Member Info for Jatw

The trouble with reinvesting in high yield is the security of the dividend. If it is not secure then the SP can easily fall by far more than the dividends being paid. The insurers in the UK (AV, LGEN, PHNX, MNG) throw off capital and are well capitalised so they are safer than most. The best example I have is Vodafone which suffered a decline in SP from 200 to 70p as it struggled with debts. It had lots of assets which it has been selling and it has merged some of its units to create more viable operating units, but it had to cut its dividend in half and the SP kept falling.

I am very comfortable holding a share whose price is increasing causing the yield for new buyers to fall….that shows there is confidence in the share price and I like to run my winners. MNG is paying us royally to hold at the moment and I see no reason to sell. If you hold these for 10 years (and many of us will have acquired them on demerger from Prudential 6 years ago), the dividends will have returned the capital to you.

I see this as a steady share that our kids can stick in their ISAs reinvest the dividends until they need some cash in 20-30 year time.

I recall there was mention of an R&D presentation in late June/early July during the Financial results presentation.

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No doubt Hutchmed will be asked about the use of AI in their discovery programs.

I would expect a lot of modelling of compounds before they get to IND…so maybe AI will be more about predicting label expansion?

The RNS of 5 June suggests that the promised reporting on 19 June may be delayed further (not by much - still due in late June)

The finance /legal functions must be under a lot of pressure with the divestment of the manufacturing in Italy.

No doubt this will have a cost in next years results.

12 June may be an interesting session in HK after Trump says there is a framework agreement between US and China.

Tariff outcome still TBC but presumable some of the worst fears (eg delisting) will be off the table in the short term. Of course Trump can always declare a breach and start raising issues some time in the future.

Is FSTA a better/similar/worse investment than YNGA?

YNGA had a better LFL sales improvement last year - I would suggest similar but slightly better than FST.

FSTA reported LFL sales of 5.2% last year….not as good as YNGAs 5.7%.

Cheapsharesboy, here is my view FWIW.

A 15% investment is somewhere around £750m maybe a bit more now. The £500m buy back did little for the share price so we might assume a large buyer repeating the process over what may be 12-18m or longer will not change the market price by much. Indeed the fact it is not a Buy Back has no direct impact on dividends per share. The DI deal does not really move the dial on profitability for MNG but it does make it a little brighter/make the dividend more secure.

I think we should focus more on what the market expects in yield from its income payers. UK interest rates may need to fall because of the state of the economy (different views exist on this). The current trailing yield is 8% at about 250p, 7% at 280p and 6% at 320p.

Unless M&G can raise its growth rate and the dividend, then the SP is more likely to rise/fall with market expectations of interest rates. Financials are often punished if the economy is doing poorly and interest rates are falling because of weakness, hence the market may decide it needs a higher return to compensate.

I dont see the yield falling below 7% so SP advances may have to be driven by MNG growing its dividend.

However you can buy at 8% today which is much much better than cash rates.

Waiting for a pull back….my innovent up 25% last week and 55% in the last month. Innocare 20 and 36%

HCM 11 and 15%.

There seems to be a lot of momentum trading in HK, so this relative performance can reverse.

Another perspective is that Innovent is trading at 80% of its Covid peak, HCM is 30%, Innocare is 25%.

Hoping that if the Savo and Sovlep approvals come through we will experience a significant uplift (50%?). Unless that does happen it looks like HCM may be a junior rather than senior role in consolidation.

The biotech/biopharmas have been very volatile recently.

Last week, Innovent had a one day gain of about 15% and today Innocare 13%.

HCM is definitely lagging the HK market at the moment, but I think there will be a significant and rapid re-rating if the outstanding approvals come through. The HCM route map shows the launch order of the Savo+Osi SACHI trial, then Sovlep ESLIM, then Fruq+Sint Frusica-2. Of these I only have concerns about the Sovlep (ESLIM) approval, as the reason for delay was stability of the chemical formulation. The other two approvals are combinations of already approved drugs, hence they have a simpler review route without the manufacturing elements.

I hope we will see Savo approved in Q3, Sovlep in Q4 and Fruq +Sint (RCC) close to the year end.

Lgen notably failed to hold its gains when its Japanese deal was announced. M&G has done well to.keep about 60% of Friday’s gain, perhaps more to do with the on market stake building. Buying 15%-20% over maybe 12-18 months is a significant underpin to the shares. JPM raised target some 50p ahead of the current market does no harm either.

Steady gains to come (along with market gyrations)..

While i wont be staying up to listen to the SACHI advertising bulletin, I do hope it proves to be a positive step for the company.

Savolitinib has been held out as a great store of value….but AZ has not rushed to get it to market.

There is potential for the NMPA to approve the Osimertinib / Savolitinib combination therapy in the next few months. Both compounds are already approved, so they have a simpler data review and assessment process to complete (the combination of Fruq / Sintilimab was a 7 month review resulting in a conditional approval)….hence i am hoping for approval in Q3 and a launch in Q4.

At the FY results, Dr Su suggested the global data might support a conditional US FDA approval, any insight as to why that was not pursued by AZ will be interesting (although conditional approval means the follow on study is needed anyway - and if AZ is not in a rush why push the FDA)

Dai-ichi have done a smart piece of business. Their mcap is c 28bn USD. They will invest about $1bn/£750m in M&G which will pay them about 7-8% as a dividend (which should finance any loan they take to buy the stake).

They are strengthening M&G and their own business through the JV which other things being equal create value for DI shareholders and M&G.

A win - win unless I am missing something.

LGEN did a similar deal with Meiji Yasuda (another Japanese Life company). They sold their US protection and a a 20% stake in bulk annuity business.

Bulk annuity business is specifically mentioned, so expect M&G/DI to commit capital to the shareholder annuity business.

Are the Japanese content to own a minority stake? They could have got access to M&G investment expertise by placing investment mandates….they did not have to do a broader product development and distribution deal. Probably try before you buy. Interesting that they can go to 19.99% quite easily under the agreement and from there it is not far to have a blocking shareholder interest / effective control.

I suspect HCM may well be in both….but it is all about timing.

3069 has not been around very long - so missed the COViD boom. Most individual shares are still well below that level, although some have gained a lot this year.

I hold Innovent (1801) and Innocare (9969). Both are around break even and both have gained significantly in the last year.

I am glad I diversified, but regret not partly divesting of HCM to do so. However I think that if HCM gets Sovlep and SACHI approval this year, that will change the sentiment towards HCM.

I think I have seen the full list of holdings for the first going via hkexnews website.

As a UK investor my platform refused to hold 3069 as it contains entities on US sanction listings (the China Military Assets I think Wuxi is one of these) from Trump’s first term.

The iShares MSCI version excludes those entities so is permitted. At the time I looked at the HSI version - it looked all old school HK companies rather than the mainland newcomers which is what I wanted exposure to.

Just finished listening to the BoA presentation where Mr Shi (Chief Medical Officer) was the company representative. Key points:

Savolitinib - no NDA is being pursued based on Savannah, AZ/FDA agreed to wait for SAFFRON to complete (enrollment completes H2 2025, so that will be a late 26/early 27 NDA).

Sovleplenib - hoping to get approval later in 2026. The launch of Tazmetostat will help build the blood disorder sales teams for Sovlep.

ATTC - they seem to think this will be a significant advance with broad application.. I expect there will be an R&D presentation like last year where this will be showcased.

AZ continues to delay NDA for Savo in the US to the detriment of HCM..

They currently buy shares on the open market and hold them in treasury to meet employee (inc director) share based remuneration and benefits.

I would like to know how the $1.4bn cash will be used.

They will be close to a cash break-even on an operating basis, it can’t all go on the new ATTC platform. Licensing deals for China may not be very expensive due to relatively low market pricing…and anything high volume will appeal to AZ and others.

It is reasonable to think they could pay a dividend or buy back 5-10% of the outstanding shares.

The investment cos/insurers can really only speak for their funds backing annuity payments…..infrastructure with regular largely fixed/regulated earnings are a good match for this business which may have to pay out for 30+ years…..but it could be the next PFI when the politicians complain these funds are ripping the taxpayer off for payments for roads, reservoirs, tunnels etc…..

The more speculating private equity/small business growth assets are not suitable and it will depend on the guardians of the investment funds as to whether they are allowed in…….personnally I would choose a specialist fund for a small % allocation rather than have these types of assets embedded in broader funds….

News in Aviva’s Q1 update that they expect to write a lower level of bulk annuity business in 2025, concentrating on improved margins. Market will still be competitive, but all participants will be looking hard at their ROC and margins.

We know that Just volumes are likely to be H2 weighted…whether this will present a buy opportunity (ie a dip with the trading update/results is an open question. I bought an extra 1500 earlier this week at 141 and will have some cash available should it go back below 140.

I think we need to see what the revised company finances look like, the details are few and far between.

Maybe they will be able to show a pro-forma 2024 for comparative purposes. We do know there will be a one off profit, a change to net cash from significant debt and limited depreciation/investment in fixed assets, so the IDA in EBITDA will be much more positive.

Maybe the analysts will get the numbers out very soon.