HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Weight loss and Alzheimer's disease (AD) have been ranked among the top indications in the pharmaceutical history and are undeniable opportunities, but they are expected to generate different investment returns.</li>
<li>We have noticed that some companies have started developing GLP-1 gene therapy. We would be cautious about this.</li>
<li>Without strong fundamentals but is eager to go public on A-share market, <a href="https://www.smartkarma.com/entities/aim-vaccine-co-ltd" target="_blank" data-smartkarma-citation="entities:33778:1" rel="noopener">AIM Vaccine (6660 HK) </a>seems more enthusiastic about capital operations to make quick money.We consider this company risky.</li>
</ul>


Weight loss and Alzheimer's disease (AD) have been ranked among the top indications in the pharmaceutical history and are undeniable opportunities, but they are expected to generate different investment returns.
We have noticed that some companies have started developing GLP-1 gene therapy. We would be cautious about this.
Without strong fundamentals but is eager to go public on A-share market, AIM Vaccine (6660 HK) seems more enthusiastic about capital operations to make quick money.We consider this company risky.


China Healthcare Weekly (Oct.20)-Investment Returns on Weight Loss/AD,GLP-1 Gene Therapy,AIM Vaccine

Equity Capital Markets

Beijing Health Guard Biotechnology / Equity Capital Markets

<ul>
<li>The real market space of China’s HPV vaccines is much smaller-than-expected. Investment logic of vaccine companies is different from biotech - They either become large vaccine enterprises or are eliminated.</li>
<li>Low-Valent HPV vaccines would easily enter a price war or be included in National Immunization Program. 9-valent HPV vaccines would be the main battlefield, which is a highly competitive market.</li>
<li>Health Guard is facing increasing survival risks. Based on the concerns about the commercialization outlook of HPV vaccines, we’re not sure if the Company would bring expected returns to investors.</li>
</ul>


The real market space of China’s HPV vaccines is much smaller-than-expected. Investment logic of vaccine companies is different from biotech - They either become large vaccine enterprises or are eliminated.
Low-Valent HPV vaccines would easily enter a price war or be included in National Immunization Program. 9-valent HPV vaccines would be the main battlefield, which is a highly competitive market.
Health Guard is facing increasing survival risks. Based on the concerns about the commercialization outlook of HPV vaccines, we’re not sure if the Company would bring expected returns to investors.


Pre-IPO Beijing Health Guard Biotechnology - The Story of the HPV Vaccine Is Not as Good as Imagined

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 monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outflows, and holding by mainland investors.</li>
<li>We highlight inflows into Meituan, Wuxi Biologics, SMIC, GWM, HKEX.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outflows, and holding by mainland investors.
We highlight inflows into Meituan, Wuxi Biologics, SMIC, GWM, HKEX.


Hong Kong Connect Flows (October): Four Months of Inflows

<ul>
<li>Weight loss drug business has indeed significantly alleviated concerns about overcapacity issue in those leading CDMOs, but they do not have such a strong driving force on CROs.</li>
<li>The last straw that hits an industry is often not due to the disappearance of demographic dividends/declining demand/poor financial performance of companies, etc., but rather to policy-guided capital flows.</li>
<li>
<a href="https://www.smartkarma.com/entities/3d-medicines-inc" target="_blank" data-smartkarma-citation="entities:33790:1" rel="noopener">3D Medicines (1244 HK)</a> can be said a typical negative example in biopharmaceutical industry, and it is easy to be “manipulated”. We recommend investors stay away from such high-risk company.</li>
</ul>


Weight loss drug business has indeed significantly alleviated concerns about overcapacity issue in those leading CDMOs, but they do not have such a strong driving force on CROs.
The last straw that hits an industry is often not due to the disappearance of demographic dividends/declining demand/poor financial performance of companies, etc., but rather to policy-guided capital flows.

3D Medicines (1244 HK) can be said a typical negative example in biopharmaceutical industry, and it is easy to be “manipulated”. We recommend investors stay away from such high-risk company.


China Healthcare Weekly (Oct.6) - Weight Loss Drug CXO, Policy-Guided Capital Flows, 3D Medicines

<ul>
<li>The 8th national VBP released results, with an average price reduction of 56%. On the whole, the peak period of the impact of VBP on pharmaceutical companies has passed.</li>
<li>VBP document of Chinese patent medicines was released, which would affect a market with scale of RMB300 billion. Enterprises with rich product matrices/new products can better cope with this VBP.</li>
<li>For AIM, we listed several key points. Since the management are more interested in short term capital gains rather than developing a superior portfolio, AIM doesn’t have long-term investment value.</li>
</ul>


The 8th national VBP released results, with an average price reduction of 56%. On the whole, the peak period of the impact of VBP on pharmaceutical companies has passed.
VBP document of Chinese patent medicines was released, which would affect a market with scale of RMB300 billion. Enterprises with rich product matrices/new products can better cope with this VBP.
For AIM, we listed several key points. Since the management are more interested in short term capital gains rather than developing a superior portfolio, AIM doesn’t have long-term investment value.


China Healthcare Weekly (Mar.31) - 8th National VBP Result, Chinese Patent Medicine VBP, AIM Vaccine

China

AIM Vaccine Co., Ltd. manufactures and distributes vaccines. The Company produces recombinant hepatitis b vaccines, freeze dried human rabies vaccines, inactivated hepatitis a vaccines, live attenuated parotitis vaccines, and others. AIM Vaccine also operates import and export businesses.

AIM Vaccine (6660 HK)

China Healthcare Weekly (Oct.20)-Investment Returns on Weight Loss/AD,GLP-1 Gene Therapy,AIM Vaccine

Weight loss and Alzheimer's disease (AD) would generate different investment returns.We're conservative about the outlook of GLP-1 gene therapy.We...

Xinyao (Criss) Wang

Pre-IPO Beijing Health Guard Biotechnology - The Story of the HPV Vaccine Is Not as Good as Imagined

The real China’s HPV vaccine market could be smaller-than-expected.After being included in National Immunization Program, vaccine business will be...

Xinyao (Criss) Wang

Hong Kong Connect Flows (October): Four Months of Inflows

We analyzed the Hong Kong Connect Scheme for October and highlight flows for Meituan, Wuxi Biologics, SMIC, Great Wall Motor, HKEX.

Ke Yan, CFA, FRM

China Healthcare Weekly (Oct.6) - Weight Loss Drug CXO, Policy-Guided Capital Flows, 3D Medicines

Weight loss drug business would indeed bring opportunity to CDMO, but not CRO. Investors may need to pay attention to policy-guided capital...

Xinyao (Criss) Wang

China Healthcare Weekly (Mar.31) - 8th National VBP Result, Chinese Patent Medicine VBP, AIM Vaccine

The 8th national VBP released results.The impact of VBP on companies is decreasing. Chinese patent medicine VBP is coming, but some companies can...

Xinyao (Criss) Wang