Dawnrays Pharmaceutical

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#1
Hi All, 

The writeup on Dawnrays Pharmaceutical. 

https://weightedresearch.substack.com/p/...price-like

Do give us your thoughts. 

Thanks.
Reply
#1
Hi All, 

The writeup on Dawnrays Pharmaceutical. 

https://weightedresearch.substack.com/p/...price-like

Do give us your thoughts. 

Thanks.
Reply
#2
thanks for sharing. ive got a stake in dawnrays. i largely agree with it. in a sense the pharma game has changed in china since the two invoice system and/or central procurement was introduced, so old margins cant be enjoyed any longer. my bet is essentially that the management team with its experience and wide network and alignment of interest can find a way to thrive in the new normal.

a few small comments. i like their relatively clean and straightforward org structure, makes the company ops easier to understand. i attended the agm last year and asked about their wealth management products, which have been increasing in amount lately. no one present could answer the question and the chair rang up some finance person (perhaps the CFO) and put him on speaker in front of the mic to answer in mandarin,basically giving assurance the products were safe stuff. that was a weird scene.
Reply
#2
thanks for sharing. ive got a stake in dawnrays. i largely agree with it. in a sense the pharma game has changed in china since the two invoice system and/or central procurement was introduced, so old margins cant be enjoyed any longer. my bet is essentially that the management team with its experience and wide network and alignment of interest can find a way to thrive in the new normal.

a few small comments. i like their relatively clean and straightforward org structure, makes the company ops easier to understand. i attended the agm last year and asked about their wealth management products, which have been increasing in amount lately. no one present could answer the question and the chair rang up some finance person (perhaps the CFO) and put him on speaker in front of the mic to answer in mandarin,basically giving assurance the products were safe stuff. that was a weird scene.
Reply
#3
(31-08-2020, 10:25 AM)ongweehiang Wrote: Hi All, 

The writeup on Dawnrays Pharmaceutical. 

https://weightedresearch.substack.com/p/...price-like

Do give us your thoughts. 

Thanks.

The business looks straightforward (pharma manufacturing), the financials looks okay, and the valuation looks cheap.

But an investor is required to have a high degree of technical and market knowledge of the company's products, to be able to understand the strength of the product's market position.

And if one does not know the cost structure, financial strength, etc of the competitors which Dawnrays is competing with, there is no way of knowing whether Dawnrays will have a long-term advantage over its competitors. Hence, there is no way of determining whether Dawnrays will perform better or worse in the future. Which also means that the investor is not standing on firm ground when judging the company's valuation.

I will put this in my 'too hard' pile.
Reply
#3
(31-08-2020, 10:25 AM)ongweehiang Wrote: Hi All, 

The writeup on Dawnrays Pharmaceutical. 

https://weightedresearch.substack.com/p/...price-like

Do give us your thoughts. 

Thanks.

The business looks straightforward (pharma manufacturing), the financials looks okay, and the valuation looks cheap.

But an investor is required to have a high degree of technical and market knowledge of the company's products, to be able to understand the strength of the product's market position.

And if one does not know the cost structure, financial strength, etc of the competitors which Dawnrays is competing with, there is no way of knowing whether Dawnrays will have a long-term advantage over its competitors. Hence, there is no way of determining whether Dawnrays will perform better or worse in the future. Which also means that the investor is not standing on firm ground when judging the company's valuation.

I will put this in my 'too hard' pile.
Reply
#4
@karlmarx, agree with your thoughts. This should usually go into the too hard pile. It took us 6 years of reading and understanding before we pulled the trigger on this. Hopefully, we have knew enough to make this a profitable position.

@BRT, glad to know that you attended the AGM last year. Personally, we had encountered a few funny situation with Chinese founders on our own. A few times, we immediately sold out of the company. The biggest risk for Dawnrays have to be fraud and that the wealth management product is non-existent but the insider purchase and the share buyback and repurchase do reassure us quite a bit.
Reply
#4
@karlmarx, agree with your thoughts. This should usually go into the too hard pile. It took us 6 years of reading and understanding before we pulled the trigger on this. Hopefully, we have knew enough to make this a profitable position.

@BRT, glad to know that you attended the AGM last year. Personally, we had encountered a few funny situation with Chinese founders on our own. A few times, we immediately sold out of the company. The biggest risk for Dawnrays have to be fraud and that the wealth management product is non-existent but the insider purchase and the share buyback and repurchase do reassure us quite a bit.
Reply


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