Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

<p>US-listed Chinese vaccine manufacturer Sinovac Biotech (SVA:US) is the subject of a bidding was between two groups: SVA's Chairman in conjunction with SAIF (bidding US$6.18 cash/share) and a consortium led by PKU V-Ming and Shandong Sinobioway (bidding US$7 cash/share.) The process has unfolded quickly with the PKU bid surfacing within three days of the insiders' initial bid. Sinovac's appeal reflects the recent approval of its vaccine for Hand, Foot, Mouth Disease (HFMD): one of only two entering the China market now. We think the bidding could go significantly higher (US$10+) based on the prospects for this product. The entry of a multi-national drug company into the process is a potential wild card.  </p><p>The bidding war for Sinovac is similar to that of iKang Healthcare <a href="https://www.smartkarma.com/insights/if-they-don-t-answer-knock-harder" target="_blank" data-smartkarma-citation="insights:2267">If They Don’t Answer, KNOCK HARDER</a> where a low privatization bid by insiders who lacked control opened the door to a bidding war.</p>

US-listed Chinese vaccine manufacturer Sinovac Biotech (SVA:US) is the subject of a bidding was between two groups: SVA's Chairman in conjunction with SAIF (bidding US$6.18 cash/share) and a consortium led by PKU V-Ming and Shandong Sinobioway (bidding US$7 cash/share.) The process has unfolded quickly with the PKU bid surfacing within three days of the insiders' initial bid. Sinovac's appeal reflects the recent approval of its vaccine for Hand, Foot, Mouth Disease (HFMD): one of only two entering the China market now. We think the bidding could go significantly higher (US$10+) based on the prospects for this product. The entry of a multi-national drug company into the process is a potential wild card.  The bidding war for Sinovac is similar to that of iKang Healthcare If They Don’t Answer, KNOCK HARDER where a low privatization bid by insiders who lacked control opened the door to a bidding war.

Sinovac Biotech

Never Leave An Opening: Exhibit Two