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 analyse the changes of A/H premium on 142 stocks over the last week. </li>
<li>A/H premium declined by 0.6ppt week on week. The decline was led by Information Technology,  consumer discretionary, and communication services. </li>
<li>We highlight A-H premium changes of Asymchem Lab, Shanghai Junshi, Great Wall Motor, Shandong Xinhua, Conch Cement, BBMG, and Sinopec Oilfield.</li>
</ul>


We analyse the changes of A/H premium on 142 stocks over the last week. 
A/H premium declined by 0.6ppt week on week. The decline was led by Information Technology,  consumer discretionary, and communication services. 
We highlight A-H premium changes of Asymchem Lab, Shanghai Junshi, Great Wall Motor, Shandong Xinhua, Conch Cement, BBMG, and Sinopec Oilfield.


A-H Premium Weekly: Asymchem Lab, Shanghai Junshi, Great Wall Motor

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The NMPA has issued a draft regulation about rare diseases, which would have a profound impact. Investors are advised to follow this field as policy becomes more friendly.</li>
<li>After continuous corrections, many investors are wondering if the healthcare sector has reached bottom. We analyzed our thoughts and judgement.</li>
<li>Let's have a look at the lockdown in China from a different angle. The zero-COVID policy could make economic sense. The “travails” are significant for the coming economic crisis.</li>
</ul>


The NMPA has issued a draft regulation about rare diseases, which would have a profound impact. Investors are advised to follow this field as policy becomes more friendly.
After continuous corrections, many investors are wondering if the healthcare sector has reached bottom. We analyzed our thoughts and judgement.
Let's have a look at the lockdown in China from a different angle. The zero-COVID policy could make economic sense. The “travails” are significant for the coming economic crisis.


China Healthcare Weekly (May20)-Lockdown Impact on Macro Economy, Bottom Signal? Rare Disease Policy

<ul>
<li>The NDRC issued the “14th Five-Year Plan For Bioeconomy”. This marks bio-economy has become a new economic form. With diversified resources and capital, a trillion-level market would develop rapidly.</li>
<li>The third centralized procurement in Fujian Province officially opened, involving five medical consumables. The bidding rule is milder than drugs VBP. Investors could pay more attention to medical device sector.</li>
<li>Akeso's 2021 PD-1 sales enlightened us that innovative drugs could still achieve good sales performance even without entering NRDL. So, companies could choose to give up NRDL negotiation strategically.</li>
</ul>


The NDRC issued the “14th Five-Year Plan For Bioeconomy”. This marks bio-economy has become a new economic form. With diversified resources and capital, a trillion-level market would develop rapidly.
The third centralized procurement in Fujian Province officially opened, involving five medical consumables. The bidding rule is milder than drugs VBP. Investors could pay more attention to medical device sector.
Akeso's 2021 PD-1 sales enlightened us that innovative drugs could still achieve good sales performance even without entering NRDL. So, companies could choose to give up NRDL negotiation strategically.


China Healthcare Weekly (May13)-New Bioeconomy Plan,Rational Withdrawal from NRDL,Medical Device VBP

<ul>
<li>China biotech companies are “being squeezed” between the negative domestic policies and the dilemma of internationalization. The investment logic of biotech has broken and the valuation forecasts are ineffective.</li>
<li>For CXO, the uncertainties outweigh the certainties.Investors need to be prepared for the possibility of CXO not to return to its peak, because its best time may have been over.</li>
<li>We’re in a very complicated environment. A lot of things come together. Survive first. Seize rebounds after plunge rather than go bottom fishing. You don't know when the bottom is. </li>
</ul>


China biotech companies are “being squeezed” between the negative domestic policies and the dilemma of internationalization. The investment logic of biotech has broken and the valuation forecasts are ineffective.
For CXO, the uncertainties outweigh the certainties.Investors need to be prepared for the possibility of CXO not to return to its peak, because its best time may have been over.
We’re in a very complicated environment. A lot of things come together. Survive first. Seize rebounds after plunge rather than go bottom fishing. You don't know when the bottom is. 


Re-Examine the Outlook and Investment Strategy for China Biotech and CXO

<ul>
<li>FDA’s CRL on Hutchmed and Junshi indicates if there’s no real innovation, there’s little point in doing MRCT. Chinese companies must re-evaluate the costs of internationalization.There’s nothing related to “politics”.</li>
<li>DRGs is a policy that will have a significant impact on the development trend of the entire healthcare industry, because it would change doctors’ interest orientation and companies’ profit model.</li>
<li>However, we believe that DRGs will be a top-level policy design, which will gradually be followed by supporting policies, such as special subsidies for innovation.</li>
</ul>


FDA’s CRL on Hutchmed and Junshi indicates if there’s no real innovation, there’s little point in doing MRCT. Chinese companies must re-evaluate the costs of internationalization.There’s nothing related to “politics”.
DRGs is a policy that will have a significant impact on the development trend of the entire healthcare industry, because it would change doctors’ interest orientation and companies’ profit model.
However, we believe that DRGs will be a top-level policy design, which will gradually be followed by supporting policies, such as special subsidies for innovation.


China Healthcare Weekly (May.6)-FDA’s CRL on Junshi/HCM, Biotech Globalization, Significance of DRGs

China

Shanghai Junshi Biosciences Co., Ltd. operates as a biopharmaceutical company. The Company develops and sells small molecule drugs, antibody drug conjugates, and other products. Shanghai Junshi Biosciences markets its products worldwide.

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Shanghai Junshi Biosciences (1877 HK)

A-H Premium Weekly: Asymchem Lab, Shanghai Junshi, Great Wall Motor

We highlight A-H premium changes of Asymchem Lab, Shanghai Junshi, Great Wall Motor, Shandong Xinhua, Conch Cement, BBMG, and Sinopec Oilfield last...

Ke Yan, CFA, FRM

China Healthcare Weekly (May20)-Lockdown Impact on Macro Economy, Bottom Signal? Rare Disease Policy

The lockdown could make economic sense, which is significant for coming economic crisis;We analyzed the bottom signal of biotech/CXO/medical...

Xinyao (Criss) Wang

China Healthcare Weekly (May13)-New Bioeconomy Plan,Rational Withdrawal from NRDL,Medical Device VBP

The 14th Five-Year Bioeconomy plan indicates a new economic form and a trillion-level market.Medical device will be a better investment if...

Xinyao (Criss) Wang

Re-Examine the Outlook and Investment Strategy for China Biotech and CXO

The investment logic of China biotech has broken due to dilemma of domestic policy and internationalization risk.CXO couldn't sustain high...

Xinyao (Criss) Wang

China Healthcare Weekly (May.6)-FDA’s CRL on Junshi/HCM, Biotech Globalization, Significance of DRGs

The FDA announced its CRL on Hutchmed’s surufatinib and Junshi’s PD-1. It's time to reexamine the logic and prospects of biotech globalization. The...

Xinyao (Criss) Wang

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