Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>USD1.6bn of inflows last week were mainly driven by financials and consumer staple sectors.</li>
<li>We highlight inflows into Moutai, East Money, Ping An Insurance, Wuxi Apptec and BYD.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine.
USD1.6bn of inflows last week were mainly driven by financials and consumer staple sectors.
We highlight inflows into Moutai, East Money, Ping An Insurance, Wuxi Apptec and BYD.


Northbound Flows: Moutai, East Money, Ping An Insurance, Wuxi Apptec, BYD

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine.</li>
<li>Inflows into consumer staple were offset by the outflows from materials.</li>
<li>We highlight inflows into Moutai, East Money, Gree, Wuxi Apptec, and Tongwei.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine.
Inflows into consumer staple were offset by the outflows from materials.
We highlight inflows into Moutai, East Money, Gree, Wuxi Apptec, and Tongwei.


Northbound Flows: Moutai, East Money, Gree, Wuxi Apptec, Tongwei

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Our interpretation of WuXi AppTec's proposed disposal is that its founder affiliates could be concerned about the Company’s future prospects, so they choose to offload in advance.</li>
<li>A possible reason for WuXi AppTec to highlight the optimism about its performance and deliver a prosperous outlook/positive signal to the market is to "shield" the implementation of its proposed disposal.</li>
<li>The risk is out of proportion to the opportunity. We advised investors to catch the rebound and offload rather than hold long term. It’s just temporary rebound not complete reversal.</li>
</ul>


Our interpretation of WuXi AppTec's proposed disposal is that its founder affiliates could be concerned about the Company’s future prospects, so they choose to offload in advance.
A possible reason for WuXi AppTec to highlight the optimism about its performance and deliver a prosperous outlook/positive signal to the market is to "shield" the implementation of its proposed disposal.
The risk is out of proportion to the opportunity. We advised investors to catch the rebound and offload rather than hold long term. It’s just temporary rebound not complete reversal.


WuXi AppTec (603259.CH/2359.HK) - Behind the Proposed Disposal of A Shares

<ul>
<li>The CARVYKTI commercialization will bring GenScript increasing revenue and cash flow. Together with the rapid growth of GCT CDMO, it is expected to see gradual improvement in GenScript’s financial performance.</li>
<li>The complex international relations, geopolitical conflicts and anti-globalization risks could weigh on bullish sentiment in the short term or cause stock prices to fluctuate wildly.</li>
<li>In the long term, GenScript’s “all-in” on GCT area enables it follow the industry trend closely. So,GenScript have the exponential growth potential in valuation, with possibility of surpassing WuXi Biologics.</li>
</ul>


The CARVYKTI commercialization will bring GenScript increasing revenue and cash flow. Together with the rapid growth of GCT CDMO, it is expected to see gradual improvement in GenScript’s financial performance.
The complex international relations, geopolitical conflicts and anti-globalization risks could weigh on bullish sentiment in the short term or cause stock prices to fluctuate wildly.
In the long term, GenScript’s “all-in” on GCT area enables it follow the industry trend closely. So,GenScript have the exponential growth potential in valuation, with possibility of surpassing WuXi Biologics.


Genscript Biotech - Commercialized CAR-T & Strong CGT CDMO Indicate Exponential Growth in Valuation

<ul>
<li>It’s understandable to take advantage of current market value and reserve capital in advance.Considering potential risks, how low the price of proposed issuance has to be to feel “safe enough”?</li>
<li>Yingyi’s illegally reducing its holdings of WuXi AppTec could be a signal– Yingyi and other shareholders/executives are not confident in WuXi AppTec’s outlook, who may not regain its glory days.</li>
<li>We recommend investors to view this proposed issuance rationally. If investors want to trade, a good strategy is to catch rebound after plunge, although the temporary rebound does not last.</li>
</ul>


It’s understandable to take advantage of current market value and reserve capital in advance.Considering potential risks, how low the price of proposed issuance has to be to feel “safe enough”?
Yingyi’s illegally reducing its holdings of WuXi AppTec could be a signal– Yingyi and other shareholders/executives are not confident in WuXi AppTec’s outlook, who may not regain its glory days.
We recommend investors to view this proposed issuance rationally. If investors want to trade, a good strategy is to catch rebound after plunge, although the temporary rebound does not last.


WuXi AppTec (603259.CH/2359.HK)- The Private Placement and Shanghai Yingyi’s Illegal Share Reduction

China

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (603259 CH)

Northbound Flows: Moutai, East Money, Ping An Insurance, Wuxi Apptec, BYD

We highlight weekly northbound Hong Kong connect inflows into Moutai, East Money, Ping An Insurance, Wuxi Apptec and BYD.

Ke Yan, CFA, FRM

Northbound Flows: Moutai, East Money, Gree, Wuxi Apptec, Tongwei

We highlight northbound Hong Kong Connect inflows into Moutai, East Money, Gree, Wuxi Apptec, and Tongwei from offshore investors.

Ke Yan, CFA, FRM