Member Info for Jatw

And some decent volume too...
Current market conditions are highly volatile, so we can’t read anything into one day.

US China relations and HK situation should really not be too much of an issue for HCM....any US new drug applications are likely to be 2021 under the next president.
China drug development and sales will be unaffected which are most important in the next couple of years.

PM has done an excellent job steering Pru for the last 7 years.
These rules are designed to stop boards becoming dominated by one individual and then incapable of change. Starting early on a replacement is a good sign that Pru can renew itself for the challenges ahead. A HK or SG based chairman will be at the heart of Pru Asia.

Amazing what a little optimism does......imagine if The HK situation improves and sino-us trade is sorted out.
5 trading days until M&G debuts.
EGM on Tuesday

The transfers change the capital position of the two companies involved but there is no change in risk for the customers who are protected by FSCS and before it gets there the capital of the company writing the policy. The PRA takes a close interest in the solvency of both large insurers and has to approve the deal.
Perversely, the dissenting customers may remain in a less safe company. I am sure the two parties could opt out dissenting policyholders as they are relatively low in number.....but if that then morphed into an opt in then such deals are impossible to deliver in any scale.

If a customer wants to transfer do they also want to pay the price of the new provider, there would be costs of moving. Eg Pru booked a loss of 500m on this deal.....but it releases more capital and reduces the potential for future capital increases so improves the capital position of M&G.

I think there could be an interesting parallel here with how HIV treatments have developed.

Individual companies developed their own treatment strategies. A block buster emerged and then the smaller players found that their drugs worked best in combination. Hence you get the three drug combination in GSKs VIIV JV. This creates a high standard of care which makes it difficult for other new entrants.
There is now a 2 drug therapy from VIIV which is more cost effective for healthcare purchasers.

Will JVs be formed to create best standard of care that can last along time? Will these JVs then become drivers of new standards of care.

What will be the future of HCM in such a network of JVs? Injecting assets for a share of a JV and then selling the JV to the market may be one way of realising value from the innovation.

Here is another idea for you Davey
Hcm does not fit with bio pharma investors expectations
Pharma is either big pharma where investors want dividends and some growth
Or innovative where investors want lots of growth and an exit via takeover by big pharma.

Hcm is innovative, but CKHH as 49% owner means an exit is unlikely. CKHH presence significantly reduces the risk of business failure but makes it less worthwhile for speculators.

I am sure that hcm will return to a more SOTP valuation but it may never have a premium rating.....until CKHH decides to roll it in to a big pharma (as it did with the Orange mobile phone unit selling to vodafone)

Nice timing....already 4K up.

Has anyone seen any forecasts for the shares post demerger?
Less than 2 weeks to go now...but timing means it will follow the no deal summit and weekend of parliament....so will be landing in volatile conditions.

Sometimes journalists do write a load of tosh.
How can a stunning result from a trial become a concern about the company’s ability to launch new drugs?
However their conclusion is sound.

Re capital group......we don’t know which of their funds has sold down its holdings. What is sure is that 5% is difficult for the market to absorb so someone is holding a lot of stock.

It might be a portfolio adjustment where they don’t want or can’t hold MNG or Pru post demerger.....so they choose to sell now....maybe they will be back for the company they want.

Davey,
I suspect that the CKHH situation and potential dilutive HK issuance have encouraged shorting and deferred some long term investors. This is still a negative until financing is secure beyond 2020 (not that a business with such potential will run out of cash).
I expect pipeline news will increase the valuation
If a HK listing is made the SP will take another hit, but will then recover quickly with further pipeline news.
Some scope for short term turbulence but rewarding for long term investors over a 3-5year horizon.
I expect to make small buys in the short term and then larger buys once the financing strategy is clear.

I too am a fan of The sum of the parts valuations in the TD and Edison reports (accessible via the company website). It shows there is a methodology that will incrementally update the valuation as new information becomes available. However it does show there are a lot of moving parts to the valuation and the more you include future pipeline development the more of a guesstimate it becomes. However it has to be wrong by 50% for the market to be right at the moment.....
Historically valuation movements have been news driven....let’s hope for some more positive pipeline news that can move the dial.
NDRL for Elunate
Viktory
SANET-pe
More on 253 today expanding global trials
..........

No big fall on Hang Seng should make this a good day for Pru, recovering yesterday’s drop.

politics will be beaten by demographics in the long term.....as such significant downturns caused by trump xi or HK represent good buying opportunities.

IMO the politics are stronger drivers of the SP than company performance at present. There is also fear of a correction created by a tweet.
Buying to speculate on an uplift caused by demerger is a fools game in these conditions.

I believe there will be two strong companies post demerger, but SHR may need to wait to see significant upside.......HK needs to stabilise and US China relations need to improve for the sentiment to improve.

There was a Bloomberg article today about how AIA is coping with the HK disruption.....a couple of weeks ago the measures Pru is taking (hotels at airports) to see clients were highlighted on this Board. These are resilient businesses and once the troubles are resolved they will flourish as they did before.

Easy to say with hindsight that this should have been added to the first tranche.
Says more about accounting rules and CKHH finances than HCM
On the plus side, this might mean the company loads up with debt rather than a dilutive share issue.

I suspect this has sufficiently soured relations with recent investors that there will be limited interest for some time.

Then post your views / questions and see what responses you get.

Start with the two company websites and review their investor day presentations that will give you a baseline and identify the macro trends they are targeting. You can also read the prospectus for MNG -300 pages about the business..
The recent annual reports will give you a feel of the past strategy.
Regulators, competitors will not address the split directly but are a useful source of data points to tell you whether the strategy seems appropriate.

There will be analyst views in the next few weeks that will help the market determine what the individual Shares are worth. Some of these will be reported on platforms and in the press...

Beat me to posting the link......
I don’t pretend to understand the implications of each of the stats but the 67% PFS seems a strong stat....and NDA will be confirmed in H1 2020.
Hopefully the US registration study can move forward quickly.....or maybe a big pharma would like to pay a large fee for US rights?

Another rough and ready view would be to compare the dividend with the yield of competitors.
Aviva trades with more than 7%, Lgen 6%
This means the SP is 14-16x the FY dividend.
Say the FY MG dividend is 16p x15 gives £2.40
The growth in Asia means Pru will have a lower yield....if that were 3%, the sp is x33, 2% x50. AIA yields 1.66% so x60....dividend of 36p x50 = 1800p, x33 = 1200p
That is quite a wide range, a current SP of 1480p is near the bottom of this range.

There are quite a lot of variables the analysts will model growth, debt, capital generation scope for cost reductions.....

Quite a wide range but I would anticipate MNG will be 200-300p, Pru 1200-1500.....there is a long way to 21 October......many US UK and HK opportunities and risks could move market sentiment.

Rothesay has done 2 large deals this week.....it has also raised £700m new capital from its shareholders this year to support growth.
I suggest that if needed, Rothesay will find it easier to raise capital than MNG.....the judge seemed to side with a relatively small number of customers and while acknowledging the experts saying there was no detriment to customers in the transfer decided they should not be forced to transfer to a foreign owned entity with only a 20 year history.....if the appeal is lost i will be very surprised.