Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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HCM held onto much of yesterdays gains…but Innovent dropped a $300m share placing on the market at 8% discount and fell 12% at worst before recovering a little.
Good to note that new funding is available in HK……not that HCM should need it given the plans to break even consistently from 2025 onwards….and the options it has for its JV businesses.
Could not discern a reason for today’s gains which were there on opening in HK.
something positive at G20? But not generally across the HK market so maybe some china bio pharma policy change?
Interesting angle Jatw, so many tbh with M & A activity currently so high.
Both BGNE and HCM up 8% across the water..
CKHH is now very much an income share seeking stable returns…..so it needs to maintain liquidity and receive cash from its subsidiaries…..at the moment it is focusing on releasing capital from its mobile telephone businesses…..if the Vodafone/3 merger goes ahead next year then it will release significant funds and not draw on capital…..there is then an option for Vod to buy out CKHHs share as long as the value has increased by 10%……if that deal is blocked then CKHH ,may need to reconsider its options….one of which is to realise value from Hutchmed.. IMO that would be via consolidation…..they would book a large gain and have a smaller stake in a larger business which they could then sell down with less scrutiny….that is what they did selling Orange to Mannesmann ending up with a 5% Vodafone stake.
Davey, heres a more general post as to why UK listed companies are attracting attention, not all bad news for us unvestors.
US funds just see the UK as one big toy shop and why not, take a look at the discount to US equities below, the disparity between the two has never been higher.
UK takeover activity
https://globalalphacapital.cclgroup.com/insight/uk-takeover-activity/
I don't have the exact figures but it seems as though not a week goes by without another bid or M & A activity, this is refelcted in the sustained drop for London listing, see chart below:
Number of companies trading monthly on the London Stock Exchange (LSE) from January 2015 to July 2023
https://www.statista.com/statistics/324547/uk-number-of-companies-lse/
A smaller pot of course means a higher percentage chance for those left, the actually number is less than just the quoted figures as many are out of bounds, for example defence or competition issues, some businesses are fairly valued too.
I would be tempted to watch CKHH for divestment of other interests, we also know now that major shareholders have steered HCM towards a more commercial path so they are at least listening.
If nothing happens it could be those same institutional holders push for capital return by way of special dividend and/or share buy back.
In essence something will give, we just don't know what yet.
Trinity Delta also published a new detailed research note on Thursday
https://www.trinitydelta.org/wp-content/uploads/2023/09/HCM-Outlook-230907.pdf
As the majority shareholder I wonder what CKHH would want in order to be tempted 1 pencil?
Reads very well davey, noticeable change in tone towards commercialisation and shareholder value.
Still think takeover is the most likely option tho.
The Company has just posted a new Corporate Presentation with various updated content including Savo BTD
https://www.hutch-med.com/wp-content/uploads/2023/09/pre230906.pdf
..more nodding required ..lol
Quite an open piece here, interview with Commerce Secretary Raimondo
“Not decoupling our economy is critical, not just for our economy but for our national security,” she said. “We have to do business where we can, communicate and have dialogue where we can, and never compromise our national security.”
https://www.cnbc.com/2023/09/05/secretary-raimondo-us-businesses-are-desperate-for-dialogue-with-china.html
Nod nod nod nod!!
"If you already have shares in Chinese companies, you will have endured a painful few years."
https://www.thisismoney.co.uk/money/investing/article-12473145/The-dragon-wounded-time-invest-China.html
I can hear davey nodding in agreement (for the whole evening : ))
That's a fair old read compo, but agree with the gist China is in good shape overall, so many companies either setting up shop or expanding, MacDonald's one of the latest.
The US/China business partnership announced below sounds very encouraging, something tangible to build on - it also means both sides are willing to co-operate.
Some context on the chinese economy/markets
https://research.gavekal.com/article/making-sense-of-the-china-meltdown-story/
China and the United States will establish a new communication channel between their commerce authorities, according to a statement released by China's Ministry Commerce.
During his meeting with US Commerce Secretary Gina Raimondo on Monday in Beijing, Chinese Commerce Minister Wang Wentao and his US counterpart agreed to form a working group. This group will comprise deputy ministerial and bureau-level government officials from both countries alongside business representatives, to seek solutions to specific commercial issues, said the statement.
https://www.chinadaily.com.cn/a/202308/29/WS64ed3e56a31035260b81eb4c.html
Excluding US tensions, where else is there such a favourable business environment.
Despite all of the headline actual companies are falling over themselves to do business in China.
The bio pharma market seems to be back on a roll over the last week - in HK/China.
And the good news for HCM keeps on coming. I doubt they were expecting BTD for the Savo gastric cancer line…..it is a small scale study at 60 patients…but seems to take a while because of its end points….first patient enrolled in March this year, hopefully BTD will allow a faster accumulation of the cohort…still 2026 before new revenue arises.
Authorities are certainly pulling out all the stops, could get very squeezy as momentum shorts have try to cover.
China has significantly cut stamp duty on share trading in a bid to boost market activity
"We are very pleased to see the State Council's latest policy to further optimize the foreign investment environment and increasing efforts to attract foreign investment, especially the clear mention of accelerating the landing and operation of foreign investment projects in the field of biopharmaceuticals," said Leon Wang, executive vice-president and international and China president of AstraZeneca.
https://www.chinadaily.com.cn/a/202308/28/WS64ebcef0a31035260b81e6cb.html
8k of shares traded across the pond, should make the 'days to cover' figure interesting for short side..
The messaging from the medical community associated with FRESCO2 and the FDA rolling submission indicates to me that approval is highly likely….and that will unlock substantial sales for Takeda with approx 20% royalty for HCM.
in which case the question is how much of the value is already included in the SP?
Will there be a burst of speculative activity or will the market just shrug and wait for 2024-25-26 financial results?