Member Info for daveycaferacer

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.

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 ....

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.

Thanks compounding, there is certainly never a dull moment investing in Chinese companies and Hutchmed, all the geo-political rubbish, the HFCAA, various company mishaps, the infamous botched CKHH placing etc etc and now it appears there may be some form of corruption in the Biopharma sector - and whenever something impacts the sector Hutchmed seems to suffer more than most

That's the thing but I don't see any news, good or bad......

Thanks compounding, all China Biotech down, Innovent, Wuxi, Junshi, Hengrui etc etc but when they drop 5% we drop 14%, never a dull moment being a Hutchmed Investor. Possibly stupidly I will buy more.

Thx compounding, that article is 10 years old, are they still concerned? I've not seen any commentary in the press about it recently....

There seems to be a lot of selling in HK, currently down 12%, I can't see a specific reason

Thanks for this info 1pencil, finally the market/investors are starting to appreciate the company's great progress and future potential. Still way undervalued..... here's hoping we climb the greasy pole back to $30+....

Good - interested to see any short reduction stats you may gather 1pencil!

Here is the Company's 2020 view on the JV Valuation:-

The market value, based on China Pharma median PE multiples is approximately $1.9-2.0 billion.

Given our share in the JVs, Chi-Med’s share of this value is approximately $0.9-1.0 billion

The market value, based on China Pharma median PE multiples is approximately $1.9-2.0 billion.

Peer Group: 10 companies (excl. Chi-Med) selected as ALL listed and profitable mainland Chinese OTC/RX pharma manufacturing companies, with a focus on similar product types, and 2019E Net Sales in the ~$400-1,400 million range

Peer Gp (10) Median P/E = 22

All 61 listed China Pharma companies Median P/E = 21

Valuations have dropped across the peer group since 2020 but even so, we are still talking about a valuation of around $1bn if they can get a buyer

These results made excellent holiday reading, and the JV value is based on a P/E multiple of Chinese peers - I'll find the data and post it later. As a large long term albeit somewhat frustrated holder I hope the market will finally start to value the company sensibly.

Another day another loss

Great example of significant price rise 1pencil, the reverse is also equally the case of course

Indeed, and it probably depends on your investment horizon,, personally I had an exit plan here by 2025 but not wanting to be a distressed/forced seller that may have to be extended as I was expecting a $20bn mcap by that point - it would be a miracle and the second coming of the mesiah for that to happen now....

Thanks for your insights 1pencil, always useful and informative. I have averaged down so many times on Hutchmed but the strategy hasn't worked very well so far. Every time there is a significant drop I have bought, starting with the botched CKHH placing back in Dec 2021, and at various times since, always thinking it cannot go any lower, and then it always does.

There's been lots and lots of positives for China and Hutchmed for the last few years and still here we are at the same valuation as 7 years - what happened? ;0-/

that's interesting 1pencil, and when i made a large purchased in hutchmed i considered beigene at the time but thought hutchmed's prospects much better.....another investment ****up.

does bridgewater or dalio have any relationship to hutchmed or are you implying generally that funds may be increasing their exposure to china biotech?

As DBAVFN mention on advfn the capital markets are effectively closed to this Company. No institutions are going to invest in a further round of funding given what's happened previously (eg. botched CKHH placing) and other forms of self harm. If they ruin out of cash before they become cashflow positive what will they do to secure other forms of finance? What has happened to the disposal on non-core assets (jv)? That was touted as a key strategy a couple of years ago but we have heard nothing since. Also, the new facility was supposed to be ready by now, again no word. And now we have a NED from Carlyle - another sign institutional investors want a bigger say in strategic development, something the company has been terrible at, possibly as CKHH view this as a bit of a vanity project.

Indeed, and the NMS has changed over time but I do get that - i had an interesting discussion with Mark Slater about that very subject just after his disposal