China Story

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CBPO -- USA Stock  

USD 110.50  0.50  0.45%

Denali Therapeutics would continue recover faster as its shares surged to 2.68 percent against China Biologic's 0.9719%. As many investors are getting excited about healthcare space, China Biologic and Denali Therapeutics may be going in opposite directions. We are going to inspect some of the competitive aspects of both China and Denali.
Published over a month ago
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Are retail investors picking up China Biologic (NASDAQ:CBPO) or Denali Therapeutics?
By analyzing existing basic indicators between China Biologic and Denali, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Denali with a short position in China Biologic. Check out our pair correlation module for more information.

Let's begin by analyzing the assets. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. China Biologic has an asset utilization ratio of 97.3 percent. This suggests that the company is making $0.97 for each dollar of assets. An increasing asset utilization means that China Biologic Products is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as China or Denali is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is China Biologic's Liquidity

China Biologic financial leverage refers to using borrowed capital as a funding source to finance China Biologic Products ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. China Biologic financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between China Biologic's total debt and its cash.

Correlation Between China and Denali Therapeutics

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding China Biologic together with similar or unrelated positions with a negative correlation. For example, you can also add Denali Therapeutics to your portfolio. If Denali Therapeutics is not perfectly correlated to China Biologic it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When China Biologic for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down. Please check pair correlation details between CBPO and DNLI for more information.

Note

Are you currently holding both China Biologic and Denali Therapeutics in your portfolio? Please note if you are using this as a pair-trade strategy between China Biologic and Denali Therapeutics, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Exercise or conversion by Kuo Yuyun Tristan of 5000 shares of China Biologic subject to Rule 16b-3

Legal trades by China Biologic insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
China Biologic Products insider trading alert for exercise of non-qualified stock option (right to buy) by Kuo Yuyun Tristan, CFO, on 15th of June 2020. This event was filed by China Biologic Products H with SEC on 2011-12-14. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down China Biologic Indicators

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now check China Biologic revenue. Based on the latest financial disclosure, China Biologic Products reported 536.55 M of revenue. This is 92.96% lower than that of the Healthcare sector and 27.78% lower than that of the Biotechnology industry. The revenue for all United States stocks is 94.31% higher than that of the firm. As for Denali Therapeutics we see revenue of 27.73 M, which is 96.27% lower than that of the Biotechnology

China536.55 Million
Sector742.91 Million
Denali27.73 Million
536.5 M
China
742.9 M
Sector
Denali

China may start a recoup in September

The value at risk is down to -1.26 as of today. China Biologic Products has low volatility with Treynor Ratio of 0.09, Maximum Drawdown of 6.64 and kurtosis of 3.64. However, we advice all investors to further analyze China Biologic Products to make certain all market information is desiminated and is consistent with the current expectations about China Biologic upside potential.

Our Final Perspective on China Biologic

When is the right time to buy or sell China Biologic Products? Buying stocks such as China Biologic isn't very hard. However, what challenging for most investors is doing it at the right time. Proper market timing is something most people cannot do without sophisticated tools, which help to isolate the right opportunities, deliver winning trades and diversify portfolios on a daily bases. With a relatively neutral outlook on the latest economy, it is better to hold off any trading of China as the current risk-reward utility is not appealing enough. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to China Biologic.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of China Biologic Products. Please refer to our Terms of Use for any information regarding our disclosure principles.

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