HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The driving force for the big performance growth of domestic culture medium companies mainly come from the logic of import substitution. We think there are investment opportunities in this industry.</li>
<li>Due to soaring costs of electricity prices, raw material prices and transportation costs, European pharmaceutical plants are facing difficulties in sustaining production. Chinese API enterprises could face expansion opportunities.</li>
<li>For industries that have been recognized by investors,the market begins to think in terms of long logic from a broader perspective rather than simply tracking the performance of individual companies.</li>
</ul>


The driving force for the big performance growth of domestic culture medium companies mainly come from the logic of import substitution. We think there are investment opportunities in this industry.
Due to soaring costs of electricity prices, raw material prices and transportation costs, European pharmaceutical plants are facing difficulties in sustaining production. Chinese API enterprises could face expansion opportunities.
For industries that have been recognized by investors,the market begins to think in terms of long logic from a broader perspective rather than simply tracking the performance of individual companies.


China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

<ul>
<li>Ukraine "miraculously" turned the tide of war, making Russia to consider whether they’re facing Ukraine or the Pentagon/NATO? There could be "entry of new members". The balance could tilt again.</li>
<li>The Russia-Ukraine war is also a cruel world economic war. We analyzed the impact on healthcare industry (both opportunities and challenges).</li>
<li>Overall, the first episode of the Russia-Ukraine war has ended and entered a serious new phase. The game between the US and Russia would last for a long time.</li>
</ul>


Ukraine "miraculously" turned the tide of war, making Russia to consider whether they’re facing Ukraine or the Pentagon/NATO? There could be "entry of new members". The balance could tilt again.
The Russia-Ukraine war is also a cruel world economic war. We analyzed the impact on healthcare industry (both opportunities and challenges).
Overall, the first episode of the Russia-Ukraine war has ended and entered a serious new phase. The game between the US and Russia would last for a long time.


Russia-Ukraine War Episode 2 - The Balance Could Tilt Again and Its Impact on Healthcare Industry

<ul>
<li>It is estimated that a large number of biotech companies will be liquidated or willing to be acquired at low prices starting from the second half of 2023.</li>
<li>If strictly speaking, the so-called import substitution is not really good logic, but investors need to know "when to participate in this story" and "when to exit".</li>
<li>Economic downturn would lead to consumption downgrade. We suggest that investors temporarily avoid medical companies with consumption attributes, since we have concerns on their performance.</li>
</ul>


It is estimated that a large number of biotech companies will be liquidated or willing to be acquired at low prices starting from the second half of 2023.
If strictly speaking, the so-called import substitution is not really good logic, but investors need to know "when to participate in this story" and "when to exit".
Economic downturn would lead to consumption downgrade. We suggest that investors temporarily avoid medical companies with consumption attributes, since we have concerns on their performance.


China Healthcare Weekly (Oct.7)- Biotech Accept Reality, Import Substitution Logic, Consumer Medical

Equity Bottom-Up

Beijing Tongrentang Co A / Equity Bottom-Up

<ul>
<li>2018 was a watershed for Tongrentang. After the incident of using expired honey was exposed and the corruption scandal afterwards, Tongrentang's performance declined significantly and didn’t recover until 2021.</li>
<li>Angong Niuhuang Pill is the major performance driver and also Tongrentang’s core product. Due to the economic downturn, the price increase of Angong Niuhuang Pills could lead to inventory overstocking.</li>
<li>The high growth in 2021 may not be sustained. We lowered our forecast for 2022. Without core competitiveness and high moat, we are conservative about Tongrentang’s long-term outlook.</li>
</ul>


2018 was a watershed for Tongrentang. After the incident of using expired honey was exposed and the corruption scandal afterwards, Tongrentang's performance declined significantly and didn’t recover until 2021.
Angong Niuhuang Pill is the major performance driver and also Tongrentang’s core product. Due to the economic downturn, the price increase of Angong Niuhuang Pills could lead to inventory overstocking.
The high growth in 2021 may not be sustained. We lowered our forecast for 2022. Without core competitiveness and high moat, we are conservative about Tongrentang’s long-term outlook.


Beijing Tongrentang (600085.CH)- Neither Brand Nor Angong Niuhuang Pills Can Secure Future Prospects

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. / Equity Bottom-Up

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd.

<ul>
<li>Due to the lockdown/pandemic, <a href="https://www.smartkarma.com/entities/zhangzhou-pientzehuang-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:15709:1" rel="noopener">Pientzehuang Pharmaceutical</a>’s 2022H1 performance slowed down. Considering the economic downturn and people's cutting back spending on non-rigid consumption, the full-year revenue growth could be around 10%-20%.</li>
<li>The Company's key challenge lies in revenue growth. However, it is not easy to increase sales largely due to the scarcity of raw materials, which limits the expansion of production.</li>
<li>Pien Tze Huang is overvalued. Share price could continue to fall,but it will bounce back due to its high moat. 2022 is a good time for bottom fishing this stock.</li>
</ul>


Due to the lockdown/pandemic, Pientzehuang Pharmaceutical’s 2022H1 performance slowed down. Considering the economic downturn and people's cutting back spending on non-rigid consumption, the full-year revenue growth could be around 10%-20%.
The Company's key challenge lies in revenue growth. However, it is not easy to increase sales largely due to the scarcity of raw materials, which limits the expansion of production.
Pien Tze Huang is overvalued. Share price could continue to fall,but it will bounce back due to its high moat. 2022 is a good time for bottom fishing this stock.


Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back

China

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. manufactures and markets Chinese traditional medicines, including Pientzehuang, Pientzehuang capsules, Pientzehuang lozenge, cough syrup, and other related products.

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)

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Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)

China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

Culture medium will have a rapid growth period. Due to high costs, EU Pharma face difficulty in sustaining production.Mr Market begins to think...

Xinyao (Criss) Wang

Russia-Ukraine War Episode 2 - The Balance Could Tilt Again and Its Impact on Healthcare Industry

The first episode of Russia-Ukraine war has ended and entered a new phase.As it becomes "small world war",the balance may tilt again. It's also a...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.7)- Biotech Accept Reality, Import Substitution Logic, Consumer Medical

Although unwilling, biotech will face the harshest truth in 2023; Import substitution isn't good logic. Investors should know "when to join" &...

Xinyao (Criss) Wang

Beijing Tongrentang (600085.CH)- Neither Brand Nor Angong Niuhuang Pills Can Secure Future Prospects

Angong Niuhuang Pill is the major performance driver. Due to economic downturn, its price hike will lead to inventory overstocking. Without high...

Xinyao (Criss) Wang

Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back

Pien Tze Huang's performance slows down this year. Shares could continue to fall due to overvaluation, but will bounce back due to its high moat....

Xinyao (Criss) Wang

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52-week Range

Market Cap (USDm)

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