In today’s briefing:
- What’s Still Concerning in the HLB Situation & HLB Life Science’s Stock Rights Trading Next Week
- Shanghai Henlius Biotech (2696.HK) – Behind the Trading Halt and Privatization Rumor
- China Healthcare Weekly (May.26)-VBP Scope Expands, Optimistic About Glove Industry, China Resources
- Jiangxi Rimag IPO: FCF Generation and Margin Expansion. Expect ~30 New Imaging Centers By 2026
What’s Still Concerning in the HLB Situation & HLB Life Science’s Stock Rights Trading Next Week
- HLB expects Jiangsu Hengrui to receive another CRL from the FDA, but specifics on CMC issues remain unclear. Due to the lack of clarity, it’s advisable to avoid trading HLB.
- HLB IR stated they’ll apply for KOSPI transfer listing after FDA approval when asked by local media, suggesting it’s currently not under consideration.
- We should instead consider short-term trading opportunities in HLB Life Science. Anticipate a surge in forfeited shares from Day 1, reminiscent of last year’s CJ CGV rights offer event.
Shanghai Henlius Biotech (2696.HK) – Behind the Trading Halt and Privatization Rumor
- There are many rumors about Henlius’s trading halt, but Fosun Pharma had applied for the resumption of trading in H Shares, which makes us confused whether this is really privatization.
- Henlius is in “an awkward position” in capital market. Fosun is to blame for Henlius’s low valuation. The high debt problem makes the profits generated from drug sales meaningless.
- If Henlius cannot break away from the system controlled by Fosun, the complexity of corporate governance brought about by the relationship between Henlius and Fosun would inevitably affect investment judgment.
China Healthcare Weekly (May.26)-VBP Scope Expands, Optimistic About Glove Industry, China Resources
- The NHSA issued a Notice on “improving the quality and expanding the scope of VBP”. The trend of full coverage of VBP of conventional drugs/consumables is determined.TCM is under pressure.
- We analyzed the potential demand growth rate of the glove industry, which is already better than most cyclical stocks. Therefore, we see no need to remain pessimistic about this industry.
- Holding platform companies have valuation discounts.HK$50-60 billion is reasonable market value for China Resources Pharmaceutical.Better to go long when share price is below HK$5 and then hold to receive dividends.
Jiangxi Rimag IPO: FCF Generation and Margin Expansion. Expect ~30 New Imaging Centers By 2026
- Jiangxi Rimag Group, China’s largest medical group with focus on medical imaging services, updated its PHIP and may enter the public market in June.
- Terms of an IPO have not yet been set. The expected price range and the size of the offering were not disclosed in the company’s filings.
- I’m positive on Jiangxi Rimag Group given the fast-growing TAM: third-party medical imaging center market accounts only for ~1% of the PRC medical imaging service market today.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
