaceutical stores. The Company retails Chinese medicines, western medicines, and other products. Yixintang Pharmaceutical Group also provides medical equipment.

Yixintang Pharmaceutical Group (002727 CH)

Shanghai Bailian Group Co.,Ltd. operates as a supermarket. The Company retails vegetables, fruits, meats, seafood, delicatessen products, sweets, snacks, and other related products. Shanghai Bailian Group also operates department store business.

COFCO Joycome Foods Limited engages in animal meat production. The Company produces, processes, distributes, and sells fresh pork, pork products, and animal feeds. COFCO Joycome Foods also operates and manages slaughterhouse throughout China.

Beijing Hualian Hypermarket Co., Ltd. operates supermarkets and department stores.  The Company sells groceries, knitting products, medical instruments, hardware, chemical materials, food, beverages, construction materials, arts and crafts, jewelry, furniture, computers, air-conditioning equipment, metal materials, and other merchandise.

Beijing Hualian Hypermarket Co, Ltd. (600361 CH)

Sanjiang Shopping Club Company Limited operates community budget supermarket franchises. The Company provides customers with retail services.

New Huadu Supercenter Co., Ltd. engages in chain operations in marketplaces, sup ermarkets, department stores.

Better Life Commercial Chain Share Co., Ltd. operates a chain of supermarkets, general merchandise stores and household electrical appliances stores.

Better Life Comm Chain Share Co (002251 CH)

Yonghui Superstores Company Limited operates supermarket franchises . The Company mainly operates hypermarkets, marketplace and supermarkets.

Sun Art Retail Group Ltd. operates hypermarkets.  The Company retails food and offers amenities such as restaurants, automated teller machines, pharmacies and dry cleaners.

Chefs' Warehouse Inc. is a premier distributor of specialty food products in the United States. The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools and specialty food stores.

GS Retail Co., Ltd. operates a chain of retail stores. The Company provides beauty and skincare products, candles, gifts, perfumes, ornaments, bathroom accessories, and other products. GS Retail serves its customers in the Republic of South Korea.

The Andersons, Inc. merchandises grain, operates grain elevator facilities, distributes wholesale agricultural fertilizer, and distributes agricultural inputs to dealers and farmers.  The Company also manufactures lawn fertilizer and corncob-based products, and purchases, sells, repairs, and leases railcars. In addition, The Andersons operates retail stores and a distribution center.

Sheng Siong Group Ltd is a retailer in Singapore.  The Company operates a groceries chain across Singapore. Sheng Siong's stores provide fresh and chilled produce, seafood, meat and vegetables, processed, packaged and preserved food products as well as general merchandise such as toiletries and essential household items.

AIN HOLDINGS INC. operates and franchises pharmacies in Japan.  The Company primarily sells medicines, external-use medicine, cosmetics, and food products. AIN Pharmaciez also conducts clinical tests for medical institutions.

Dongsuh Companies Inc. imports, manufactures, processes, markets and distributes general food products such as vegetable cooking oils. The Company also produces packaging materials and ceramic products including food and oil containers. Dongsuh has a cooperative relationship with Kraft Foods Inc.

Ingles Markets, Incorporated operates a supermarket chain in the southeastern United States.  The Company also owns and operates neighborhood shopping centers.

CREATE SD HOLDINGS Co Ltd operates a chain of drug stores based in Kanagawa. The Company sells medical supplies, cosmetics, foodstuff, baby products and daily goods. CREATE SD HOLDINGS also sells prescription medicine.

Puregold Price Club, Inc. operates wholesale and retail stores, including supermarkets.

Ping An Healthcare and Technology Company Limited provides health care software solutions. The Company offers mobile platform for online consultation, hospital referral and appointment, health management, and wellness interaction services, as well as connects consumers and patients with health care resources. Ping An Healthcare and Technology serves customers in China.

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Ping An Healthcare and Technol (1833 HK)

Ping An Healthcare and Technology (1833.HK) - Valuation Logic May Completely Change Due to New Path

The core of future development of PAGD is not who the CEO is, but what kind of development path it will take. Valuation logic would change...

Xinyao (Criss) Wang

Ping An Healthcare and Technology (1833.HK) - Valuation Could Fall Again Due to Clear Growth Ceiling

PAGD looks good at strategic transformation with narrowed net loss, but long-term growth potential remain uncertain due to a clear growth ceiling....

Xinyao (Criss) Wang

Ping An Good Doctor (1833 HK) - Strategic Changes Done but Valuation Is High

Ping An Good Doctor ("PAGD") has almost finished the adjustments to businesses with low strategic synergies, implying revenue will no longer be...

Quam Securities

PA Good Doctor (1833 HK) – Business Restructuring Closes to the End

PA Good Doctor (PAGD) reported 1H23 revenue of RMB2,222mn, down by 21.5% YoY and adjusted non-IFRS net loss of RMB249mn, narrowed by 41.7% YoY.

CMB International

Quiddity Leaderboard HSTECH Sep 24: Reference Period Over; One Change Likely; US$733mn One-Way

The expected ADD ASMPT could have 15 days of volume to buy while the expected DEL Ping An Healthcare could have 9 days of volume to sell.

Janaghan Jeyakumar, CFA

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