To The Moon

The day is winding down as I write this post. It probably doesn't matter if it is posted today or tomorrow. I did my second day of jog. It was not easy, especially with the meeting dragging past lunch hour, if there is such a thing [Tongue]  [Duh]  It is nevertheless worth the slog...

Today's sharing is about a Chinese based company. No, it is not Tencent or Alibaba. It is not even the latest hot potato $POP MART(09992)$ . I am one for the cold dish and yes, it is best served cold than piping hot 🔥!

I am introducing $ASCLETIS-B(01672)$ It has a US equivalent of $Ascletis Pharma Inc.(ASCLF)$ but I won't recommend since it is thinly traded. It is a relatively small cap company that recently caught to attention of investment community. It hits an recent high of 9.28, a level not seen since its listing in Aug 2018.

After hitting its recent high, the shares price has started correcting. Today, the selling suddenly accelerates, dropping an initial 20% with the latest results release. Not surprising as the loss widened year on year to reach ¥300M from ¥144M.

It would appear strange that Ascletis should hit a recent high if a widening loss. What's cooking?

The reason for the shares price increase was due to good results from a weight loss drug trial. Besides reporting a positive topline phase 1B result in Australia for its weight loss drug candidate ASC47 monotherapy, US FDA has also cleared its application for ADC47 combination with semaglutide for treatment of obesity. 

We all know what it could mean to be successful as an anti-obesity drug. Just look at Novo Nordisk and Eli Lily. Alternatively, ask traders or investors who were holding$Hims & Hers Health Inc.(HIMS)$  what happened when it losing the knockoffs of the equivalent drug!

Yes, Ascletis is still not ready with the drug development, at least not as a standalone. The huge potential cannot be denied. Besides this anti-obesity drug, it is also developing other drugs for Oncology and NASH. They are all big if anyone of those turn into success, so no, it is not just a one-hit wonder.

As it has been heavily involved in drug development, loss is expected. Heavier loss is also not unexpected. Drugs 💊 development and IP protection are expensive. It is a long game if you are keen to put your one foot down. Importantly, you must be able to ride the 🌊 and ignore the noises. I have been sitting there since pre-COVID, so I know.

Lastly, I have shared the chart. It is an interesting chart. You can see that in Mar this year, something similar to today's trading pattern emerged. A big dip to ¥5.4 before staging a remarkable recovery. That is how it got to reach its recent high of ¥9.28. I did not panicked then. I am not panicking now. Although the price increase has slowed a bit, the resilience today is worth taking note. The price closd above the supporting trend line, which is excellent. 

The only concern is the accompanying increase in volume, meaning a lot of weak hands have thrown. It is actually a good thing. It's the same as Mar this year. The weak hands exited, given the company's share price an opportunity to fly! Today also gives a golden chance for new investors to come in, so the buyers' risk will be lower.

I am not moving away anytime soon. I am in a good position as I am playing with the banker's money 💰. [Duh]  [Sly]  [Tongue]  [Chuckle]  [Evil]  I had took some 💰 off the table a couple of years back when the stock price moved up, so effectively those holdings are free.

This volatile period actually reminds me what actions I should be taking. You can choose to do what I do. Take money off some of the weak performers (cut loss, take profits) and transit to stronger and more secured holdings. I do not about you, for me, it means more strong gold and silver miners and a few selected defend companies. Companies that are likely less affected by recession or even thrives in uncertainty. Exchanges like this during market downturn brings the valuation of both weak and strong companies closer together. It makes a lot of sense and the effort will make a big difference when the market crashes.

Until next sharing...

@Daily_Discussion @CaptainTiger @TigerStars