Hutchmed (china) Share Discussion Threads

[sportii] 29/6/2019 11:07

HHHL could have waited for Trump-Xi handshake in Japan. Trade talks commencing again.

[steeplejack] 29/6/2019 09:58

The RNS on the US site mentions "upsizing"which suggests that there was some encouragement to increase the size of the offering and I hope that was because of perceived demand by Morgan Stanley perhaps.Yet,A price down at $22 doesn't support that view.Luckily,resuming trade talks with China might improve sentiment.No comment in WallSt Journal today.Hutchison China MediTech Limited ("Chi-Med") (AIM/Nasdaq: HCM) announces the upsizing and pricing of the underwritten public secondary offering previously announced by Chi-Med on June 27, 2019. Hutchison Healthcare Holdings Limited ("HHHL"), the largest shareholder of Chi-Med and a subsidiary of CK Hutchison Holdings Limited (SEHK: 1), will sell 12,000,000 American Depositary Shares ("ADSs"), each representing five ordinary shares, par value US$0.10 each, of Chi-Med, at a price of US$24.00 per ADS ("Offering"), less underwriting discounts and commissions.

[dbadvn] 28/6/2019 23:05

Just noticed that HCM issued an Rns at 0700 saying that secondary sale would be 8.5million then just 3 hours later at 10;00 another rns stating that the issue would be 12million......

Indicates disagreement and breakdown of communication between the group and hcm.

What a mess.

[steeplejack] 28/6/2019 21:01

Yes,I agree.US closing around $22 equal to about 350pThing is,with all the trade war shenanigans,this probably isn't the right time to ask US institutions to 'step up to the plate' and buy a Chinese biotech that has decided to use NASDAQ to place stock because the Hong Kong market is dislocated by civil unrest triggered by Beijing.Morgan Stanley have always fancied themselves with placings and the use of what is called the "shoe",the extra allotment facility.If they don't get this away at the price,the proverbial will hit the fan.At the end of the day,all things pass and a crass,ill timed decision won't enduringly compromise the company's oncology prospects.I guess our credentials as long term investors is simply being tested.

[hamsterdam] 28/6/2019 20:03

hxxps://www.fool.com/investing/2019/06/28/why-chi-med-stock-is-tanking-today.aspx

[dbadvn] 28/6/2019 19:48

Ruthless and crude self serving action by larger Hutchison group in order to lower their stake to less than 50% to change the basis of the HCM consolidation in their accounts.

Cannot believe that the HCM management could be happy about this - all of their recent share options will be under water and they have lost financial credibility with the group of shareholders who will be their major shareholders going forward.

Basically a flawed , badly timed and poorly executed move. No need for this to have happened . If this was advised by Morgan then shame on them , if it was forced by the group then they have just shot themselves ( and us ) in the foot . Either way not very impressive.

[steeplejack] 28/6/2019 18:58

Might of made an error buying more here.The price on NASDAQ continues to fall back to near $22.It would suggest that the book building process isn’t going that well.Whether they decide to lower the placing price in response to lukewarm demand is always possible but that simply confirms that the seller and advisors are twits.We’ll see next week but this persisting discount to the $24 announced placing price is a worry.Hutchinson have made the sale and it’s Morgan Stanley who are on the hook as sole underwriter at $24 Also,Morgan Stanley must of reckoned and advised that they could sell the higher 12m ADS figure and assured they could get it away or were at least prepared to take the risk as sole underwriter.Oh well,the stock indigestion will clear in time.

[my retirement fund] 28/6/2019 16:36

Is this trading at a decent PE ratio like erm say Glaxo? Or is it still valued on a pie in the sky wet ur fingers job lolLOL !!!

[steeplejack] 28/6/2019 16:34

If Hutchinson go below 50% then you'd think that the attractions of HCM would be enhanced for investors.I know I'd prefer it.

[shaker44] 28/6/2019 16:30

Bought a few @ 359. Surely more upside than downside

[shaker44] 28/6/2019 16:00

I agree. Seems the most likely scenario

[steeplejack] 28/6/2019 15:50

Offer closes on Tuesday next,2nd July.So,if they get it away -which they bloody should at $24 (378p at current xrates)-a discount of 20% to last night’s close,then the price will probably slowly digest a placing of some 10% equity and edge better.That’s my naive logic and I’ve bought a few more.

[shaker44] 28/6/2019 15:34

Very frustrating. Invest in an apparently well managed business with a golden future and still take a huge kicking.
What now? Oversold or falling knife??

[steeplejack] 28/6/2019 14:53

Horrid....at a $24 placing price,the US market is suggesting there’s limited appetite for stock other than it’ll probably take Hutchinson below 50% assuming the extra allotment is snaffled..Maybe the NASDAQ is peeved that it’s being regarded as a substitute for the planned HK listing which is now on hold.Morgan Stanley might not of correctly read the US market at the current time.Whatever,this looks like a bit of disaster.Why does Hutchinson want to push ahead with such a discounted sale of stock.Extraordinary and stupid but I suppose it clears the air.

[steeplejack] 28/6/2019 13:35

Whether the additional 1.3m ADS are taken will probably dictate how the shares behave post the placing.Friday seems an odd day to elect to do the exercise.I'm not sure whether it indicates that the whole process could be over quite speedily or whether it could drag on for a few days,well into next week.

[the grumpy old men] 28/6/2019 10:45

Hutchison China MediTech Ltd. (HCM.LN) traded down Friday morning after the company said its largest shareholder, Hutchison Healthcare Holdings Ltd., intends to offer 8.5 million American depositary shares.

Shares in London at 0730 GMT were down 13% at 400 pence.

The company said each ADS represents five ordinary shares, par value of 10 cents each of Hutchison China MediTech.

Hutchison Healthcare, a subsidiary of CK Hutchison Holdings Ltd. (0001.HK), has granted the underwriter, Morgan Stanley & Co. LLC, a 30-day option to purchase 1.3 million additional ADS at the offer price minus costs. If the overallotment option isn't exercised, it will own around 53.8% of Hutchison China MediTech.



Write to Adriano Marchese at [e-mail]



(END) Dow Jones Newswires

June 28, 2019 03:57 ET (07:57 GMT)

[steeplejack] 28/6/2019 08:40

The MMs need a lead from the US and will retreat behind the shield of an absurdly wide nominal spread until this afternoon.

Simply put,there’s around 6.4% of the equity to be placed with a potential further over allotment which could amount to around another 1% of the equity.So we’ve got some 7.4% of equity to be found a home.That should sate demand for awhile.All up to Morgan Stanley to build the book and establish a placing price.I wonder to what extent the company has been quietly preparing institutional buyers for this offering diverting the roadshows originally planned for Hong Kong.Anyway,we won’t get a sensible share price until NASDAQ opens.I guess the discount might be up to 10% to last nights close,equating to something around perhaps $27-28 ADS (420-30p).London with a nominal offer at 420p seems to be suggesting as much.

[nhb001] 28/6/2019 08:32

Correct me if I am wrong but on a secondary offering the company gains no new funds. Therefore, the share price drop is telling us the major holder will need to discount to market price to get this away.

[sportii] 28/6/2019 08:26

Tried a dummy buy few minutes ago- got a quote of 499p. Not surprisingly, a dummy sale offer is 378p!

[nerdofsteel] 28/6/2019 08:23

Sportii, agreed, I wonder whether the HK listing delay brought this forward

Whilst this is becoming a familiar feeling, we have a late stage pipeline that is so large it needs a lot of cash to get some of them over the line. I think the rewards will be significant for long term Shareholders.

[nhb001] 28/6/2019 08:15

Bottom line is the share price is down 15% and we got screwed again. This is becoming a familiar feeling with this company.

[sportii] 28/6/2019 07:54

NOFS, intended Secondary offering by HHHL was indeed announced weeks ago. But, an exact date wasn’t disclosed. Secondary offering means previously held shares BY the major shareholder, in this case HHHL.
(Hopefully, not new shares IPO which leads to dilution of market valuation.

[nerdofsteel] 28/6/2019 07:24

Secondary offering of ADS's which wasn't expected at all, I wonder if the delay in the HK listing has prompted this offering?