HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

Tasly Pharmaceutical Group / Event-Driven

<ul>
<li>Based on the new announcement released by CR Sanjiu, due diligence, auditing, evaluation, valuation and verification of material assets reorganization are in progress. Approvals by the SASAC/SAMR haven’t been obtained.</li>
<li>Sanjiu is now facing performance headwinds due to VBP. So, Sanjiu needs new/stable performance increments to alleviate future performance pressure, and completing the acquisition of Tasly becomes even more urgent.</li>
<li>China Resources excels in M&amp;As and has strong internal business integration capabilities.We’re optimistic about the future synergies after the merger. Valuation for Tasly is expected to reach P/E of 30.</li>
</ul>


Based on the new announcement released by CR Sanjiu, due diligence, auditing, evaluation, valuation and verification of material assets reorganization are in progress. Approvals by the SASAC/SAMR haven’t been obtained.
Sanjiu is now facing performance headwinds due to VBP. So, Sanjiu needs new/stable performance increments to alleviate future performance pressure, and completing the acquisition of Tasly becomes even more urgent.
China Resources excels in M&amp;As and has strong internal business integration capabilities.We’re optimistic about the future synergies after the merger. Valuation for Tasly is expected to reach P/E of 30.


CR Sanjiu (000999CH) To Acquire Tasly (600535CH) Update- The Deal Is Proceeding in an Orderly Manner

<ul>
<li>Since Tasly's performance growth has long stagnated and Yan Kaijing has no better way to turn the situation around, selling Tasly to SOE and cashing out becomes a good choice.</li>
<li>Upon completion of all approvals (e.g. the SASAC, SAMR, shareholders' meeting of CR Sanjiu, etc.), the deal aims to be completed in 25Q1. We think the deal will get up.</li>
<li>Tasly’s share price should be at least higher than RMB14.85/share based on the cash transfer price. Its P/E would reach 30 in the future after the integration with CR Sanjiu.</li>
</ul>


Since Tasly's performance growth has long stagnated and Yan Kaijing has no better way to turn the situation around, selling Tasly to SOE and cashing out becomes a good choice.
Upon completion of all approvals (e.g. the SASAC, SAMR, shareholders' meeting of CR Sanjiu, etc.), the deal aims to be completed in 25Q1. We think the deal will get up.
Tasly’s share price should be at least higher than RMB14.85/share based on the cash transfer price. Its P/E would reach 30 in the future after the integration with CR Sanjiu.


CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update - This Is Already a Done Deal

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

Thematic (Sector/Industry)

<ul>
<li>We highlight 10 stocks in China that look interesting to us based on our FVMR Methodology</li>
<li>Portfolio changes: Three stocks remain, seven new join the fray</li>
<li>Since inception, it has gained 172% versus the CSI 300 Index’s return of 62%</li>
</ul>


We highlight 10 stocks in China that look interesting to us based on our FVMR Methodology
Portfolio changes: Three stocks remain, seven new join the fray
Since inception, it has gained 172% versus the CSI 300 Index’s return of 62%


China Resources Pharmaceutical / Event-Driven

<ul>
<li>The 10th national VBP officially begins. Enterprises involved in this VBP include <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (2196 HK)</a><a href="https://www.smartkarma.com/entities/shanghai-pharmaceuticals-holding" target="_blank" data-smartkarma-citation="entities:228:1" rel="noopener">Shanghai Pharmaceuticals (2607 HK), </a><a href="https://www.smartkarma.com/entities/sichuan-kelun-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:3625:1" rel="noopener">Sichuan Kelun Pharmaceutical (002422 CH), </a><a href="https://www.smartkarma.com/entities/cspc-pharmaceutical-group-ltd" target="_blank" data-smartkarma-citation="entities:229:1" rel="noopener">CSPC (1093 HK)</a>, etc..</li>
<li>We analyzed Chinese Biotech companies’ P/S range based on different product revenue growth. Due to low profitability, there is “a valuation discount” if they are included in global valuation system.</li>
<li>KPC has agreed to acquire 51% interest in CR Shenghuo from CR Sanjiu. Due to good performance, we are full of expectations for the future acquisition/integration within China Resources.</li>
</ul>


The 10th national VBP officially begins. Enterprises involved in this VBP include Shanghai Fosun Pharmaceutical (2196 HK)Shanghai Pharmaceuticals (2607 HK), Sichuan Kelun Pharmaceutical (002422 CH), CSPC (1093 HK), etc..
We analyzed Chinese Biotech companies’ P/S range based on different product revenue growth. Due to low profitability, there is “a valuation discount” if they are included in global valuation system.
KPC has agreed to acquire 51% interest in CR Shenghuo from CR Sanjiu. Due to good performance, we are full of expectations for the future acquisition/integration within China Resources.


China Healthcare Weekly (Nov.24) - 10th VBP, Biotech Valuation Logic, China Resources Reorganization

China Traditional Chinese Medicine / Event-Driven

<ul>
<li>Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance. </li>
<li>Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was "inappropriate".</li>
<li>If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.</li>
</ul>


Investors are concerned the Long Stop Date may be extended.But the style of SOEs is rigorous, which means CNPGC has anticipated the potential delays and reserved more time in advance. 
Although CNPGC can extend Long Stop Date, this indicates CNPGC fails to complete the set work in scheduled time, which is equivalent to admitting its previous work arrangement was "inappropriate".
If there’re unexpected circumstances, one possible scenario is privatization would be completed before the Chinese New Year.Because entering 2025, integrating China TCM and Taiji will be the focus of CNPGC.


China TCM (570.HK) Privatization Update - The Long Stop Date to Extend or Not?

China

Tasly Pharmaceutical Group Co.,Ltd. manufactures drug products. The Company develops and sells traditional Chinese medicine, biological medicine, chemical medicine, and other related products. Tasly Pharmaceutical Group markets its products throughout China.

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Tasly Pharmaceutical Group (600535 CH)

CR Sanjiu (000999CH) To Acquire Tasly (600535CH) Update- The Deal Is Proceeding in an Orderly Manner

The deal is proceeding in an orderly manner. Facing performance headwinds, CR Sanjiu urgently need new performance increments.We’re optimistic...

Xinyao (Criss) Wang

CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update - This Is Already a Done Deal

Tasly's stagnant growth prompts Yan Kaijing to sell it to SOE.This is a done deal, which aims to be completed in 25Q1. Tasly's valuation is...

Xinyao (Criss) Wang

The Stocks to Own in China – Vol. 34

We highlight 10 China A stocks that look interesting to us based on our FVMR Methodology. Portfolio changes: Three stocks remain, seven new join...

A. Stotz Investment Research

China Healthcare Weekly (Nov.24) - 10th VBP, Biotech Valuation Logic, China Resources Reorganization

The 10th national VBP kicks off. Chinese Biotech face valuation discount when included in global valuation system. China Resources is undergoing...

Xinyao (Criss) Wang

China TCM (570.HK) Privatization Update - The Long Stop Date to Extend or Not?

The announcement is “annoying” as “It remains uncertain whether such consent from the Investor Group will be obtained”.The risk is since it's not...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CR Sanjiu (000999CH) To Acquire Tasly (600535CH) Update- The Deal Is Proceeding in an Orderly Manner

The deal is proceeding in an orderly manner. Facing performance headwinds, CR Sanjiu urgently need new performance increments.We’re optimistic...

Xinyao (Criss) Wang

CR Sanjiu (000999.CH) To Acquire Tasly (600535.CH) Update - This Is Already a Done Deal

​Tasly's stagnant growth prompts Yan Kaijing to sell it to SOE.This is a done deal, which aims to be completed in 25Q1. Tasly's valuation is...

Xinyao (Criss) Wang

The Stocks to Own in China – Vol. 34

We highlight 10 China A stocks that look interesting to us based on our FVMR Methodology. Portfolio changes: Three stocks remain, seven new join...

A. Stotz Investment Research

China Healthcare Weekly (Nov.24) - 10th VBP, Biotech Valuation Logic, China Resources Reorganization

The 10th national VBP kicks off. Chinese Biotech face valuation discount when included in global valuation system. China Resources is undergoing...

Xinyao (Criss) Wang

China TCM (570.HK) Privatization Update - The Long Stop Date to Extend or Not?

The announcement is “annoying” as “It remains uncertain whether such consent from the Investor Group will be obtained”.The risk is since it's not...

Xinyao (Criss) Wang

Tasly's stagnant growth prompts Yan Kaijing to sell it to SOE.This is a done deal, which aims to be completed in 25Q1. Tasly's valuation is...