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>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

Thematic (Sector/Industry)

<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

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

WuXi AppTec (2359 HK)

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

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

WuXi AppTec slumped over 10% after releasing its proposed disposal. We analyzed possible logic behind and trading strategy. We advised investors to...

Xinyao (Criss) Wang

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

GenScript’s commercialization of CAR-T, rapid growing GCT CDMO and “all-in” on GCT industry chain indicate exponential growth potential in...

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

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

WuXi AppTec slumped over 10% after releasing its proposed disposal. We analyzed possible logic behind and trading strategy. We advised investors to...

Xinyao (Criss) Wang

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

GenScript’s commercialization of CAR-T, rapid growing GCT CDMO and “all-in” on GCT industry chain indicate exponential growth potential in...

Xinyao (Criss) Wang

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

WuXi AppTec's valuation isn't cheap. It hopes to reserve capital in advance.The illegal share reduction/geopolitical conflicts/concerns on outlook...

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