Member Info for Jatw

To become a member of the Hang Seng index, HCM will need to be listed for two years and get into the top 50 by mcap (the index is slightly more than 50)….currently the smallest HSI member has a mcap of HK$62bn. HCM is trading around hk$50bn.
If things go wellit is likely they will be admitted to the index in late 2023.
The Sunday times lists HCM as the 115th largest listing on the London stock market shame it is on aim.

Good to see HK and the US markets having a positive influence on each other.
The more stable sp in HK matched by US this week bodes well for the future.
The sp has held up well in markets that have fallen quite sharply….another good sign.
While the company fortunes cannot be completely detached from macro economics and geopolitics and we can expect some movement in line with the wider market, I believe the main influence on Sp will be pipeline progress reflected in revenue gains over the next couple of years.

Always like to see the paid for analysis keep ahead of the SP. as it is a bottom up cash flow driven model it should advance with the pipeline and it made a big jump post the ASCO briefing.
These models will start to be validated and refined once material sales of 1bn pa are being booked.
While there is still a lot of guesswork in these models the direction is positive and can get significantly better as the pipeline moves to NDAs.

The timing of recent holidays in HK and NY have not helped as that seems to create a risk off approach in the market.
The next event is the HY results at the end of July, only 3 weeks away.
The results themselves should not be too surprising…..additional R&D spending creating a trading loss, sale of the JV creating a nice gain.
Perhaps the key item is how sales are going and whether guidance will be raised for FY 21. The 110-130m target included the AZ milestone payment of 25m which is in the bag. The run rate for sales of Elunate and sulanda needs to be ontrack for annualised 100m which is approx 8m per month. If they are at 25m in Q2 they will be smashing the sales target at the year end.
I would like a sales upgrade to 150m.

HK closed at HKD 64.45 on volume of 7.4m
Equivalent to
ADS USD 41.50
AIM 603p

Pre open nasdaq currently around 40usd or 580p.

V happy to see HK taking the lead…..in a HK market that was down 2%.

London has yet to get the HK price is around 600….arbitragers should be having a ball.
Buy AIM sell HK

Correction….Surufatinib was awarded fast track designation not priority.

I am sure that the target date of April 22 for approval is slightly disappointing given the tickets for priority review, however the latest corporate presentation was showing 2022 so there can be limited effect in knowing this is the date and in the grand scheme of things a few extra months means little.
My understanding is that priority review should mean 6 months from NDA acceptance. Either priority has been not granted or it could be the standard time has been published and it could be sooner. Does anyone know how the FDA presents the date it is working to?

Davey
I don’t doubt that HCM is undervalued compared with Beigene, innocent, genmab etc, but have you made allowance for the different profiles of sales in the companies.

The EV/s is clearly quite a volatile number and depending on how you assess sales could give v diff results. Eg are you counting only self developed product rather than commercial sales of others for which only a commission is payable. Also HCM a pharma sales in 21 are 4x 2020 which would create a significant change in the metric.
I don’t know what the numbers look like if you considered expected sales in 2025 or peak sales of current products….something more like a steady state.

AIA and PingAN announced chunky deals today.
AIA bought a 25% stake in China post
Ping bought some office blocks in Singapore.

Seems Pru needs to do its capital raise now….go big and get some deals flowing.

Do they need the cash? Seems they are selling for up to 7m an asset they hold at sale +9m
Does anyone know this subsidiary as part of quantum EBITDA as %of sales seems quite low margin.

Still selling india….not much left will have to find a new way to make some cash.

Amones
I think the mcap calculations do not yet reflect the new shares issued. Today’s total voting rights shows the number of shares at 848m. At USD8 that should be $6784m.
Davey has commented on comparable companies below….worth revisiting once the HY results are out and the dust has settled on the IPO.

I for one would like to hear more opinions from those who post infrequently. (And dare I say it even more from the regular posters). Now HCM is getting bigger, we need to now more not less and news about competitors, conferences questions at company meetings and other press reporting is all interesting.
This has proven to be a supportive collaborative board and long may it continue to be so.

The company has made a further move away from London by adopting HK corporate governance code to replace UK code. These days the codes are more closely aligned plus HCM wants to retain a US listing so there will not be much change.
HK HQ, HK listing is referred to as a primary listing. HKSE regs likely higher than aim so should be a good thing for SH protections and disclosures.
Would anyone with specific knowledge like to comment on this development?

Closed in HK at 60.3HKD
560p equivalent.
Or USD 38.8 for the ADS. Should be heavy volumes on the Nasdaq later today….i am not trading but it will be interesting to see how the US goes today.

Davey……you have been proven right that a HK listing can be transformative.

Thank you

480-600 a 25 or 20% spread depending on how you measure it. Pretty academic….

What a start…..really quite unbelievable that as a new listing people are paying 50% more than yesterday….let’s hope much of it sticks.
I wonder what the spread will be on aim…..possibly the largest ever.

Mature shares ultimately look like bonds with returns coming more from yield than growth in the SP….but they all go up and down with the general market.
MNG is still to find its steady yield but it is a bit lower than currently if they can consistently pay the dividend….confidence will grow and the SP rise over the next couple of years….then it will be down to how much growth MNG can generate….it is relatively small outside the UK so there is growth to be had organically or otherwise.
Any M&A is now at 300plus. It will not trade near there for a while, and if it did in the short term I think it would be time to sell on valuation grounds. At the moment still a buy for me.