Daily Brief Equity Bottom-Up: China Healthcare Weekly (Jun.23) - National TCM VBP Results and more

In today’s briefing:

China Healthcare Weekly (Jun.23) – National TCM VBP Results, CDE Changes Game Rule, Hua Medicine
Intel Planing on Pulling A Samsung
Thonburi Healthcare Group (THG TB): Improving Core Operation and Future Expansion to Drive Growth

China Healthcare Weekly (Jun.23) – National TCM VBP Results, CDE Changes Game Rule, Hua Medicine

The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.
CDE will move closer to the FDA’s standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.
We analyzed some key points about Hua Medicine Ltd (2552 HK). We think its core drug Dorzagliatin still has many uncertainties that are worth investors’ attention.

By combining TMG+TD+IFS into a single reportable segment, all internal demand will move to this new entity, leapfrogging Intel to global #2 foundry by Q1’24 instead of by 2030
This new structure risks obfuscating the details of external foundry customer growth
A much simpler step by step approach which achieves all Intel’s stated goals while retaining visibility into IFS would be far more preferable from a shareholder perspective

Thonburi Healthcare Group (THG TB) recorded 23% YoY increase in non-COVID medical services revenue in 1Q23, mainly driven by higher pay per bed and utilization of inpatient division.
With the recovery in core healthcare services, THG expects its revenue to grow 10% YoY this year, accelerating from 6% revenue growth recorded in 2022.
In the next 3 years, THG plans to increase 195 outpatient rooms and 419 beds and is set to spend nearly THB5 billion on capex during 2023–2025.

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