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
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.
Shanghai Pharmaceuticals Holding (601607.CH/2607.HK) – The Situation of Undervaluation Would Change
- 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.
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