Global Healthcare Analyst

Tina Banerjee

Thematic (Sector/Industry)

<ul>
<li>As we are heading into 2023, let us look back on the performance of some of our global healthcare stocks recommended throughout 2022.</li>
<li>Four stocks on which I am bullish, generated more than 50% return since their recommendations. 10 stocks on which I am bearish plunged more than 20%.</li>
<li>For 2023, investors should continue to focus on established healthcare companies, having strong and flexible balance sheet with muti-year revenue visibility.</li>
</ul>


As we are heading into 2023, let us look back on the performance of some of our global healthcare stocks recommended throughout 2022.
Four stocks on which I am bullish, generated more than 50% return since their recommendations. 10 stocks on which I am bearish plunged more than 20%.
For 2023, investors should continue to focus on established healthcare companies, having strong and flexible balance sheet with muti-year revenue visibility.


2022 in Rear Mirror View: Top Performers From My Global Healthcare Coverage Universe

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 the weekly Hong Kong Connect flows with our data engine for holding position as of December 9th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight inflows into HKEx, Ping An H&amp;T, and outflows from Tencent, Xiaomi, Li Ning, Meituan, Country Garden Service.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 9th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight inflows into HKEx, Ping An H&amp;T, and outflows from Tencent, Xiaomi, Li Ning, Meituan, Country Garden Service.


Hong Kong Connect Flows (Dec 9th): HKEx, Ping An H&T, Tencent, Xiaomi, Li Ning, Meituan

Equity Bottom-Up

Yichang HEC Changjiang Pharma / Equity Bottom-Up

<ul>
<li>During H1 2022, <a href="https://www.smartkarma.com/entities/yichang-hec-changjiang-pharmaceutical" target="_blank" data-smartkarma-citation="entities:21040:1" rel="noopener">Yichang HEC Changjiang Pharma (1558 HK)</a> recorded revenue of RMB1.3 billion, representing 540% y/y growth, driven by 1,776% y/y revenue growth from its core product Kewei.</li>
<li>With gradual recovery of patient traffic in medical institutions and increasing number of flu cases, Kewei showed a trend of recovery in its sales volume leveraging on its market leadership.</li>
<li>HEC Pharma has a comprehensive insulin portfolio, which covers both second and third generations of insulin. With 116 million diabetes patients, China has significant market opportunity for insulin.</li>
</ul>


During H1 2022, Yichang HEC Changjiang Pharma (1558 HK) recorded revenue of RMB1.3 billion, representing 540% y/y growth, driven by 1,776% y/y revenue growth from its core product Kewei.
With gradual recovery of patient traffic in medical institutions and increasing number of flu cases, Kewei showed a trend of recovery in its sales volume leveraging on its market leadership.
HEC Pharma has a comprehensive insulin portfolio, which covers both second and third generations of insulin. With 116 million diabetes patients, China has significant market opportunity for insulin.


HEC Pharma (1558 HK): Core Product Saw Volume Recovery in 1H 2022; New Launches to Accelerate Growth

<ul>
<li>HEC Pharma (1558 HK) launched multiple new products, which will reduce its over-dependence on a single drug. Among those, insulin and oral HCV drug have large market opportunities in China.</li>
<li>As of 30 June 2021, 11 products of the company have won the bid for centralized bulk purchase of drugs, including six products have won the bid in H1 2021.</li>
<li>HEC’s rich pipeline consists of 50 innovative class 1 drugs, targeting fast-growing therapeutic areas including oncology. Its late-stage pipeline will enable robust product launches in 2022 and beyond.</li>
</ul>


HEC Pharma (1558 HK) launched multiple new products, which will reduce its over-dependence on a single drug. Among those, insulin and oral HCV drug have large market opportunities in China.
As of 30 June 2021, 11 products of the company have won the bid for centralized bulk purchase of drugs, including six products have won the bid in H1 2021.
HEC’s rich pipeline consists of 50 innovative class 1 drugs, targeting fast-growing therapeutic areas including oncology. Its late-stage pipeline will enable robust product launches in 2022 and beyond.


Yichang HEC Changjiang Pharma (1558 HK): Multiple New Products Launches Bring New Opportunities

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Huarong Asset Management / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-huarong-asset-management" target="_blank" data-smartkarma-citation="entities:968:1" rel="noopener">China Huarong Asset Management (2799 HK)</a>, which is expected to be in contravention of Hong Kong's public float, is contemplating the "full circulation" of some domestic shares. </li>
<li>If implemented, the conversion of these domestic shares would be largely ceremonial.</li>
<li>To date, 28 companies have sought approval to convert their domestic shares and/or unlisted foreign shares into H shares on the Hong Kong exchange. </li>
</ul>



China Huarong Asset Management (2799 HK), which is expected to be in contravention of Hong Kong's public float, is contemplating the "full circulation" of some domestic shares. 
If implemented, the conversion of these domestic shares would be largely ceremonial.
To date, 28 companies have sought approval to convert their domestic shares and/or unlisted foreign shares into H shares on the Hong Kong exchange. 


China Huarong (2799 HK)'s Full Circulation

Hong Kong

Beijing Tong Ren Tang Chinese Medicine Co. Ltd. is a Chinese medicine manufacturer. The Company mainly develops and produces health products, including patent medicines and health-care products.

Beijing Tong Ren Tang Chinese Medicine (3613 HK)

SSY Group Limited researches, develops, manufactures, and sells a wide range of pharmaceutical products.  The Company sells non PVC soft bags, PP plastic bottles, and glass bottle infusions.

The United Laboratories International Holdings Limited produces and distributes pharmaceutical products. The Company's products include finished products, APIs, intermediates, and capsules.

The United Laboratories International Holdings Limited (3933 HK)

The United Laboratories International Holdings Limited

Dawnrays Pharmaceutical (Holdings) Limited, through its subsidiaries, develops, manufactures, and sells non-patented chemical medicines including cephalosporins in sterile bulk medicine and powder for injection forms, their intermediate pharmaceuticals and system specific medicines.  The Group produces a series of cephalosporins with various therapeutic uses.

Dawnrays Pharmaceutical (Holdings) (2348 HK)

Jacobson Pharma Corporation Limited manufactures pharmaceuticals. The Company researches, produces, and sells a variety of generic and proprietary Chinese medicines around the world.

Pak Fah Yeow International Limited, through its subsidiaries, manufactures and sells healthcare and household products under the Hoe Hin brand.  The Company also invests in properties and treasuries.

Tianda Pharmaceuticals Ltd is involved in research, development, production, and sales of pharmaceutical and health supplement products.

Lee's Pharmaceutical Holdings Limited develops, manufactures and sells quality biopharmaceutical products that focus on combating cardiovascular diseases and viral sexually transmitted diseases.

Wai Yuen Tong Medicine Holdings Limited, through its subsidiaries, manufactures and sells Chinese and western pharmaceutical products.

Regencell Bioscience Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on research, development, and commercialization of traditional medicine for the treatment of neurocognitive disorders and degeneration. Regencell Bioscience Holdings serves customers worldwide.

Strides Pharma Science Limited operates as a pharmaceutical company. The Company provides research and development of biotherapeutic drugs and devices including biosimilars, biobetters, novel formulations, and drug loaded devices.

Sosei Group Corporation is a holding company which was established through reorganization.  The Group companies are biopharmaceutical companies specializing in drug development.  Sosei Group enters into license agreements primarily with US, EU, and Japanese companies to market the licensed drugs in Japan and find alternative usage on such drugs.

Sumitomo Dainippon Pharma Co., Ltd. mainly manufactures and markets pharmaceuticals for human and veterinary use. The Company also produces and sells livestock feeds, food additives, and chemical products, as well as conducts clinical pathology tests for animals. Sumitomo Dainippon Pharma conducts businesses across worldwide.

Jianmin Pharmaceutical Group Co., Ltd. develops and manufactures Chinese traditi onal medicines. The Company's main products are pediatric medicines.

Collegium Pharmaceutical Inc. offers pharmaceutical products. The Company develops and commercializes prescription and over-the-counter pharmaceuticals for the treatment of central nervous system, respiratory, and skin related disorders.

Daewoong Pharmaceutical Co., Ltd. develops various kinds of medical drugs and vitamin supplements.  The Company's medical drugs are used in areas, such as cardiology, dermatology, anti-biotic, and many other medical areas.  Dae Woong's over-the-counter products include smoking deterrents, vitamins, and minerals.

Shandong Shanda WIT Science & Technology Co Ltd develops the Shandong University National University Technology Zone, manufactures chlorine dioxide generators, telecommunication network systems, industrial automatic control systems, as well as develops computer software.  The Company also produces medical products.

Shandong Shanda Wit Scienc & Tech (000915 CH)

Innoviva, Inc. is a healthcare focused asset management company. The Company intends to participate in the development, commercialization and financial management of bio-pharmaceuticals. Innoviva operates in the United States.

Xiamen Kingdomway Group Co produces and sells fortified food and feed additives. The Company's major products include Coenzyme A10, VA, VD3, microalgae DHA, vegitable ARA.

Marksans Pharma Limited manufactures active ingredients that are used to produce finished drugs.

YiChang HEC ChangJiang Pharmaceutical Co Ltd develops a variety of drugs.  The Company develops and sells drugs for anti-virus, metabolic diseases, cardiovascular, and more.

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Yichang HEC Changjiang Pharma (1558 HK)

2022 in Rear Mirror View: Top Performers From My Global Healthcare Coverage Universe

From my coverage universe, two Taiwanese stocks generated 59% and 71% returns in nearly six months. New product launch and geography expansion are...

Tina Banerjee

Hong Kong Connect Flows (Dec 9th): HKEx, Ping An H&T, Tencent, Xiaomi, Li Ning, Meituan

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for HKEx, Ping An H&T, Tencent, Xiaomi, Li Ning, Meituan,...

Ke Yan, CFA, FRM

HEC Pharma (1558 HK): Core Product Saw Volume Recovery in 1H 2022; New Launches to Accelerate Growth

HEC Pharma’s revenue jumped ~6x in 1H22, driven by volume recovery of its core drug Kewei. Going ahead, new generic launches and insulin portfolio...

Tina Banerjee