Daily Brief China: Perfect Medical Health, Pinduoduo, 3D Medicines, Agile Property Holdings, Indika Energy and more

• Perfect Medical Health (1830 HK) showed a resilient set of numbers for H1 2023, with profits down only 30% despite losing a month in HK and more in China.
• With over 700 mn HKD in cash (18% of market capitalization), PE of 12.4x FY23e/8.5x FY24e, and dividend yields of 8.5%FY23e/12.4%FY24e it trades on an exciting yield/valuation.
• Catalysts for the company include the reopening of China (>20% of revenue), the recovery of HK(70% of revenue), and expansion into newer business lines and geographies.

• PDD’s spectacular 3Q results will prove unsustainable based on our assessments of its core markets and deep-dive benchmark analysis of growth trajectory of PDD and Alibaba, using GMV as scale.
• We see earnings risk going into 2023 due to well-penetrated wallet share of core user base, deflating growth drivers and ramp-up of investments.
• In the long term, inevitable multiple compression also renders the risk-return payoff of this US$100bn company mediocre, even under blue-sky growth forecasts. Prefer Alibaba over PDD.

• The NRDL negotiation has completely changed the pricing method and valuation logic of innovative drugs. Based on the 3D Alphamab Simcere Agreements, 3D Medicines would have limited profits from envafolimab.
• The majority candidates are based on license-in model. The intention to “pile up” a nice pipeline based on license-in model before IPO is obvious. 3D Medicines’s R&D capability is questionable.
• The overall quality and core competitiveness of 3D Medicines are not high. Mr. Market is not friendly to the valuation of companies based on license-in model. 

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Medco Energi
2. China Jinmao Holdings
3. Guangzhou R&F Properties
4. Sunac China Holdings
5. Evergrande

and more…

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Medco Energi
2. China Jinmao Holdings
3. Guangzhou R&F Properties
4. Sunac China Holdings
5. Evergrande

and more…