Member Info for 1pencil

Here we go, again from results;

"o U.S. FDA NDA review, as well as the clinical site inspections and pre-approval inspections of our manufacturing facilities, are ongoing, several inspections have been completed with others pending subject to COVID-19 travel restrictions and security requirements for foreign visitors; and

o The PDUFA18 goal date is April 30, 2022 and mid- and late-cycle review meetings with the FDA have completed. Timing of completion of the NDA review is subject to FDA scheduling limitations."

Management sound confident on US approval, think the number of personnel is now higher - from results:

"U.S. commercial team continued to build for the potential surufatinib U.S. approval in 2022. The team, more than 30 personnel, is fully engaged on all aspects of launch readiness including supply chain, market access, marketing, sales and commercial operations."

I read somewhere that some factory inspections had already been completed in Shanghai.

Just reading this on another forum good results accompanied by upbeat outlook.

"Every business division and geographic region posted growth in the quarter, with Europe sales increasing by 16% to EUR2.85 billion and North Asia sales rising 9.4%. This included double-digit growth in mainland China despite headwinds from strict lockdowns in several cities in March, L'Oreal said.

Growth was unaffected by inflation, which had no impact on consumer purchasing trends, the company said."

I have emailed the CSRC this afternoon to ascertain how long the consultation process takes. It appears to have widespread support having been drawn up to directly remedy the current HFCAA situation changes or amme3ndments are possible but unlikely given how long its been on the drawing board.

Not much to report on my lobbying exercise as companies reluctant (understandably) to comment.

Added some myself last week NoS, order in this morning at 240p but missed it, did you buy back, I got the impression from your a d v f n post you had sold out ?

Correction, that should read 'Aggregated Reportable Short Positions (HK$)'

With regard to the HK listing, as of 8th April there are currently 94,680,000 shares reported short.

This is also a key passage ;

"3. Reporter: What benefits will the revised Provisions bring to cross-border regulatory cooperation, in particular to audit oversight cooperation?

CSRC Official: On the basis of requirements laid out in Article 177 of the Securities Law, the revised Provisions specifies that requests made by overseas regulators to conduct investigations, including collecting evidence for investigation purpose, and inspections in the Chinese mainland shall be carried out through cross-border regulatory cooperation mechanisms. The CSRC and competent authorities of the Chinese government will provide necessary assistance pursuant to bilateral and multilateral cooperation mechanisms. In addition, referencing international common practice in cross-border audit oversight cooperation, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators”. The modification demonstrates the open attitude that Chinese regulators have consistently held towards audit oversight cooperation and the alignment of the Provisions with international common practice, which will lay an institutional foundation for secure, efficient cross-border regulatory cooperation including joint inspections."

There have been a few press reports confirming positive actions from Chinese regulators but not much follow through, this is probably to do with how the regulations are changing - it appears the regulations are first proposed and published, this is what the press seem to have picked up on, after a period to allow feedback and comments the proposed changes are made law subject o any changes

In summary, we are waiting for the consolation period to end and any amendments made.

The first link dated 2nd April represents the proposed changes

The CSRC Solicits Public Comments on Revision to the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies Apr.2.2022

http://www.csrc.gov.cn/csrc_en/c102030/c2274356/content.shtml

The second link is a reporter asking what is the purpose of the above changes, this is important as it spells out the joint inspection proposals

Officials of Relevant CSRC Department Answered Reporter Questions Apr.2.2022

http://www.csrc.gov.cn/csrc_en/c102030/c2274405/content.shtml

"The revised Provisions will safeguard national information security by guiding companies to properly protect state secrets and sensitive information. It will also promote secure and efficient cross-border regulatory cooperation including joint inspections between relevant authorities and overseas regulators for the protection of global investors."

Not out the woods yet but flicker of promise

Shanghai to resume some production after 16-day lockdown, even as it reports more than 24,000 new cases on Sunday

https://www.scmp.com/business/china-business/article/3174564/shanghai-resume-some-production-after-16-day-lockdown-even

(it is behind a paywall but the gist of it is there)

Hong Kong-listed Sisram among firms eyeing opportunities in beauty and wellness sector, which could be worth US$7 trillion globally by 2025

https://www.scmp.com/business/companies/article/3174557/hong-kong-listed-sisram-among-firms-eyeing-opportunities-beauty

The national newspapers are having a torrid time losing out heavily to Daily Mail, article recently suggested The Mail has more readers than all the other titles combined.

Editors need views to attract advertisers, as this forum shows publishing a sensationalist article is a good way to achieve this.

Its up to investors whether they think selling or buying based on this sort or story is a good idea.

Good response by Matt, batted that one straight back !

Good point on tax selling although the shorts have their own agenda, currently close to a 12 month high on NASDAQ but still relatively small overall.

https://www.nasdaq.com/market-activity/stocks/hcm/short-interest

I have started to lobby major holders on the back of this government unitive, also asked to ascertain they are not lending out their own stock contributing to the recent downfall.
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China’s securities watchdog renews call that firms buy back shares, asks major shareholders to support stock prices amid sluggish stock market

https://www.scmp.com/business/banking-finance/article/3173959/chinas-securities-watchdog-renews-call-firms-buy-back

NoS, not really applicable as written over two years ago, things have moved at a pace on ;last month or two alone.

Have a listen to this guy, he is pretty switched and gives a good summary of options alone with HFCAA.

https://www.youtube.com/watch?v=DrZibtIIJ50&t=3s

Also worth noting their are two distinct (and very different) issues here, the accounting inspection which HCM falls under then you have accounting inspection plus 'variable interest entity' - these are a whole different ball game with around 80 of the 273 noted companies falling into this category.

Personally given the Chinese efforts, the former accounting inspection issue should be cleared soon even on a case by case exemption. Second largest portfolio weighting, hopeful for a positive outcome.

The board should by now have all the bits in place (audited accounts, independent chair..) to move onto a proper listing, enabling UK institutions to at least buy shares if they wish to.

There's an awful lot already baked into the current valuation but I expect THG like Amazon, Tesco will have to pass on some of the inflationary pressures limiting growth and margins, at least for 22.

Current inflationary environment affects all businesses, there's no escape from fuel prices but some will cope better than others due to automation, end to end logistics and economies of scale.

Easy to drive a company's share price down with such low volume v borrowed stock, London has traded under 40k of shares so far.

What's not so easy is to buy all of those shares back without moving the price.

Back of an envelope calculation, using the figure from HCM's investor page there are 864,530,850 in issue of which, roughly 70% are held by major holders or directors (this is a rough figure as JPM holding has yet to be updated)

This leaves a free float of 260m shares. Crest loan data for March sits at 6.72% or 58m shares, applied to the free flat this works out at just over 22%

Shareholder page

https://www.hutch-med.com/shareholder-information/shareholders-analysis/

Rough guide only, may contain errors.

Some of the volatility could be down to market makers trying to shake out holders, bit of a wild guess though.

Another batch of companies hit the SEC web site yesterday, each issuing their own statement - pressure will undoubtedly mount to get things sorted, HCM has Graeme Jack as non exec - ex PWC partner.

https://www.hutch-med.com/appoints-graeme-jack-to-board/

Today's TU

https://www.londonstockexchange.com/news-article/PZC/trading-statement/15410507

CK Hutchison Holdings Ltd down 40% over last five years, it's possible as HCM's largest shareholder they could apply the same logic here also.

HCM have a mandate for their existing funds but if they made strategic disposals then that may be a course of action open to them subject to AGM approval.

On another note, having followed a number of NASDAQ listed bio pharma's including BGNE I can see no correlation to anything, it's not uncommon to see BGNE up one day and HCM down only to be reversed the next day, or sometimes during the same session.