HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

China Shineway Pharmaceutical / Equity Bottom-Up

China Shineway Pharmaceutical (2877.HK) is the largest manufacturer of Chinese medicine injections, soft capsules, and granules in China.

<ul>
<li>Shineway’s 24Q1-Q3 performance is disappointing. So, we adjusted our forecast- 2024 Revenue could be about RMB3.7-4 billion, down 11-18% YoY. Net profit could reach about RMB1.05-1.1 billion, up 8-13% YoY.  </li>
<li>VBP is the biggest headwinds - Injection products/TCM formula granules/OTC medications all face VBP, which brings uncertainties to future performance. It’s uncertain whether the 2025 performance will rebound as expected.</li>
<li>Shineway seems to have lost growth momentum after COVID-19.Considering large cash balance, it doesn't make much sense to hold the Company long term if it doesn't significantly raise its dividend.</li>
</ul>


Shineway’s 24Q1-Q3 performance is disappointing. So, we adjusted our forecast- 2024 Revenue could be about RMB3.7-4 billion, down 11-18% YoY. Net profit could reach about RMB1.05-1.1 billion, up 8-13% YoY.  
VBP is the biggest headwinds - Injection products/TCM formula granules/OTC medications all face VBP, which brings uncertainties to future performance. It’s uncertain whether the 2025 performance will rebound as expected.
Shineway seems to have lost growth momentum after COVID-19.Considering large cash balance, it doesn't make much sense to hold the Company long term if it doesn't significantly raise its dividend.


China Shineway Pharmaceutical (2877 HK) - The Outlook Is Deteriorating

Equity Capital Markets

Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character toys.

<ul>
<li>The assembly character toy segment market size is not big and Bloks is already China’s largest player. So, there will be a day when the growth ceiling is reached.</li>
<li>Bloks’ business model is more similar to Pop Mart, rather than LEGO, but Bloks’ profitability is lagging behind both of them. The current high revenue growth may not be sustainable.</li>
<li>Pre-IPO valuation of Bloks reached RMB7.2 billion. Valuation of Bloks should be lower than Pop Mart. If Bloks’ valuation could reach the industry average after IPO, it is already good.</li>
</ul>


The assembly character toy segment market size is not big and Bloks is already China’s largest player. So, there will be a day when the growth ceiling is reached.
Bloks’ business model is more similar to Pop Mart, rather than LEGO, but Bloks’ profitability is lagging behind both of them. The current high revenue growth may not be sustainable.
Pre-IPO valuation of Bloks reached RMB7.2 billion. Valuation of Bloks should be lower than Pop Mart. If Bloks’ valuation could reach the industry average after IPO, it is already good.


Pre-IPO Bloks Group (PHIP Updates) - Some Points Worth the Attention

Qingdao Haier Biomedical  Lt / Equity Capital Markets

Qingdao Haier Biomedical Co., Ltd. designs, manufacture, and markets low temperature storage equipment for biomedical samples. The Company provides complete storage solutions for biological sample banks, blood safety, vaccine safety, medical supplies, and reagent safety as well. Qingdao Haier Biomedical

<ul>
<li>Haier Biomedical plans to merge with and absorb Shanghai RAAS through the issuance of shares, and both parties have signed a letter of intent for the potential merger.</li>
<li>Haier's acquisition of RAAS helps connect the software and hardware of the blood industry and strengthen the company's dominant position in the entire industry chain in the blood products industry.</li>
<li>The market value/financial performance of these two are far apart. If the acquisition is completed, it will help Haier improve financial performance, which is obviously more beneficial for Haier. </li>
</ul>


Haier Biomedical plans to merge with and absorb Shanghai RAAS through the issuance of shares, and both parties have signed a letter of intent for the potential merger.
Haier's acquisition of RAAS helps connect the software and hardware of the blood industry and strengthen the company's dominant position in the entire industry chain in the blood products industry.
The market value/financial performance of these two are far apart. If the acquisition is completed, it will help Haier improve financial performance, which is obviously more beneficial for Haier. 


China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

Duality Biotherapeutics / Equity Capital Markets

<ul>
<li>Founder Zhu Zhongyuan is a key figure in biotech landscape.So, when Duality first started its entrepreneurial financing, the process was smooth and the starting point of Duality was not low.</li>
<li>The R&amp;D progress of Duality’s pipelines is slower than competing candidates, so they would be in a passive position after market launch. So, Duality’s valuation would be lower than Kelun Bio.</li>
<li>Duality’s pipeline still has “good stories” to tell. There’s a chance its valuation could be higher than RemeGen, whose business model/investment logic have been falsified due to weak sales data.</li>
</ul>


Founder Zhu Zhongyuan is a key figure in biotech landscape.So, when Duality first started its entrepreneurial financing, the process was smooth and the starting point of Duality was not low.
The R&amp;D progress of Duality’s pipelines is slower than competing candidates, so they would be in a passive position after market launch. So, Duality’s valuation would be lower than Kelun Bio.
Duality’s pipeline still has “good stories” to tell. There’s a chance its valuation could be higher than RemeGen, whose business model/investment logic have been falsified due to weak sales data.


Pre-IPO Duality Biotherapeutics - Has the Potential to Surpass RemeGen

CanSino Biologics Inc. develops and manufactures biological vaccine products. The Company discovers quadrivalence meningococcal conjugate, pneumococcal polysaccharide, and adenovirus vector-based tuberculosis vaccines for human use. CanSino Biologics serves customers worldwide.

<ul>
<li>2024 is the year when CanSino achieves a fundamental reversal. Based on the current sales performance of meningococcal vaccines, 2024 full-year revenue is expected to reach about RMB840 million.</li>
<li>Under normal circumstances, PCV13i is expected to be approved in Q1-Q2 next year. If everything goes smoothly, PCV13i would be approved at the beginning of next year at the earliest.</li>
<li>Market value of RMB8-10 billion is reasonable range for CanSino. If a new virus causes a pandemic in the future, this will be a powerful catalyst for stock price.</li>
</ul>


2024 is the year when CanSino achieves a fundamental reversal. Based on the current sales performance of meningococcal vaccines, 2024 full-year revenue is expected to reach about RMB840 million.
Under normal circumstances, PCV13i is expected to be approved in Q1-Q2 next year. If everything goes smoothly, PCV13i would be approved at the beginning of next year at the earliest.
Market value of RMB8-10 billion is reasonable range for CanSino. If a new virus causes a pandemic in the future, this will be a powerful catalyst for stock price.


CanSino Biologics (6185.HK/688185.CH) - From 2025 Onwards, Cansino Will Bring Decent Returns

Over 15 years' experience in both finance and healthcare, covering clinic operations, investment and equity research in both China and overseas.

Xinyao (Criss) Wang
HK/China Healthcare Analyst (ex-Fosun Pharma)

China Shineway Pharmaceutical (2877 HK) - The Outlook Is Deteriorating

Due to Shineway's weak performance, we lowered forecast for 2024.Rebound in 2025 may fall short of expectation.VBP pose uncertainty for future...

Xinyao (Criss) Wang

Pre-IPO Bloks Group (PHIP Updates) - Some Points Worth the Attention

As China's largest assembly character toy player, Bloks faces growth ceiling/lagging profitability compared to peers. The key question is how to...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...

Xinyao (Criss) Wang

Pre-IPO Duality Biotherapeutics - Has the Potential to Surpass RemeGen

Founder Zhu Zhongyuan's role in biotech landscape helped Duality secure a high starting point, but slower R&D progress is a concern.Potential for...

Xinyao (Criss) Wang

CanSino Biologics (6185.HK/688185.CH) - From 2025 Onwards, Cansino Will Bring Decent Returns

CanSino's revenue expected to hit RMB840 million in 2024, with market value of RMB8-10 billion. Approval for PCV13i expected in early 2025. Future...

Xinyao (Criss) Wang

China Shineway Pharmaceutical (2877 HK) - The Outlook Is Deteriorating

Due to ​Shineway's weak performance, we lowered forecast for 2024.Rebound in 2025 may fall short of expectation.VBP pose uncertainty for future...

Xinyao (Criss) Wang

Pre-IPO Bloks Group (PHIP Updates) - Some Points Worth the Attention

As ​China's largest assembly character toy player, Bloks faces growth ceiling/lagging profitability compared to peers. The key question is how to...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

​Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...

Xinyao (Criss) Wang

Pre-IPO Duality Biotherapeutics - Has the Potential to Surpass RemeGen

​Founder Zhu Zhongyuan's role in biotech landscape helped Duality secure a high starting point, but slower R&D progress is a concern.Potential for...

Xinyao (Criss) Wang

CanSino Biologics (6185.HK/688185.CH) - From 2025 Onwards, Cansino Will Bring Decent Returns

​CanSino's revenue expected to hit RMB840 million in 2024, with market value of RMB8-10 billion. Approval for PCV13i expected in early 2025. Future...

Xinyao (Criss) Wang

Due to Shineway's weak performance, we lowered forecast for 2024.Rebound in 2025 may fall short of expectation.VBP pose uncertainty for future...

As China's largest assembly character toy player, Bloks faces growth ceiling/lagging profitability compared to peers. The key question is how to...

Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...

Founder Zhu Zhongyuan's role in biotech landscape helped Duality secure a high starting point, but slower R&D progress is a concern.Potential for...

CanSino's revenue expected to hit RMB840 million in 2024, with market value of RMB8-10 billion. Approval for PCV13i expected in early 2025. Future...