Daily Brief Equity Bottom-Up: China Healthcare Weekly (Jun.2) - New Era for Medical Device and more

In today’s briefing:

China Healthcare Weekly (Jun.2) – New Era for Medical Device, Shareholders’ Reduction in CXO, Cstone
Shanghai Pharmaceuticals Holding (601607.CH/2607.HK) – The Situation of Undervaluation Would Change
Beyond Student Loans

China Healthcare Weekly (Jun.2) – New Era for Medical Device, Shareholders’ Reduction in CXO, Cstone

In the second half of this year, innovative device companies could be listed on the SSE STAR Market one after another, which is a systematic opportunity.
Shareholders’ reduction in CXO will continue. Then, CXO could become a company mainly controlled by various funds, with the original owners all cashing out and leaving, such as WuXi AppTec.
We analyzed some key points of CStone Pharmaceuticals (2616 HK). We remain conservative about the Company, and its stock price may continue to remain weak.

Different from peers whose pharmaceutical assets are scattered in different listed companies, all assets/resources of SH Pharma are integrated within the Company. The intrinsic value of this model is greater.
SH Pharma is in a traditional industry, facing weak profitability and negative policy impacts, Thus, the Company lacks attractiveness and imagination space for investors, leading to long-term undervaluation.
Considering the transformation to more high-margin businesses, SH Pharma’s performance/profitability would improve. Since China hopes to establish a valuation system with Chinese characteristics, there’s valuation repair opportunity for SH Pharma.

With the inception of the pandemic, borrowers have largely been wrestling with financial distress, compelling fintech companies like SoFi technologies, which banks on student loan financing, to largely reimagine their business model.
SoFi has moved away from its core business over the past three years, instead casting a wider net, extending its services to include diverse financial products, personal loans, and its banking-as-a-service business targeting enterprise customers.
In 2023, SoFi has had to grapple with mounting external pressures emanating from a slowing economy.

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