Hutchmed (china) Share Discussion Threads

[dbadvn] 03/7/2019 16:48

Still around 3.7m shares overhanging the market, but definitely better.

[steeplejack] 03/7/2019 14:17

Not a complete disaster then.Prudential had around 3.3% before so they've taken a further 1.8% .Interestingly Mitsui & co ltd now have 3.8%,they might have bought that in the placing.

[steeplejack] 02/7/2019 15:27

It must be presumed that the issue is about to be left with the underwriter Morgan Stanley.Maybe in its entirety or close to. They have $6.1m of underwriting fees but assuming no one wants to pay $24 for stock (they can buy at $21-50 in the market) Morgan Stanley will be running a loss on their position of some 10% or around §28m.So what next?Morgan Stanley-having kicked the “butt” of the unfortunate banker who came up with the idea of bidding for this deal -will have to make a decision.They could cut their position by having a fire sale,getting the bloody thing off their books,afterall we’re talking $288m of exposure here.They do some diligence and try to find a price level that they can get the stock away,perhaps $20....$18.....any bids?Or they just sit on the stock and hope for better times.They’ll overhang the stock of course.I have rarely encountered such a self inflicted disaster in the markets.The parent has beaten up its protege.

My guess is that the regulators won't want Morgan Stanley sitting on this stake.The funding is onerous so the liklihood is that Morgan Stanley will feel compelled to sell.The sharks will start to circle and it could all be over quicker than one might expect.Thereagain,this is all pure speculation on my part.One thing i would bet on though,Goldmans and Merrills will be watching with interest.

[nerdofsteel] 02/7/2019 13:20

At only $24 it does prompt questions regarding some of the late stage drug candidates, as I cannot fathom why they could not achieve a better price. It may be something to do with CKH's accounting periods and wanting to get it off their balance sheet as a subsidiary but as you say steeplejack, the process seemed very rushed and the fallout is significant. I remain a committed long term Investor with a large holding but I am minded to sit on the sidelines before committing more financial resources to my investment.

[steeplejack] 02/7/2019 09:08

Originally,the two brokers behind the Hong Kong listing were Goldman’s and Merrill’s.

“Goldman Sachs (Asia) L.L.C. and Merrill Lynch Far East Limited (in alphabetical order) are the joint sponsors of the Offering.”

Now,they appear to have been ousted by Morgan Stanley.It looks to me like something of an investment banking coup.Morgans have approached Hutchison and said they’ll underwrite a placing (all on their own) at $24 and Hutchinson accepted.Hutchison will get their money.If the parent knew something untoward,remember they’ll continue to have a 50% interest and will be badly punished accordingly.The whole process seems rushed and unprepared and the price has suffered.It will recover in time but some serious PR will be required.

[shaker44] 02/7/2019 03:49

This sale seems to have been made in a rush. Why? Normally time would be planned in to allow the book runner to sell the 'why' story, sound out institutions, and achieve an orderly placing prior to public announcement. The price drop suggests the story behind the sale is not credible, leaving a sense that the seller has knowledge of, for example, a significant failing drugs trial, so purchasing institutions are naturally not keen. Maybe Morgan Stanley is doing a lousy job, but the whole thing smacks of mismanagement.
As far as I know, HCM prospects are unchanged, but the price is off almost 25%.
Crazy

[nerdofsteel] 01/7/2019 17:00

I agree, very disappointing, I have been buying for years but would have held back in the last 12 months if I'd known CKH were going to execute in this manner.

[its the oxman] 01/7/2019 16:38

Guess we need the offering completed before we see any move in the price.

[its the oxman] 01/7/2019 11:22

Just got to hope story is intact and we get some positive newsflow. Be nice to think we could at least recover above 400p.

[steeplejack] 01/7/2019 10:01

What we need is for Morgan Stanley to trigger the extra allotment clause confirming excess demand for the placing.If that occurred,the shares would move towards the equivalent U.K. share price of $24 ie 380p.That should provide a base for a steady recovery.

[nerdofsteel] 01/7/2019 09:49

Let's hope the NDA submission for Surufatinib and getting Fruquintinib on the NRDL are all seen as positives by the market

[nerdofsteel] 01/7/2019 09:47

I would guess the roadshows are aimed at Institutional Investors, the JPM meeting would have been attended by institutions, Fund Managers and Brokers etc

[sportii] 01/7/2019 08:34

Good to know about Company’s roadshows in China/HK. Are these aimed at Chinese investors and fund managers? Or, is it just to highlight the achievements of the company in developing new drugs? Or, both?

Someone should ask the directors/management about interests among Chinese investors to invest in this company.

[its the oxman] 01/7/2019 08:22

Got to be the time to buy. Expecting this to punch higher over the next few weeks.

[nerdofsteel] 30/6/2019 08:51

The Company has been doing a roadshow in HK and China. Lets hope we do not have any form of overhang here. The future prospects are fantastic but this disregard for smaller shareholders by CK Hutchison is not helpful. We now need significant popeline progess, good H1 results and some great Fruquintinib sales numbers.

[steeplejack] 29/6/2019 13:07

Given the amount of dollar denominated US bonds bought by the Chinese,I would have thought they’d be only too happy to buy a $denominated Chinese pharma company.This is a shambles but in due course it might prove be an excellent opportunity to buy in.I’m sure that’s what Morgan Stanley are saying.....especially given they’re the sole underwriter at $24.This placing is going to happen,it’s just a question of who ends up holding the stock!Come Tuesday,it’ll be interesting to see the wording re subscription.Trouble is,brokers are inveterate liars,’fully’ subscribed could well mean that a substantial slug of stock just gets left with Morgan Stanley (If stock gets left with the underwriters below the offer price ,it’s called a “stick”).A stick can overhang the price for months to come.Re the earlier post,I’m sure Morgan Stanley will be contacting Chinese investors.

[sportii] 29/6/2019 12:17

This might sound strange.
Is chi-med getting good coverage in Chinese financial news media?
Is the management doing any ‘homework̵7; in China (similar to CEO’s interviews on Bloomberg etc.,). The reason for my query is the recent announcement of linking SHANGHAI SE to LSE, allowing Chinese investors to invest in LSE listed stocks.
The present share price is a great opportunity for investors in China.

[nerdofsteel] 29/6/2019 12:09

The divestment by HHHL/CK was supposed to have occured at the time of the HK listing. As that appears delayed CKH should have delayed their divestment but instead seem to have carried on without any regard for HCM Shareholders. Ive been imvested for 10 yrs and will be for a similar period but Im unhapoy with how a majority Shareholders actions impact smaller Shareholders so badly. I do not blame HCM as they are effectively bystanders in this.

[nerdofsteel] 29/6/2019 12:07

The divestment by HHHL/CK was supposed to have occured at the time of the HK listing. As that appears delayed CKH should have delayed their divestment but instead seem to have carried on without any regard for HCM Shareholders. Ive been imvested for 10 yrs and will be for a similar period but Im unhapoy with how a majority Shareholders actions impact smaller Shareholders so badly. I do not blame HCM as they are effectively bystanders in this.

[dbadvn] 29/6/2019 11:30

Yes, whatever way you look at it timing, price, execution it is a mess....certainly going to make institutional investors wary for quite some time so the sooner trade talks are agreed and a new set of Chinese shareholders come on board the better.