Member Info for Jatw

What an astounding run. Equivalent to 482p
Would have been well over 500 if the $ was not weakening.
Must be heading for a drop as traders take risk off before the weekend.

CKHH results tomorrow are out once the HKSE closes.
Doubt they will say much about HCM or their shareholding but you never know.

I don’t know of any specific reasons behind the current surge.
Until we hear otherwise, I attribute it to analyst upgrades following the HY results which reconfirmed the progress made and revealed some next stages.

I can’t see GA using their warrant in the short term....there is no upside unless they sell immediately.
I suspect the market is relieved that M&A on the large molecule side is moving into collaboration. Much cheaper and risk sharing rather than risk overpaying for a platform.
The new factory was a surprise, but the investment is spread over a number of years and shows confidence in the future.
The surufatinib news will be nda acceptance in China for SANET-p (maybe fast track). Approval for ep in China in next few months and launch around end of year. Approval in US is not expected until late 21. They start the NDA process late this year.

Some high level guides for those new to life and asset manager accounts
Operating profit = fees less expenses less assumption and experience changes...Is close to cash available from operations. LGEN a is highly profitable at this level.

Valuation changes = Balance sheet non cash movements caused by marking assets to market price.

These flow through to the balance sheet where the key metric is Solvency Capital Ratio. 173% = strongly capitalised. Can easily afford to pay a dividend.
Most listed insurance cos would target 140-160 for capital depending on the overall economic conditions.
SCR around 140% (Eg Just group) stop paying dividends and Build or conserve capital
SCR around 120 means you should raise capital unless the economics mean you expect capital to rebuild quickly.
SCR of 100, PRA are intervening Before this and would expect the company resolution plan to be executed (insolvent).

Amones
I agree with your sentiment that we need to be thankful for the recent improvement in the SP.
The company is making progress and is much stronger than a couple of years ago.
We need to give up on the highest sp and recognise that was the result of a huge run up and was built on hope. The company has been cautiously expansive under CKHH control, but has not had free reign like Beigene. This has de risked the investment.
There are issues:
Savolitinib has been a slow burner, Elunate ok but lilly has not been fully committed. Surufatinib will be proof that HCM can make it big.
Davey I appreciate your posts and wider insight and positive disposition. (If a bit too positive at times) I and others try to be more sceptical which I hope helps you too.

I think Hcm is an excellent long term buy and hold at these levels.

Highest for a while a good sign the investors liked the HY presentation and prospects.

At first well received, but then fell significantly.
PE still has a stake to sell
What do we think is best?
Sms or calisen?

Will revisit these estimates in the next few weeks.
We can also expect the company website to link to updated reviews from Trinity Delta and Edison.
Edison is already towards the top end, at $44.5 TD at $32.99. I expect both will up their valuation of the company, but there are also more shares in issue since their last updates so whether that translates into a SP uplift we will have to wait and see

Calisen results well received today.

Pre results 8 targets ave 33.99
Yesterday 8 targets ave 35.28 (4% up), range 29.91-45.00

I hope GA will help them with the transition.
I am sure GA will invest the second 100m..will they prefer to underwrite a new placing below $30? Or exercise the warrant and book an instant profit. It is in management and othe SH interest for the warrant to be used.
Hence we can expect management to try to reach $30 in the next 18m. They have a few catalysts for this including
Increasing Elunate sales
Positive momentum in Surufatinib and savolitinib sales during 2021.

The £ price has to absorb the $ exchange rate which has been a drag recently for UK investors.

Amones and Davey
I believe the difference of opinion is one of timing.
In the long run management does care for the reasons set out by Davey. In the short term I believe they do not worry about the SP and that leads them to do the regular advocate fund raising and drop surprises like the 130m factory investment.
Owning factories and sales forces is probably in the long term interests of the company, rather than outsourcing and licensing but it brings additional short term costs and risks if the management are not able to execute these new skill requirements.
The pipeline expansion is a case in point.....the scientists can create new formulations and look for targets....so far they appear disciplined in what they take forward into the expensive testing and proving phases, but They could very easily consume all the product cash flows in new development. Big pharma knows it has to split its income between rewarding investors and innovation. At the moment HCM is about innovation, the transition to rewarding investors could be difficult, management so far has not had to do this.

I would like to see CH present their 10 year plan (I bet he has one)......also how they go about costing the development of new drugs and evaluating their commercial prospects.

Could give a boost to all meter installers....or cause a drop.
Hopefully SMS metrics look better

I have looked and found there are a number of academic articles investigating vaccines and adverse events this one is typical noting reporting of c100 deaths from H1N1 vaccinations.
Conclusion is there is little to fear.

https://academic.oup.com/cid/article/51/7/871/355467

MD Morgan please cite your evidence for mass complications.

Personally I am pro vaccination......and would support mass vaccination for Covid even if it is partially effective. The contribution towards herd immunity will be positive and the confidence value immeasurable.

I see there is also a Chinese version.......the graphics look similar, so I assume it is!

Good post Tacly.
That should make HCM a bargain at the moment, for I am sure it will get an oriental listing at some point.
Expanding on my point about this company thinking long term, it does also need to produce some shareholder value. While I know that licensing surufatinib in the US may reduce overall value, if it came with a material upfront payment, it would show how HCM could become self financing quite quickly....otherwise I fear that management will find endless investment opportunities for new shareholder cash and that Dilution will continue to hold the SP back. Management has shown itself to be flexible and pragmatic, so I hope a self reliance exhibited in the factory decision is not too engrained that other financing options are not fully considered.

This is a company with very big ambitions and is thinking strategically.
Indicators:
Starts by selling others products and generating value.
Invests In scientific expertise...proves and then expands into new areas.
China first then ROW, now global for the start.
Builds out Own oncology sales force for China (row?)
Build up and Own manufacturing capability
Smarter funding

Seems to get the bases covered

It would be interesting if CH would talk about the future strategy and the 10 year vision....I would not hold him to it, but it would be an interesting insight into the future.

None of us have a crystal ball, but I would not bet against this company becoming a large global player through largely organic growth.

MD JM
You misunderstand PHI there are no treatments it is income replacement if you cannot work.

Questions brought out some interesting developments
Large molecule platform likely to be collaborative rather than acquisition.
New factory is a 100m investment over 3-4 years.
Looking at how to launch surufatinib in US, likely to be via a distribution partner to efficiently cover the settings needed. Played up the simplicity and concentration of sites to cover.
Future developments likely to be global first rather than China first
A further 4 compounds to be in clinical development in 12-18m including first large molecule.
Elunate distribution seems to be about accelerating sales with 3x lilly sales force focused initially on one product and gaining efficiency savings when other products come to market. Sounds like Lilly net profit will be protected, HCM can get upside through a more productive sales force.
CH thought 40% penetration was possible for Elunate ($80m) approx 3x current level.

Food for the analysts to ponder....let’s see what valuation changes they come up with in the next few weeks. Per Yahoo Finance, they have 8 estimates with an ave of $33.99 per ADS.

At first read, the RNS is broadly as expected. Cash burn rates appear lower than expected. Elunate has been prescribed more now it is on the NDRL, I dare say Covid has suppressed demand a little, and price reduction means there is only a modest rise in sales value.

Pipeline is the major feature, what little new information there is provides insight into potential launch dates.
Also Mention of a new manufacturing capability in Shanghai.

Webinar questions likely to be more illuminating.