The "Big Brother" announcement led to a major event in the pharmaceutical investment community.
On March 13, Hengrui Pharmaceutical announced that it would repurchase the company's shares with its own funds, with a repurchase amount of between 6 and 1.2 billion yuan, and the repurchase was mainly used for employee stock ownership plans or equity incentives.
Because of this repurchase plan, Hengrui Pharmaceutical announced the latest position of the top ten shareholders, and people found that Hillhouse disappeared.
In the 2021 Hengrui Pharmaceutical Report, Hillhouse's HCM China Fund ranked 10th in the list of hengrui pharmaceutical's top ten shareholders by increasing its holdings of 6.7436 million shares.
According to the position disclosed at that time, Hillhouse held a total of 40.4619 million shares of Hengrui, accounting for 0.63% of Hengrui's total shares.
However, in the latest shareholding structure announced by Hengrui on March 18, Hillhouse disappeared in the position of the 10th largest shareholder, replaced by E Fangda, which held 32.944 million shares.
Market rumors say Hillhouse has cleared Hengrui. Because in July 2021, hengrui pharmaceutical stock price is still more than 60 yuan. However, Hengrui's stock price has recently fallen below 40 yuan, and at the close of trading on March 24, the stock price was only 37.64 yuan. The market value of the position fell by nearly 40%, and the general retail investors had a high probability of cutting meat and leaving.
Hillhouse is not a general retail investor, but the fact that the position reduction has already happened.
Seven years ago, the valuation has fallen sharply
The fate of Hillhouse and Hengrui Pharmaceutical began in 2015, and it was also this year that Hengrui Pharmaceutical opened a highlight moment.
In September 2015, Hengrui Pharmaceutical sold a product to an overseas company for nearly 800 million US dollars, which was the first case of license out by a domestic pharmaceutical company. Since then, Hengrui has become a representative of domestic innovative pharmaceutical companies and is sought after by capital.
This year, Hillhouse's HCM China Fund bought 16.6181 million shares of Hengrui Pharmaceutical, accounting for 0.85% of the total shares, becoming one of the top ten shareholders of Hengrui Pharmaceutical. Subsequently, Hillhouse has always ranked in the top ten, and in the second and third quarters of 2016, it has also increased its holdings.
However, medicine is a policy-strong related industry. In 2017, when Hengrui Pharmaceutical released its mid-report, Hillhouse suddenly disappeared from the list of top ten shareholders. In this year, the pharmaceutical field has changed a lot, and policies such as medical insurance control fees, two-invoice system, and restrictions on Traditional Chinese medicine injections have been introduced.
Looking back on the years afterwards, the fluctuations in industry policies at that time can only be regarded as drizzle, and many unknowns brought about by pharmaceutical industry policies have only just begun.
Hillhouse's method is quite sophisticated, and the chill immediately turns around; on the other hand, money has been earned - from Hillhouse's first ranking among the top ten shareholders of Hengrui, to its withdrawal from the top ten in 2017, Hengrui Pharmaceutical has risen by 22%.
It was not until the end of June 2021 that Hillhouse appeared again in the list of the top ten shareholders of Hengrui Pharmaceutical. But this time Hillhouse did not last long, and after two quarters in the list of major shareholders, it disappeared again.
There is a view in the market that even if Hillhouse clears Hengrui, it is reasonable. After all, in the past year, Hengrui's stock price has cut from a maximum of nearly 100 yuan, while Hillhouse's increase in holdings in 2021 is almost above 70 yuan. Even if the upfront holding cost is very low, with the current stock price of about 37 yuan, Hillhouse has almost no profit.
In fact, the entire pharmaceutical sector is cold in the second half of 2021. Holding any white horse stock is likely to suffer a stock price cut in the past half a year.
This is not a problem for one company, but the valuation center of gravity of the entire industry has shifted downward.
The significance of benchmarking is weakened, and the industry must find a new direction
In the field of pharmaceutical investment, Hillhouse is the benchmark in recent years, so its every move has aroused the attention of the industry.
Since the second half of 2021, the news of "Hillhouse reduction" has been circulating everywhere, at least withdrawing from the list of top ten shareholders released by Tigermed, Gloria Ying, Aier Ophthalmology and so on.
But Hillhouse did not leave the pharmaceutical industry. According to hillhouse position information released by the U.S. Securities and Exchange Commission, as of the end of 2021, there are still three Chinese biopharmaceutical companies in Hillhouse's top ten heavy stocks, namely BeiGene, Legendary Biologics, and Tianjing Biologics.
However, even if it loses money, Hillhouse has not cooled down on all investment targets and has not yet made any secret of its preference for BeiGene. In August 2020, Hillhouse partner and co-chief investment officer Yi Nuoqing said in an interview with the media: "We invested in BeiGene and have not sold a single share so far. ”
According to the BeiGene A-share prospectus, as of November 2021, Hillhouse still ranks among the top three shareholders with a shareholding ratio of 12.05%.
Legendary Creatures, hillhouse, increased its capital significantly after the third quarter of last year. At that time, legendary bio's CAR-T product Cidaki Olense was being declared for listing in the United States, and was officially approved by the end of February this year.
Hillhouse's other celestial creature has core products such as CD47 target monoclonal antibody, PD-L1 and 4-1BB dual antibody, which have certain potential.
In the Chinese pharmaceutical investment industry, Hillhouse was the first to come up with the "PD-1 concept", and in 2013, Zhang Lei locked the next investment sector on PD-1 after visiting Boston, the "Biological Silicon Valley" in the United States. Around 2015, Hillhouse invested in Hengrui Pharmaceutical, BeiGene, Innovent Biologics and Junshi Biologics.
The four companies won by Hillhouse later became the "four kings" of the domestic PD-1. Although PD-1 has been flooded at present, the industry has commented on the progress of the four PD-1s, and they are all in their own operations.
But onlookers must not forget: no matter who wins or loses the "Four Heavenly Kings", Hillhouse is the all-you-can-eat "winner".
Today, Hillhouse has reduced its holdings in Hengrui and increased its holdings in companies such as Legend, while still re-positioning In BeiGene, the logic behind it is no longer as simple and direct as it was then, and it is difficult to see the big trend.
In China's pharmaceutical industry, a real "long slope thick snow" enterprise has not yet been born. Hillhouse, who has succeeded once in a while, must also prove himself again, which is the current situation of China's pharmaceutical industry.
(Image courtesy of Visual China)