HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Innovent Biologics Inc / Equity Bottom-Up

<ul>
<li>We analyzed the 2021 national medical insurance negotiation and the related outlook of Innovent’s PD-1. </li>
<li>The concerns are still there. For example, to what extent the industrial structure of these new layout can show the development potential of the Company in the future? </li>
<li>Investors could choose to take advantage of the positive momentum in the short term, but are recommended to “reconsider” in terms of the long-term outlook.</li>
</ul>


We analyzed the 2021 national medical insurance negotiation and the related outlook of Innovent’s PD-1. 
The concerns are still there. For example, to what extent the industrial structure of these new layout can show the development potential of the Company in the future? 
Investors could choose to take advantage of the positive momentum in the short term, but are recommended to “reconsider” in terms of the long-term outlook.


Innovent Biologics Inc (1801.HK) - The PD-1 Outlook and Other Concerns

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Event-Driven

<p>For our next Webinar, we're excited to welcome back Insight Provider <a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a>, who will cover the upcoming rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> as it pushes towards its target of 80 index members by mid-2022.</p>
<h3>The webinar will be hosted on Wednesday, 17 November 2021, 17:00 SGT/HKT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=85212464246" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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<p>Brian Freitas is a highly experienced ex-delta one trader with over 17 years of experience. He was previously with Barclays, Macquarie, Credit Suisse, and BNP Paribas.</p>
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For our next Webinar, we're excited to welcome back Insight Provider Brian Freitas, who will cover the upcoming rebalance of the Hong Kong Hang Seng Index (HSI INDEX) as it pushes towards its target of 80 index members by mid-2022.
The webinar will be hosted on Wednesday, 17 November 2021, 17:00 SGT/HKT.



Register for the Webinar here




Brian Freitas is a highly experienced ex-delta one trader with over 17 years of experience. He was previously with Barclays, Macquarie, Credit Suisse, and BNP Paribas.


Smartkarma Webinar | Potential Inclusions to the Hang Seng Index (HSI INDEX)

<ul class="">
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> recently raised its full-year guidance, indicating the certainty of future performance growth.</li>
<li>The high quality of profit, strong global business layout, capacity, supply chain and technology platforms has helped the Company establish high moat.</li>
<li>The “reflection arc” of domestic negative policy impact, the increasing labor cost and other concerns should also be aware of by investors.</li>
<li>Like <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>, investors are advised to get prepared in advance. </li>
</ul>



Wuxi Biologics (2269 HK) recently raised its full-year guidance, indicating the certainty of future performance growth.
The high quality of profit, strong global business layout, capacity, supply chain and technology platforms has helped the Company establish high moat.
The “reflection arc” of domestic negative policy impact, the increasing labor cost and other concerns should also be aware of by investors.
Like WuXi AppTec Co. Ltd. (2359 HK), investors are advised to get prepared in advance. 


Wuxi Biologics (2269.HK) 2021Q3 - The Strength and the Concerns Behind the New Full-Year Guidance

Thematic (Sector/Industry)

<p><strong>Industry viewpoints:</strong></p><ul>
<li>The national medical insurance negotiation is coming soon.</li>
<li>Last Friday, a new document about the VBP on insulin was released, and the bidding would start on November 26.</li>
<li>At some point next year, we may see some slowdown in the growth of investment and financing transmitted from the industry and primary market as well as a slowdown in the growth of CXO orders. </li>
</ul><p><strong>Company news:</strong></p><p style="text-align: start;">News about the updated progress on new drugs of <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a> and <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a></p><p><strong>Market review:</strong></p><p style="text-align: start;">Last week, stock price for healthcare sector in A share decreased 1.35%, while CSI 300 decreased 1.35% over the same period of time.</p><p><strong>Risk disclosure:</strong> </p><p style="text-align: start;">Policy risk, R&amp;D risk, Company risk and COVID-19 risk.</p>

Industry viewpoints:
The national medical insurance negotiation is coming soon.
Last Friday, a new document about the VBP on insulin was released, and the bidding would start on November 26.
At some point next year, we may see some slowdown in the growth of investment and financing transmitted from the industry and primary market as well as a slowdown in the growth of CXO orders. 
Company news:News about the updated progress on new drugs of Innovent Biologics Inc (1801 HK), Jiangsu Hengrui Medicine (600276 CH) and Antengene (6996 HK)Market review:Last week, stock price for healthcare sector in A share decreased 1.35%, while CSI 300 decreased 1.35% over the same period of time.Risk disclosure: Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly (Nov.5) - Final Two Domestic Policy Risks, Outlook of China CXO Industry

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>Hang Seng Indexes will announce the results of the December 2021 review of the Hang Seng Family of Indexes on 19 November. The constituent changes will be effective after the close of trading on 3 December.</p><p>The review period for the December rebalance ended on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>.</p><p>With Hang Seng Indexes looking to get up to 80 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.</p><p>As of the close on 3 November, index turnover is 1.3% from capping and other changes to the current index constituents. That gives the index committee a lot of room to add some big stocks to the index without increasing the turnover to levels seen at the last two rebalances in June and September.</p><p>We identify 12 stocks that could be added to the index based on market coverage and the impact of recent regulatory changes. Of the 12 stocks, 8 are higher probability changes and 4 are lower probability.</p><p>All 12 inclusions will result in a one-way turnover of 6.37% while the inclusion of the 8 high probability changes will result in a one-way turnover of 4.98%.</p><p>There is large short interest on most of the stocks and index inclusion could set off a round of short covering and could drive the stocks higher.</p>

Hang Seng Indexes will announce the results of the December 2021 review of the Hang Seng Family of Indexes on 19 November. The constituent changes will be effective after the close of trading on 3 December.The review period for the December rebalance ended on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the Hong Kong Hang Seng Index (HSI INDEX).With Hang Seng Indexes looking to get up to 80 Hong Kong Hang Seng Index (HSI INDEX) members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.As of the close on 3 November, index turnover is 1.3% from capping and other changes to the current index constituents. That gives the index committee a lot of room to add some big stocks to the index without increasing the turnover to levels seen at the last two rebalances in June and September.We identify 12 stocks that could be added to the index based on market coverage and the impact of recent regulatory changes. Of the 12 stocks, 8 are higher probability changes and 4 are lower probability.All 12 inclusions will result in a one-way turnover of 6.37% while the inclusion of the 8 high probability changes will result in a one-way turnover of 4.98%.There is large short interest on most of the stocks and index inclusion could set off a round of short covering and could drive the stocks higher.

Hang Seng Index Rebalance Preview: The Road to 80 Constituents

China

Innovent Biologics, Inc. operates as a biopharmaceutical company. The Company develops, manufactures, and distributes monoclonal antibody drug candidates for the treatment of oncology, ophthalmology, autoimmune, cardiovascular, and other diseases. Innovent Biologics serves customers in China.

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Innovent Biologics Inc (1801 HK)