HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shanghai Pharmaceuticals Holding / Equity Bottom-Up

<ul>
<li>Due to the low base in 2023, net profit in 2024 would show restorative growth, with net profit attributable to owners of the company reaching RMB5+ billion, up 33% YoY.</li>
<li>Different from Sinopharm/CRP whose assets are scattered in different listed companies, pharmaceutical assets/resources of SH Pharma are integrated within the Company, so the intrinsic value of this model is greater.</li>
<li>SH Pharma is undervalued. Interim dividend will be added in 2024.Future dividend ratio would remain 30+%.SH Pharma as a SOE takes the lead in responding to policies to increase dividends.</li>
</ul>


Due to the low base in 2023, net profit in 2024 would show restorative growth, with net profit attributable to owners of the company reaching RMB5+ billion, up 33% YoY.
Different from Sinopharm/CRP whose assets are scattered in different listed companies, pharmaceutical assets/resources of SH Pharma are integrated within the Company, so the intrinsic value of this model is greater.
SH Pharma is undervalued. Interim dividend will be added in 2024.Future dividend ratio would remain 30+%.SH Pharma as a SOE takes the lead in responding to policies to increase dividends.


Shanghai Pharmaceuticals (2607.HK/601607.CH) - Profit Will Resume High Growth in 2024

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>CSRC's Market Value Management Guidelines will indirectly benefit the H-share stocks with their A-share counterparts with a P/B of below 1x.  </li>
<li>Chinese banks dominated the list with below-book A-shares. <a href="https://www.smartkarma.com/entities/china-everbright-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:16221:1" rel="noopener">China Everbright Bank (6818 HK)</a>, <a href="https://www.smartkarma.com/entities/china-citic-bank-corp-ltd-ea6c25fd-4b20-45cb-a4a6-df7a60136f03" target="_blank" data-smartkarma-citation="entities:653:1" rel="noopener">China Citic Bank H (998 HK)</a>, and <a href="https://www.smartkarma.com/entities/industrial-and-commercial-bank-of-china-limited" target="_blank" data-smartkarma-citation="entities:1119:1" rel="noopener">ICBC (H) (1398 HK)</a> are the prime beneficiaries.</li>
<li>Infrastructure construction companies <a href="https://www.smartkarma.com/entities/china-railway-construction-corp-limited" target="_blank" data-smartkarma-citation="entities:263:1" rel="noopener">China Railway Cons Corp (1186 HK)</a>, <a href="https://www.smartkarma.com/entities/china-railway-group-ltd-h" target="_blank" data-smartkarma-citation="entities:264:1" rel="noopener">China Railway Group H (390 HK)</a>, and <a href="https://www.smartkarma.com/entities/china-communications-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:265:1" rel="noopener">China Comm Cons (1800 HK)</a> are also well-positioned to gain.</li>
</ul>


CSRC's Market Value Management Guidelines will indirectly benefit the H-share stocks with their A-share counterparts with a P/B of below 1x.  
Chinese banks dominated the list with below-book A-shares. China Everbright Bank (6818 HK), China Citic Bank H (998 HK), and ICBC (H) (1398 HK) are the prime beneficiaries.
Infrastructure construction companies China Railway Cons Corp (1186 HK), China Railway Group H (390 HK), and China Comm Cons (1800 HK) are also well-positioned to gain.


China & HK Strategy: Names to Watch for Market Value Management

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> signed a contract manufacturing agreement worth KRW1.7T ($1.2B) with an Asian pharmaceutical company. <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a> has announced KRW100B ($72M) share buyback, starting October 28.</li>
<li>
<a href="https://www.smartkarma.com/entities/astellas-pharma-inc" target="_blank" data-smartkarma-citation="entities:6091:1" rel="noopener">Astellas Pharma (4503 JP)</a> received FDA approval for Vyloy for gastric cancer. <a href="https://www.smartkarma.com/entities/shionogi-co-ltd" target="_blank" data-smartkarma-citation="entities:19535:1" rel="noopener">Shionogi &amp; Co (4507 JP)</a> received FDA Fast Track designation for its RSV drug candidate, S-337395.</li>
<li>
<a href="https://www.smartkarma.com/entities/zai-lab-ltd-94df40cf-c15e-462f-b3de-8d2d434ae935" target="_blank" data-smartkarma-citation="entities:36261:1" rel="noopener">Zai Lab (9688 HK)</a> announced positive topline data from global Phase 1a/1b study of ZL-1310 in small cell lung cancer. <a href="https://www.smartkarma.com/entities/legend-biotech-corp" target="_blank" data-smartkarma-citation="entities:28963:1" rel="noopener">Legend Biotech Corp (LEGN US)</a> sheds Genscript Biotech as its majority shareholder.</li>
</ul>



Samsung Biologics (207940 KS) signed a contract manufacturing agreement worth KRW1.7T ($1.2B) with an Asian pharmaceutical company. Celltrion Inc (068270 KS) has announced KRW100B ($72M) share buyback, starting October 28.

Astellas Pharma (4503 JP) received FDA approval for Vyloy for gastric cancer. Shionogi &amp; Co (4507 JP) received FDA Fast Track designation for its RSV drug candidate, S-337395.

Zai Lab (9688 HK) announced positive topline data from global Phase 1a/1b study of ZL-1310 in small cell lung cancer. Legend Biotech Corp (LEGN US) sheds Genscript Biotech as its majority shareholder.


APAC Healthcare Weekly (Oct 27)- Samsung Biologics, Celltrion, Astellas, Otsuka, Legend, and Zai Lab

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 HS HK-Listed Biotech Index ("Hang Seng Biotech Index") represents the 50 largest biotech companies listed in Hong Kong (HKEX).</li>
<li>In this insight, we take a look at the final rankings of potential ADDs/DELs and our capping flow expectations for the December 2024 index rebal event.</li>
<li>We expect two changes for the HSHKBIO index in December 2024. </li>
</ul>


The HS HK-Listed Biotech Index ("Hang Seng Biotech Index") represents the 50 largest biotech companies listed in Hong Kong (HKEX).
In this insight, we take a look at the final rankings of potential ADDs/DELs and our capping flow expectations for the December 2024 index rebal event.
We expect two changes for the HSHKBIO index in December 2024. 


Quiddity Leaderboard Hang Seng Biotech Dec 24: Two Changes Expected + Capping Flows

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 analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 113.3% as of Sep 13th.</li>
<li>The average A-H premium changed by 1.3ppt week-on-week, led by energy, utilities, industrials and offset by health care, consumer staples.</li>
<li>We highlight weekly changes in A-H premium for SINOPEC, China Coal Energy, PetroChina, GAC Group, Tigermed, CanSinoBIO, SMIC, Hua Hong Semi, Shanghai Pharma.</li>
</ul>


We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 113.3% as of Sep 13th.
The average A-H premium changed by 1.3ppt week-on-week, led by energy, utilities, industrials and offset by health care, consumer staples.
We highlight weekly changes in A-H premium for SINOPEC, China Coal Energy, PetroChina, GAC Group, Tigermed, CanSinoBIO, SMIC, Hua Hong Semi, Shanghai Pharma.


A-H Premium Weekly (Sep 13th): Sinopec, China Coal Energy, PetroChina, GAC, Tigermed

China

Shanghai Pharmaceuticals Holding Co., Ltd. manufactures, retails, and wholesales a variety of pharmaceuticals including biopharmaceuticals, chemical and Chinese traditional medicines, and healthcare products. The Company also invests in new medicine development and provides related services.

Shanghai Pharmaceuticals Holding (2607 HK)

Price Gauge
52-week Range	0.00 - 0.00
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Shanghai Pharmaceuticals Holding (2607 HK)

Shanghai Pharmaceuticals (2607.HK/601607.CH) - Profit Will Resume High Growth in 2024

In 2024, SH Pharma's net profit will resume high growth due to 2023 low base. Interim dividend will be added in 2024. SH Pharma is undervalued and...

Xinyao (Criss) Wang

China & HK Strategy: Names to Watch for Market Value Management

CSRC's Market Value Management Guidelines will benefit the H-share banks and infrastructure construction companies because their A-shares have P/B...

Osbert Tang, CFA

APAC Healthcare Weekly (Oct 27)- Samsung Biologics, Celltrion, Astellas, Otsuka, Legend, and Zai Lab

Samsung Biologics secures largest ever contract, Celltrion announced KRW100B buyback, Astellas Pharma got label expansion approval for Vyloy,...

Tina Banerjee

Quiddity Leaderboard Hang Seng Biotech Dec 24: Two Changes Expected + Capping Flows

Assuming the two index changes expected in this insight take place, there will be US$33mn capping flow which translates to a turnover of 2.8%. Five...

Janaghan Jeyakumar, CFA

A-H Premium Weekly (Sep 13th): Sinopec, China Coal Energy, PetroChina, GAC, Tigermed

We analyzed A-H premium changes in the past week and highlight A-H premium changes for SINOPEC, China Coal Energy, PetroChina, GAC Group, Tigermed,...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shanghai Pharmaceuticals (2607.HK/601607.CH) - Profit Will Resume High Growth in 2024

​In 2024, SH Pharma's net profit will resume high growth due to 2023 low base. Interim dividend will be added in 2024. SH Pharma is undervalued and...

Xinyao (Criss) Wang

China & HK Strategy: Names to Watch for Market Value Management

​CSRC's Market Value Management Guidelines will benefit the H-share banks and infrastructure construction companies because their A-shares have P/B...

Osbert Tang, CFA

APAC Healthcare Weekly (Oct 27)- Samsung Biologics, Celltrion, Astellas, Otsuka, Legend, and Zai Lab

Samsung Biologics secures largest ever contract, Celltrion announced KRW100B buyback, Astellas Pharma got label expansion approval for Vyloy,...

Tina Banerjee

Quiddity Leaderboard Hang Seng Biotech Dec 24: Two Changes Expected + Capping Flows

Assuming the two index changes expected in this insight take place, there will be US$33mn capping flow which translates to a turnover of 2.8%. Five...

Janaghan Jeyakumar, CFA

A-H Premium Weekly (Sep 13th): Sinopec, China Coal Energy, PetroChina, GAC, Tigermed

We analyzed A-H premium changes in the past week and highlight A-H premium changes for SINOPEC, China Coal Energy, PetroChina, GAC Group, Tigermed,...

Ke Yan, CFA, FRM

In 2024, SH Pharma's net profit will resume high growth due to 2023 low base. Interim dividend will be added in 2024. SH Pharma is undervalued and...

CSRC's Market Value Management Guidelines will benefit the H-share banks and infrastructure construction companies because their A-shares have P/B...