Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

JD Health International  / Equity Capital Markets

The development of a leading online healthcare services business not only is a critical component of JD Health’s strategy, but also a key support to the rumored listing valuation of US$20 billion. In contrast with the retail pharmacy business, the company's online healthcare services segment is in its infancy. In fact, the industry has yet to generate profits. This Insight takes a ground-level view of the online healthcare services sector using academic research and competitors' data to provide tools to evaluate JD Health's and its peers' execution.

The development of a leading online healthcare services business not only is a critical component of JD Health’s strategy, but also a key support to the rumored listing valuation of US$20 billion. In contrast with the retail pharmacy business, the company's online healthcare services segment is in its infancy. In fact, the industry has yet to generate profits. This Insight takes a ground-level view of the online healthcare services sector using academic research and competitors' data to provide tools to evaluate JD Health's and its peers' execution.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 13 November. The constituent changes will be effective after the close of trading on 4 December.For the Hang Seng TECH Index, there are 2 inclusions and 2 exclusions.The inclusions are <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a> and <a href="https://www.smartkarma.com/entities/archosaur-games" target="_blank" data-smartkarma-citation="entities:28948:1" rel="noopener">Archosaur Games (9990 HK)</a>, while the deletions are <a href="https://www.smartkarma.com/entities/hengten-networks-group-ltd" target="_blank" data-smartkarma-citation="entities:3296:1" rel="noopener">HengTen Ltd (136 HK)</a> and <a href="https://www.smartkarma.com/entities/netdragon-websoft-inc" target="_blank" data-smartkarma-citation="entities:3703:1" rel="noopener">Netdragon Websoft (777 HK)</a>. One way turnover is 7.97% due to the inclusions/ exclusions, capping, and free float changes.Both inclusions have 0.67 days of ADV to buy, <a href="https://www.smartkarma.com/entities/hengten-networks-group-ltd" target="_blank" data-smartkarma-citation="entities:3296:1" rel="noopener">HengTen Ltd (136 HK)</a> has 0.6 days of ADV to sell, while <a href="https://www.smartkarma.com/entities/netdragon-websoft-inc" target="_blank" data-smartkarma-citation="entities:3703:1" rel="noopener">Netdragon Websoft (777 HK)</a> has 1 day of ADV to sell.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 13 November. The constituent changes will be effective after the close of trading on 4 December.For the Hang Seng TECH Index, there are 2 inclusions and 2 exclusions.The inclusions are Ming Yuan Cloud Group (909 HK) and Archosaur Games (9990 HK), while the deletions are HengTen Ltd (136 HK) and Netdragon Websoft (777 HK). One way turnover is 7.97% due to the inclusions/ exclusions, capping, and free float changes.Both inclusions have 0.67 days of ADV to buy, HengTen Ltd (136 HK) has 0.6 days of ADV to sell, while Netdragon Websoft (777 HK) has 1 day of ADV to sell.

Hang Seng TECH Index Rebalance: Two Changes as Assets Continue to Grow

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*Potential Deal For Tahoe Life: According to a Bloomberg report, Ping An Insurance (2318.HK) [Ping An] (along with Sunshine Insurance Group in Beijing] is a finalist to acquire Tahoe Life, the Hong Kong-based life insurance subsidiary of Tahoe Investment, for over USD 1 bn; and*Other Goodies May Come Along With Deal: In addition to Tahoe Life, Tahoe Investment is a founding shareholder of Haixia Life Insurance and a major shareholder of Fujian Haixia Bank, Rural Credit Bank of Fuzhou, and Dongxing Securities. Given the financial troubles of Tahoe, we would have to imagine the sale of these businesses would also be on the table for Ping An and Sunshine as well.

*Potential Deal For Tahoe Life: According to a Bloomberg report, Ping An Insurance (2318.HK) [Ping An] (along with Sunshine Insurance Group in Beijing] is a finalist to acquire Tahoe Life, the Hong Kong-based life insurance subsidiary of Tahoe Investment, for over USD 1 bn; and*Other Goodies May Come Along With Deal: In addition to Tahoe Life, Tahoe Investment is a founding shareholder of Haixia Life Insurance and a major shareholder of Fujian Haixia Bank, Rural Credit Bank of Fuzhou, and Dongxing Securities. Given the financial troubles of Tahoe, we would have to imagine the sale of these businesses would also be on the table for Ping An and Sunshine as well.

Ping An Insurance – Where There Is Smoke...

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

1. Industry viewpoints: <ul>
<li>A new policy was released to clarify the scope and price of medical insurance payments for online healthcare service, which help open up the market scale of digital healthcare business.</li>
<li>Currently, some of the so-called "innovative drugs" in China are still far from real innovation, such as the PD-1 market.</li>
<li>Polypeptide drugs account for a small share in the global biomedical market, but they are developing rapidly.</li>
</ul>2. Company news:News from Wondfo Biotech, CSPC and Sino Biopharm about the new products for COVID-19 antigen tests, clinical progress on new category 1 drug and the new products that pass the consistency evaluation in China.3. Market review:Last week, stock price for healthcare sector in A share decreased 1.36%, while CSI 300 increased 4.05% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints: 
A new policy was released to clarify the scope and price of medical insurance payments for online healthcare service, which help open up the market scale of digital healthcare business.
Currently, some of the so-called "innovative drugs" in China are still far from real innovation, such as the PD-1 market.
Polypeptide drugs account for a small share in the global biomedical market, but they are developing rapidly.
2. Company news:News from Wondfo Biotech, CSPC and Sino Biopharm about the new products for COVID-19 antigen tests, clinical progress on new category 1 drug and the new products that pass the consistency evaluation in China.3. Market review:Last week, stock price for healthcare sector in A share decreased 1.36%, while CSI 300 increased 4.05% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (JDH HK)</a> is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health has been operating as a stand-alone business unit of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> since February 2014. JD Health will kick off its listing hearing this week for a Hong Kong IPO to raise around $3 billion, according to IFR. In response to the COVID-19 outbreak, individuals are increasingly focused on personal health and wellbeing which has driven user acceptance of online healthcare platforms. The proportion of digitalisation in the Chinese health and wellness market is expected to increase rapidly from 3.3% in 2019 to 24.0% of China’s total healthcare expenditure in 2030, according to Frost and Sullivan. Consequently, the shares of <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a> and <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a> are up 82% and 156% YTD.<div class="content-highlight">JD Health’s IPO is well-timed to benefit from the strong investor sentiment on online healthcare platforms. Overall, we believe that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry.</div>

JD Health (JDH HK) is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health has been operating as a stand-alone business unit of JD.com Inc (ADR) (JD US) since February 2014. JD Health will kick off its listing hearing this week for a Hong Kong IPO to raise around $3 billion, according to IFR. In response to the COVID-19 outbreak, individuals are increasingly focused on personal health and wellbeing which has driven user acceptance of online healthcare platforms. The proportion of digitalisation in the Chinese health and wellness market is expected to increase rapidly from 3.3% in 2019 to 24.0% of China’s total healthcare expenditure in 2030, according to Frost and Sullivan. Consequently, the shares of Ping An Healthcare and Technology Company Limited (1833 HK) and Alibaba Health Information Technology (241 HK) are up 82% and 156% YTD.JD Health’s IPO is well-timed to benefit from the strong investor sentiment on online healthcare platforms. Overall, we believe that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry.

China

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)

JD Health: Examining the Infant

This Insight offers a ground-level view of the nascent online healthcare services sector using academic research and other sources to evaluate the...

Kemp Dolliver, CFA

Hang Seng TECH Index Rebalance: Two Changes as Assets Continue to Grow

The first review of the Hang Seng TECH index has 2 inclusions and 2 deletions. Assets benchmarked to the index are north of US$1.1bn and will...

Brian Freitas

Ping An Insurance – Where There Is Smoke...

PING AN INSURANCE: Tahoe Life Appears To Be Up For Sale, Given The Financial Troubles Of Tahoe Investment. Ping An Is Likely A Bidder, And Other...

Thomas J. Monaco

China Healthcare Weekly (Nov.6)

This article summarized the new healthcare policy released in China, major industry viewpoints, company news and capital markets review for the...

Xinyao (Criss) Wang

JD Health IPO Initiation: E-Ppointments

JD Health’s IPO is well-timed to benefit from the strong investor sentiment on online healthcare platforms. Overall, JD Health’s fundamentals...

Arun George

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