Another Bank Failure, Wuhan Rent Protest, China Pharma Ingredient Industry Ramps Up

Bloomberg: Wuhan Rent Protest Shows Unrest Brewing in China After Lockdown
Sitting down about one meter apart, the shop owners on Friday sat or kneeled outside the Grand Ocean Department Store, wearing masks and holding placards as police monitored. A day earlier they chanted “Exempt rental for a year, or refund the lease” in videos uploaded on the Chinese social media platform Sina Weibo that were quickly censored.

“Can’t survive” said a sign held by one woman who rented a stall at Grand Ocean, which also called on the landlord to return the rent and security deposit during the period of the lockdown.

The woman said the property developer in charge of the mall, which translates to World City, should exempt rent for them because 99% of protesters are small shop owners and they haven’t had any business since the virus outbreak. Most neighborhoods in the city are still facing string restrictions on movement and there’s little business traffic.
21st Century: “抢购”中国原料药:短期价格小幅上涨,海外订单激增. API industry is the Active Pharmaceutical Ingredients industry.
European Union countries, the United States and other governments have begun to respond to the risk of drug shortages in the epidemic. In China, where the epidemic is gradually being controlled, more and more API manufacturers have resumed production, and a variety of APIs with the "Made in China" label have opened the global chain of industrial chains.

"Since the end of last year, the demand for paracetamol has increased in foreign markets, and the orders of many domestic API companies have increased by 30% -50%. The unit price of some exported APIs has also increased by as much as 20%. But in the long run Seeing that APIs still belong to the traditional chemical industry with low gross profit, the entire industry still needs to think about changes under the background of pressure. "On April 9, a person in charge of APIs in East China said to the 21st Century Business Herald reporter .
Chinese firms are looking to consolidate their control over these products:
"China ’s experience in the prevention and control of new coronary pneumonia epidemics has been widely recognized globally. The" New Coronavirus Pneumonia Diagnosis and Treatment Program "will also increase the international market demand for related drugs, including raw materials, and the demand for other drugs directly related to the prevention and treatment of pneumonia will also increase. China's export of related APIs may usher in a short period of outbreak. "Zhu Renzong, deputy secretary general of China Chamber of Commerce for Import and Export of Pharmaceuticals and Health Products, analyzed.

The popularity of APIs has continued in recent years. Despite the impact of the new crown epidemic, in recent years, the international market has experienced strong demand for APIs, and China's API exports have reached new highs. According to statistics from the China Chamber of Commerce for Import and Export of Medicines and Health Products, in 2019, China exported 10.1185 million tons of APIs to 189 countries and regions in Asia, Europe and North America. The annual export volume reached 33.683 billion US dollars.

"Our APIs are specific for the treatment of hypertension, and the product line is relatively fixed. The impact on the market depends on the release of the quarterly report." Huahai Pharmaceutical's Dong Mi Office told the 21st Century Business Herald reporter. A raw material pharmaceutical company in East China said that the market is changing drastically, and the concentration of this industry is further improving, so there is a logic of product price increase in the long run.
Chinese companies want to move up the value added chain. The next target will be wiping out generic drug makers in other countries.
Minsheng Securities Research pointed out that the long-term logic of the domestic characteristic API industry is the process from low-lying dividends to global profitability. The core premise is to establish the cost advantages of intermediates, raw materials and preparations in China's scale advantage of raw materials, thereby enhancing global competitiveness. During this process, the domestic market is being regulated and the low-end production capacity of the generic drug industry is cleared. The process is also the long-term core logic of this industry.

The technical strength of domestic APIs needs to be further improved. Compared with overseas mature generic drug companies, the horizontal expansion of products of domestic API companies is not rich enough, and product development is relatively concentrated. The basis of product layout may affect the realization of the above logic at a certain stage. Rhythm. There is continued investment value in the medium and long term, but the fundamentals of the realization of the rhythm may be relatively different due to the development stage of each company, the rhythm of the production capacity layout, the difference in the competitive environment facing the stock business, and the technical strength.
Caixin: Bank of Gansu Is Next in Line for State Bailout
According to Caixin reporters, the risk treatment of Gansu Bank started as early as September 2019 and was implemented at the end of March 2020. Recently, it has accelerated due to market fluctuations. Supervisors close to Gansu Bank pointed out that this time, Gansu Province will increase capital and expand shares of Gansu Bank through the provincial financial platform, and completely dispose of existing risk assets of Gansu Bank through market-oriented financial restructuring. Disposal of losses is shared by new and old shareholders and local governments in accordance with the principle of marketization. Due to the weak financial strength of Gansu Province, the central bank will provide special loans for staged support. This disposal method is similar to Hengfeng Bank .

  On April 1, the Bank of Gansu's single-day plunge fell by 43.48% on the day, from the opening of 1.155 Hong Kong dollars / share to 0.65 Hong Kong dollars / share, with a price-to-book ratio of only 0.25 times, making it the only "cent stock" in the banking sector of the Hong Kong Stock Exchange. ". According to the Gansu Bank announcement and Caixin reporters, it was the bank ’s current largest H shareholder, Huaxun International, which was forced to close the position on that day. The company pressed 100 million shares of Gansu Bank to the brokerage. This loan was originally in March. It expires on the 1st, and it has not been forced out after a month of renewal, and the sharp drop in the liquidation triggered a chain reaction, which caused other shareholders such as Zhongkechuang to also be forced out (see Caixin I News) | Financial Personnel · April 4, 2020, " What is the future of Gansu Bank after the shareholder is quelled ")

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