Member Info for Jatw

Q1 AUM were flat, but record gross and net inflows show this business is going well.

We have all experienced the market falls from mid-March that have largely been reversed during April.

This labour government is creating more need for financial planning and asset management not less….once the US Iran war is over Quilter will bounce and if it does not it will become more of a target…..

My view is to buy on weakness and accumulate at these levels.

Q1 AUM statement tomorrow…..think it will still be pretty good…flows will be strong Jan/Feb there may be some market falls reducing the AUM in March, but those have largely been recovered already…..the key will be outlook…I think their advisors will be busier than ever.

It is hard to gauge what really drives the price in these M&A deals….obviously prospects and filling gaps in the pipeline….I suspect that ownership is one of the biggest components - companies like to own the whole caboodle.

Logically you would think that Takeda is one the hook for $1bn in royalties over the next decade and 400m up front much of which is still cash on the HCM balance sheet…..with another $bn from AZ royalties coming due in the next decade you could build a case for either one to pay 3-4bn for the company and be more or less guaranteed to get most of that cash back through current resources and future known cashflows…and the pipeline is free….but of course CKHH will not sell at that price, it needs 5-6bn to consider an offer…but if an offer never comes they will have to live with an asset worth considerably less.

There is another story of a major disposal in the CKHH group - with the HK supermarket business a potential merger candidate with the Swire supermarket group being reported as under discussion (presumably a pre-cursor to an IPO of the health and beauty retail operations). It seems almost all assets could be for sale…..

I have allocated my ISA for 2026/27 to three other China pharma cos……Be One and Innovent on the grounds they are among the largest bios with international operations and Innocare just slightly larger than HCM which has just turned profitable on its oncology sales and has a US partner to develop its lead candidate……I hope we will see some in-market consolidation among the Chinese companies which will raise the sector. They are all well funded and able to buy out smaller players, but the larger prize will come if they can acquire /merge with others in the top 20 of the HK biopharma index.

Time will tell, but I think these might fund me a nice car in 10 years time.

This slipped my attention, but it appears that HCM no longer meets the eligibility criteria to be part of the AIM 100.

After reading the eligibility criteria, I think it is due to low volume in London. The eligibility seems to be to trade 0.25% of shares (on AIM) each month (10 of the past 12 months). That would be approx 2.1m per month or approx 100k per day. The average is only in the 20-30k range.

HCM was not eligible for lower IHT rates, so I am not sure this really makes much difference in terms of demand from investors….but it would be a reason for HCM to consider leaving AIM. They would be better off on the main board if they still want a London listing.

The brokers seem to be endorsing the deal with rises in their target prices.

Citi today 840p,

Phoenix/Standard has been effective in consolidating businesses and I see no reason why this will not be an effective combination continuing the transformation of Phoenix from a closed book consolidator to an open book operator which has to be a good thing for legacy customers and the employees..

Disappointing market reaction to what were positive results and said to be ahead of expectations.

Has given up all the gains in the run up to results.

One for the future…..they will surely want to upgrade their target AUM.

Apparently Iceland could be added to the list to help close the North Atlantic gap

…..but it is confusing to some that Iceland is greener and Greenland is icier.

This was always going to be a difficult set of results as EMs fell more than most on Iran war concerns.

That they also had a large withdrawal to move to net outflow was disappointing, but the Japan Post arrangements should be a decent inflow and EMs should bounce back later in the year once the war effects start correcting.

Could still suffer a bumpy ride as US/Iran do or dont work it out.

One to buy when the war ends / the disruption eases in EMs and the US thinks it is safe to start investing in them again.

Found your substack quite easily simple search of ‘Gordon aitken life insurance analysis’ will return it.

Your BPA analysis may need expanding to include the M&G products that share the life underwriting results with sponsors via a captive insurer and the deals backed by the PAC WP fund (with a lower cost of capital) - these further your BPA piece about PE deals that BPA is about the long term capture of asset management fees rather than the insurance margin.

Gordon - welcome to the LSE discussion groups.

I agree with Jungle’s sentiment - sensible informed commentary we look forward to reading your thoughts on other companies.

This deal will keep Standard Life busy for a few years before it considers another significant deal, although it is running out of obvious consolidation candidates, but is building itself into one of the more dominant providers - although the savings and pensions industry is still quite fragmented with plenty of opportunity for consolidation in the asset management, platform and advice spaces. Bloomberg reported an RBC view earlier this week highlighting wealth management - I think that is where we will see some M&A next, there is a need for more cost effective advice which the regulator is beginning to enable. Q1 AUM statements due soon from Brooks MacDonald, Rathbones, Quilter, Tatton etc will be worth watching.

We wait and see….I would not be surprised to see an ATTC deal for several products if they target the same therapy area (eg oncology/ immunology) as that is driven by one team/need in the acquiring company. it is just easier for both sides to do one deal….the seller shares more costs earlier and the buyer pays a lower upfront fee. Lilly has recently done such a deal with Innovent for multiple products.

I would agree AZ / Takeda have the relationships to be in pole position, but their need may not be as great as MSD/BMS….but there are plenty of others out there in the middle market.

Taking the deal in its stride…..with the other more fundamental issues facing the market I would take the view that bigger is probably better and this deal is fair to both sides (probably slightly better for Aegon as they realise value and can share in the future upside). It is not clear whether Aegon will be a long term shareholder, their ambition is to be US focused and their lock up will end when they register their holding company in the US, so I think we can say they are more likely to sell down their stake in 2028.

Yes - a continuation of the consolidation strategy….we can expect SDLF to focus on the cash generation of which the value of the back book can be estimated by using the CSM and the rest will be capital releases from a bigger more diverse book and significant cost savings in the head office functions..

Similar to previous deal structures, £2bn made up of 62.5% new shares and 37.5% cash.

The shares will give Aegon approx 15% share of the enlarged group.

Metrics given for Aegon business is 14.2x Operating profit and 1.9 x IFRS equity ( excludes the CSM)

Fruquintinib has launched into this messy situation

Each European healthcare system makes its own decision on price to be paid by the national system = delay for patients

US rewriting its Medicare system causes a pause in prescribing.

EU prices lower than US feedback into US pricing

The effects are always poor for the patient who is denied / deferred potential treatment.

And the politicians blame the greedy pharma companies (some are), but the real costs are in the govt / insurance industries that inflate costs all round.

I wonder who HCM will partner up with for Sovleplenib and ATTC?

Have to consider that this activity is linked to Dai-Ichi some how. Morgan Stanley is one of their main corporate brokers.

DI has recently announced a 6% uplift in ownership to 15%.

This might be MS acquiring more over time for the next DI tranche.

I agree a merger of equals (low bid premium) with a similarly sized and funded entity would generate a lot of value.

There would be rationalisation gains across all aspects of the business.

A JV to develop and commercialise a category would also work, eg the blood cancer treatments could be JV’d with another set of blood cancer treatments - one sales team, sales on different lines of treatment, more specialist R&D capability. Then can be floated / sold separately by each partner or lead to a wider merger.

But the daily volume average is 4.7m in HK alone…..that is nearly 100m a month.

It suggests to me there is a strong short term trading which will tend to limit the shares to a range as every profit / loss becomes the next trade.

And where is the good / bad news to change the narrative a cause a break out? The pipeline has continued to develop, but competitive pressures have offset on the sales side.

Today’s RNS of data being presented is typical - it suggests the ATTC platform is going to generate some decent products but they are probably a couple of years away from product sales - only a deal to out licence the platform will be positive this year but you cant trade that as the timing is highly uncertain, it could be tomorrow but it might not happen.

There are several NDAs being assessed, all can add useful revenue, but not much changes in 2026. We should see a meaningful jump in HCM sales in H1 2027.

I hope we will see a SP advance in 2027 based on sustainable sales growth. We may see one off gains due to licence deals in 2026 otherwise it is likely to trade with the HK bio pharma index.

I am not selling, but I am buying BeOne, Innovent and Innocare are in the sales growth phase now.

A good day to announce this deal, relief around the ceasefire reflects a good deal of risk reduction due to lowering inflation expectations.

A good vote of confidence by the Directors that they can profitably invest in expanding the business - while this is a smallish bolt on (much smaller than City Pubs), it is still good the existing business is generating the funds for expansion.

9 posh locations being added…..premium prices (and costs) but serving well heeled customers and tourists should be a winner when they should be able to remove a large chunk of the central administration costs from Cubitt House (HR/finance / procurement, IT…..etc). Creating a stronger business.

Main market only 3 weeks to go.

Yes - just asked the google search AI mode for those results. Not sure if it is complete, but it seems credible.

I think HCM is at risk of being left behind its direct comparators within China.

ATTC is the big hope….but there are a lot of next big things out there and already licenced out, so the number of potential partners is reducing.

The biggest obstacle to a company sale will be meeting the CKHH price expectation (maybe up to the 50HKD IPO price) so I think a merger of equals within China (with a revenue generating company that is well capitalised too) is more viable. Then use the cost savings in the pipeline and administration (which could be significant $200m) to start dividend payments, it would still be a growth company with excess capital but stronger and a better investment.