Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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Kind of ironic that US/China are constantly falling out when China owns almost a trillion (868.9 billion) of US debt.
https://www.statista.com/statistics/246420/major-foreign-holders-of-us-treasury-debt/#:~:text=Foreign%20holders%20of%20United%20States%20treasury%20debt&text=Of%20the%20total%207.6%20trillion,U.S.%20dollars%20in%20U.S.%20securities.
China has started to sell its massive US holding of treasury debt, it could be some of this cash is used to shore up markets back home.
Separately Chinese funds have been encouraged to buy their own mutual stock
Buyback wave set to lift market tide, sentiment
By SHI JING in Shanghai | CHINA DAILY | Updated: 2023-08-23 08:55
https://www.chinadaily.com.cn/a/202308/23/WS64e5517ea31035260b81dad9.html
Various commentary on Bloomberg TV & Radio over the past few days about U.S. Funds winding down their positions in Chinese equities - a trend that is set to continue according to various Equity Analysts and commentators
There's one or two more on here including Slater from last year which davey may have mentioned.
https://www.barrons.com/market-data/stocks/hcm?mod=searchresults_companyquotes&mod=searchbar
From the data we have available most major holders have increased or reduced their short positions against long positions.
SCHRODER INVESTMENT MANAGEMENT GROUP now hold the equivalent of 23m shares, Goldman have purchased some but this could be part of market making, M & G have reduced their short as previously mentioned.
UNISUPER MANAGEMENT PTY LTD is a new entry with 569k of ADR's
_______________________________________________________________________________
"Heeding calls from authorities to bolster the market, China’s largest mutual fund houses promised to buy their own equity-focused products. Meanwhile, state television CCTV said investors should be vigilant against commentary that dents confidence and disrupts market order."
https://finance.yahoo.com/news/top-china-hedge-fund-blames-183801339.html
Very low volume these days, possibly underlying the fact US Investors are generally pulling out of anything related to China
Good, but nobody does care...its intersting. I remember when they presented the Frutiga study on gastric cancer (where they have missed 1 endpoint) the stock was up heavily..
The ESLIM-01 trial reports are said to be successful with the detailed results and NDA to appear later in the year.
The target addressable market appears to be around 45k pts in China (39% of ITP pts) that currently replace over a 3 year cycle…..it seems to me that we will have to wait for experience data in 5 yrs to see if there is an impact on overall patient survival. One really important element to adoption is that there was a very short observed response rate (with a couple of weeks) so clinicians can quickly try it out on their candidate patients and discontinue if there is limited response……no expensive bio marker testing, just try it and do a blood platelet count after a month. I suspect this can drive higher adoption rates.
There are about 50% by volume of similar patients in other major markets (US / Europe and Japan). Globally China 40%, Major markets 20% RoW 40%.
The development pathway will be a good test for their new strategy….will they be able to find a partner to do the global MRCT if they want to take this ex-China….the HY presentation implied they would be setting up trial work in the US….maybe they have to do that and gain FDA agreement (perhaps BTD) to start before they hand over to a partner…
SP currently flat in HK in a down market….unsurprising, it is only NDAs and cash that seem to get the market excited….best case scenario for Sovlep is high impact data presented, Chinese accelerated approval mid 2024, US trial starts early 2024 with a partner on board for global development….
I agree 1pencil, and a very clear path now to profitability. Clearly the market ignores the DCF calculations these days and want to see hard cash and Free Cashflow, nothing less will do. Let's hope the Nov 30th PDUFA bears fruit otherwise we will no doubt get hammered again!
Hutchmed is de-risked in terms of cashflow giving rise to a sustainable and profitable business, its also ripe for corporate activity and consolidation within the sector .
These two actuators are the main reasons for taking an overweight position in Hutchmed.
It looks as if the Fed has paused, predictions seem to be they may do one or two more 25 basis points and that will probably be enough as all the recent hikes are only just starting to take effect. Similar story for the ECB although the hapless BoE may need to keep going. It's interesting they all hiked far too late and seemed to be asleep at the wheel. The general consensus amongst economists is rates will stay higher for longer before gradually reducing in 2024-25. Meanwhile China's economy is in the doldrums and the Govt there appears to have little appetite for big stimulus - the biggest issue appears to be real estate with Evergrande going Chapter 11 and Country Garden looking a bit dodgy.
Comparing Hutchmed with peers, even the unprofitable ones, it seems under-valued which is why I will hold but I am not sure if I will add any more until I see signs the market wants to attribute some sensible valuation to it.
I think Hutchmed is in the same boat with many other biotech shares at the moment. There are tons of undervalued plays at the moment, just look at Lion trust the trust of trusts as it were, many investment funds held positions in Lion given its high standing.
If you choose a market maker driven stock you can at least avoid much of the daily swings which tend to upset investors , that said these can be a few and far between as I have spent 6-8 weeks looking myself, failing that I will probably buy more Hutchmed next week on any weakness.
We really need interest rates to start going down, not quite there yet though.
Thanks 1pencil, my main frustration here is the market valued the company at $6bn when it had one drug marketed in China, much smaller revs and a far less advanced pipeline but now chooses a completely different way to value it compared to other loss making peers like Innovent and Beigene and I cannot establish why that is the case. It can't be purely down to geo-politics, HFCAA etc ....
Davey, my reading of the situation is you are happy with Hutchmeds progress but disappointed at the share price performance. That's understandable and frustrating to effectively pick a 'winner' but not have this reflected in your portfolio.
HCM has gone from low beta to high beta during the last 18 months, perhaps look at low beta stocks which are not traded via SETS, this will remove a lot of the volatility with focus being more on what the company is actually doing - as an example (and not a recommendation) look at PHC, its mainly market maker driven so hedgies are not interested.
That is a difficult one to respond to as most of my investments seem to be at best going sideways….it seems to me that the success stories of the last few years have often been built on hope of future profit rather than actual earnings…..currently anything AI is flavour of the month…..nothing listed is at its correct value…..
I hope HCM is bumping along the bottom of its likely value but as we know it can be lower!
I am not going to put new money in and may sell some to diversify into other companies (Beigene and Innovent seem likely candidates)….but I expect to hold the bulk of my current holding for 5 years or more
Hutchmed got a mention due to it being profitable and the cash received from Takeda.
While CKHH profits were down there does not appear to be a funding ./ profitability need that would trigger a sale transaction. However should its UK merger of 3 with Vodafone not go ahead next year, and its other business continue to lose profitability, this could bring more pressure to realise some of its investment in 2025-7…
I have thought on many occasions it was a good time to buy, especially during the time of the botched placing by CKHH in Dec 2021 when it halved in 3 months from $35 to $16, but then lose even more money! Iam also now considering the opportunity cost here because it's ok to not lose any more money but if this sits where it is for the next 2 or 3 years could the money be better deployed elsewhere? That is the question I continue to ask myself.
HK has closed in a new bear market….yet it is about 20% higher than the lows it hit around end October last year…..v volatile and driven by the outlook for China which appears to be bearish again after not meeting expectations surrounding the end of Covid restrictions on the mainland, the ongoing property developer debt issues…..
All of which is irrelevant to HCM….who have cash in the bank, further product developments coming soon….and the prospect of meaningful royalty revenues commencing in 2024.
For long term investors this is surely a good time to buy..
"China's pull for foreign pharmaceutical companies will only increase despite uncertainties in China-US relations and the so-called de-risking strategy pursued by some Western countries, business executives and experts said.
Several factors make China attractive, they said. The country's pharmaceutical market is enormous and expanding fast, second only to that of the United States. An aging population, continuous improvements in healthcare accessibility and rising health awareness mark China now."
https://www.chinadaily.com.cn/a/202308/15/WS64daaf9ba31035260b81c165.html
Aggregated Reportable Short Positions of Specified Shares as of 04/08/2023
https://www.sfc.hk/-/media/EN/pdf/spr/2023/08/04/Short_Position_Reporting_Aggregated_Data_Eng_20230804.pdf?rev=bc545ce10270459abbfa78d19997f8be
Aggregated Reportable Short Positions of Specified Shares as of 28/07/2023
https://www.sfc.hk/-/media/EN/pdf/spr/2023/07/28/Short_Position_Reporting_Aggregated_Data_Eng_20230728.pdf?rev=6ee6ef0e16af41ceb145f0fa34fd0943
Bit of weekend chit chat, here's what happened to one fund shorting ad lib - very experienced manager too:
Anti-Tesla ETF Set to Close After Hefty Losses
"George Noble announced Wednesday that his Noble Absolute Return ETFNOPE +2.89% (ticker: NOPE) will stop trading on Aug. 24, and liquidate its $19 million in assets—after cumulative losses of nearly 60% since"
"He quickly put the money to work, going long oil and gas stocks, while shorting Tesla, Coinbase Global (COIN), DraftKings (DKNG), Roku (ROKU), and Wood’s ARK Innovation ETFARKK –0.54% (ARKK).
It has come to a quick end. With the S&P 500 up more than 20% this year through July, the Noble ETF was down 69%. Not even a year old, the NOPE fund will end its run."
https://www.barrons.com/articles/anti-tesla-etf-to-close-losses-934af767?siteid=yhoof2
You're a brave man Jatw adding another Chinese stock to your portfolio, ones more than enough for me !
The dichotomy with China (which I am sure exists for many investors) is an attractive and growing market, second largest healthcare system in the world, but the flip side is the never ending slew of negativity and associated tensions.
HCM's board and major holders must be acutely aware of this situation, corporate activity seems the most logical and likely route forward imo.
Its just part of the latest crackdown from a policy decision many years ago, but agree, it should be welcomed as no one wants that sort of activity.
I tend to agree this will benefit newer innovative players in the medium term…..although it does depend how endemic it is within the hospital sector in China - they could be more vulnerable to “pay to play” arrangements but they should be prepared to whistleblow against their established competitors as they have less to lose.
We perhaps should not be I surprised by the knee jerk reaction of the markets…..although AZ as the biggest non Chinese pharma did not react nearly as much…..I wonder if this is good old procurement fraud….on PPE, general supplies etc rather than specialist drugs and with NRDL inclusion maybe the risk is lowered too?
FWIW i have recently purchase some Innovent stock ahead of their results next week….as well as oncology they also seem to be making progress with lifestyle related drugs (Diabetes, obesity etc) which seems to be a favoured subsector at the moment.
I'm afraid this is not old...see: http://www.aastocks.com/en/stocks/analysis/stock-aafn-con/06160/NOW.1284403/hk-stock-news
My view is that in the end all this will benefit the innnovative Players like Hutchmed.