HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

CStone Pharmaceuticals / Equity Bottom-Up

<ul>
<li>In the second half of this year, innovative device companies could be listed on the SSE STAR Market one after another, which is a systematic opportunity.</li>
<li>Shareholders' reduction in CXO will continue. Then, CXO could become a company mainly controlled by various funds, with the original owners all cashing out and leaving, such as WuXi AppTec. </li>
<li>We analyzed some key points of <a href="https://www.smartkarma.com/entities/cstone-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:27882:1" rel="noopener">CStone Pharmaceuticals (2616 HK)</a>. We remain conservative about the Company, and its stock price may continue to remain weak.</li>
</ul>


In the second half of this year, innovative device companies could be listed on the SSE STAR Market one after another, which is a systematic opportunity.
Shareholders' reduction in CXO will continue. Then, CXO could become a company mainly controlled by various funds, with the original owners all cashing out and leaving, such as WuXi AppTec. 
We analyzed some key points of CStone Pharmaceuticals (2616 HK). We remain conservative about the Company, and its stock price may continue to remain weak.


China Healthcare Weekly (Jun.2) - New Era for Medical Device, Shareholders' Reduction in CXO, Cstone

Equity Capital Markets

Cutia Therapeutics / Equity Capital Markets

<ul>
<li>Majority of Cutia’s products are based on license-in/distribution agreements. Cutia’s independent R&amp;D capability has yet to be proven. Stock prices of companies that completely rely on license-in are unsatisfactory.</li>
<li>Cutia's pipelines have unique characteristics. So, the requirements on team's ability are comprehensive. Purely medical background of Cutia's team could be a “hindrance” and may fail to commercialize them well.</li>
<li>There is a real need in the fields Cutia is focusing on, so the story is compelling. However, with limited commercialized products, it’s difficult to prove anything at current stage.</li>
</ul>


Majority of Cutia’s products are based on license-in/distribution agreements. Cutia’s independent R&amp;D capability has yet to be proven. Stock prices of companies that completely rely on license-in are unsatisfactory.
Cutia's pipelines have unique characteristics. So, the requirements on team's ability are comprehensive. Purely medical background of Cutia's team could be a “hindrance” and may fail to commercialize them well.
There is a real need in the fields Cutia is focusing on, so the story is compelling. However, with limited commercialized products, it’s difficult to prove anything at current stage.


Pre-IPO Cutia Therapeutics (CUT HK) - Outlook Is Uncertain Due to Unique Pipeline Characteristics

Thematic (Sector/Industry)

<ul>
<li>SVB has special institutions in China and its business mode is Venture Lending. The closure of SVB could make it harder for Chinese startups to raise money from US investors/banks.</li>
<li>The scale of SVB is small, but it cannot be said that it has no impact on the fundamentals of China healthcare companies. Investors need to reassess the potential risks.</li>
<li>SVB’s woes would not be a serious blow to the US if government takes timely action. However, if BRICS currency is established, it would be real fatal for the dollar.</li>
</ul>


SVB has special institutions in China and its business mode is Venture Lending. The closure of SVB could make it harder for Chinese startups to raise money from US investors/banks.
The scale of SVB is small, but it cannot be said that it has no impact on the fundamentals of China healthcare companies. Investors need to reassess the potential risks.
SVB’s woes would not be a serious blow to the US if government takes timely action. However, if BRICS currency is established, it would be real fatal for the dollar.


“Sudden Death” of Silicon Valley Bank (SVB) - The Impact on China Healthcare

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 Hong Kong Connect flows with our data engine for holding position as of February 17th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the total inflows to be USD 960m and  highlight flows for Meituan, Xiaomi, Tencent.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of February 17th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the total inflows to be USD 960m and  highlight flows for Meituan, Xiaomi, Tencent.


Hong Kong Connect Flows (Feb 17th): Meituan, Xiaomi, Tencent

CStone Pharmaceuticals / Equity Capital Markets

<ul>
<li>The revenue brought by CStone’s differentiated layout of pipeline does not match the R&amp;D investment. CStone needs to in-license more late-stage products, but the Company is not cash rich.</li>
<li>CStone was incubated by WuXi Bio. Its business model is“VC+IP+CRO”. Cstone doesn’t have independent R&amp;D capability. The increasingly low cost performance of in-licensed products has made the capital “reconsider” .</li>
<li>Cstone doesn’t have the potential to be a biopharma as it licensed out the key/core candidates. Its future valuation growth would be “discounted”. Corporate governance/instability is also a concern.</li>
</ul>


The revenue brought by CStone’s differentiated layout of pipeline does not match the R&amp;D investment. CStone needs to in-license more late-stage products, but the Company is not cash rich.
CStone was incubated by WuXi Bio. Its business model is“VC+IP+CRO”. Cstone doesn’t have independent R&amp;D capability. The increasingly low cost performance of in-licensed products has made the capital “reconsider” .
Cstone doesn’t have the potential to be a biopharma as it licensed out the key/core candidates. Its future valuation growth would be “discounted”. Corporate governance/instability is also a concern.


CStone Pharmaceuticals Placement (2616.HK) - There Is No Certainty that the Dilemma Will Reverse

Hong Kong

CStone Pharmaceuticals operates as a biotechnology company. The Company develops immuno-oncology and molecularly targeted drugs to address unmet medical needs for cancer patients. CStone Pharmaceuticals serves customers worldwide.

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CStone Pharmaceuticals (2616 HK)

China Healthcare Weekly (Jun.2) - New Era for Medical Device, Shareholders' Reduction in CXO, Cstone

After A-share released new IPO policy, systematic opportunity for medical device comes.Shareholders' reduction in CXO will continue,leading...

Xinyao (Criss) Wang

Pre-IPO Cutia Therapeutics (CUT HK) - Outlook Is Uncertain Due to Unique Pipeline Characteristics

Cutia need to clarify whether its positioning is to sell drugs or consumer products,as their strategies will be different. Cutia has to strengthen...

Xinyao (Criss) Wang

“Sudden Death” of Silicon Valley Bank (SVB) - The Impact on China Healthcare

SVB's "sudden death" would affect Chinese healthcare companies. Investors need to reassess the risks of related companies.We don't think SVB’s woes...

Xinyao (Criss) Wang

Hong Kong Connect Flows (Feb 17th): Meituan, Xiaomi, Tencent

We analyzed the Hong Kong Connect Scheme for last week and highlight inflows for Meituan, Xiaomi and outflows from Tencent.

Ke Yan, CFA, FRM

CStone Pharmaceuticals Placement (2616.HK) - There Is No Certainty that the Dilemma Will Reverse

CStone's in a reconstruction period after a series of negative news. Its pipeline/business model is hard to bring optimistic outlook. Corporate...

Xinyao (Criss) Wang

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