HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>AK112’s HARMONi-2 results were impressive, but there’s still critical data gap before obtaining approval from FDA. The main concern is whether good PFS can be translated into significant OS benefits.</li>
<li>
<a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso </a>will be eligible to receive low double-digit royalties on net sales from Summit. So, Summit is actually a better investment because it has complete global rights of AK112.</li>
<li>Investors are betting Summit to be acquired by MNCs at a high price.Due to anti-monopoly issue, the narrowing pool of potential buyers would increase the difficulty of Summit being acquired.</li>
</ul>


AK112’s HARMONi-2 results were impressive, but there’s still critical data gap before obtaining approval from FDA. The main concern is whether good PFS can be translated into significant OS benefits.

Akeso will be eligible to receive low double-digit royalties on net sales from Summit. So, Summit is actually a better investment because it has complete global rights of AK112.
Investors are betting Summit to be acquired by MNCs at a high price.Due to anti-monopoly issue, the narrowing pool of potential buyers would increase the difficulty of Summit being acquired.


Akeso Biopharma Inc (9926 HK) - Something Beautiful Is Happening

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Akeso reported C1H24 top line, non-IFRS operating loss and IFRS net loss 10% above, 13% narrower and 3.5% narrower than our estimates. </li>
<li>The most positive takeaway from the result is the Phase III start of CD-47 mAb (AK117), which can potentially be a global first-in-class (FIC). </li>
<li>We raised TP from HK$58 to HK$63 and reiterate our TOP BUY.</li>
</ul>


Akeso reported C1H24 top line, non-IFRS operating loss and IFRS net loss 10% above, 13% narrower and 3.5% narrower than our estimates. 
The most positive takeaway from the result is the Phase III start of CD-47 mAb (AK117), which can potentially be a global first-in-class (FIC). 
We raised TP from HK$58 to HK$63 and reiterate our TOP BUY.


[Akeso Inc. (9926 HK, BUY, TP HK$63) TP Change]: Too Many Positives to Count…Reiterate TOP BUY

Thematic (Sector/Industry)

<ul>
<li>1519 HK/ZTO US: Weekly parcel volume grew ~28% y-o-y (+)</li>
<li>ATAT US/TCOM US: Hotel industry showcased strong performance in the last week of August due to eased base effect.(+/+)</li>
<li>Macro Update: The mortgage interest rate for existing loans may be further reduced, releasing at least RMB200 billion of residents' funds annually, bodes well for consumption in China(+)</li>
</ul>


1519 HK/ZTO US: Weekly parcel volume grew ~28% y-o-y (+)
ATAT US/TCOM US: Hotel industry showcased strong performance in the last week of August due to eased base effect.(+/+)
Macro Update: The mortgage interest rate for existing loans may be further reduced, releasing at least RMB200 billion of residents' funds annually, bodes well for consumption in China(+)


[Blue Lotus Daily]:1519 HK/ZTO US/ATAT US/TCOM US/9926 HK/Macro Update

Event-Driven

Yichang HEC Changjiang Pharma / Event-Driven

<ul>
<li>Biotech will continue selling early-stage pipeline in a sluggish market, but this will further lower its valuation as financing won't improve quickly.</li>
<li>Pharmaceutical distribution companies are facing challenges, driving ongoing consolidation in the industry. However, this trend will ultimately benefit the growth of leading companies in the long run.</li>
<li>If investors truly understand "the essence" of <a href="https://www.smartkarma.com/entities/yichang-hec-changjiang-pharmaceutical" target="_blank" data-smartkarma-citation="entities:21040:1" rel="noopener">HEC Changjiang Pharma</a>, they will be more calm/rational to look at this absorption merger and the inclusion of Hang Seng family of indexes.</li>
</ul>


Biotech will continue selling early-stage pipeline in a sluggish market, but this will further lower its valuation as financing won't improve quickly.
Pharmaceutical distribution companies are facing challenges, driving ongoing consolidation in the industry. However, this trend will ultimately benefit the growth of leading companies in the long run.
If investors truly understand "the essence" of HEC Changjiang Pharma, they will be more calm/rational to look at this absorption merger and the inclusion of Hang Seng family of indexes.


China Healthcare Weekly (Sep.1)-Biotech Sell Asset,Pharmaceutical Distribution Company,HEC CJ Pharma

<ul>
<li>The Share Alternative is necessary to improve success rate of privatization. Our guess is Henlius Biopharmaceuticals/Lin Lijun would vote for this privatization, but we’re not sure about Qatar Investment’s decision.</li>
<li>Due to its "flaws", undervaluation of Henlius is difficult to fundamentally change. So, those conservative and cautious investors would choose the Cash Alternative considering the risks behind the Share Alternative.</li>
<li>Even if there’re plans of re-listing, it may be based on a new entity formed after integrating Henlius and other assets within Fosun Pharma. So, the value of Rollover Entities/Securities remains uncertain.</li>
</ul>


The Share Alternative is necessary to improve success rate of privatization. Our guess is Henlius Biopharmaceuticals/Lin Lijun would vote for this privatization, but we’re not sure about Qatar Investment’s decision.
Due to its "flaws", undervaluation of Henlius is difficult to fundamentally change. So, those conservative and cautious investors would choose the Cash Alternative considering the risks behind the Share Alternative.
Even if there’re plans of re-listing, it may be based on a new entity formed after integrating Henlius and other assets within Fosun Pharma. So, the value of Rollover Entities/Securities remains uncertain.


Shanghai Henlius Biotech (2696.HK) - Privatization Has Taken a Positive Step Forward

China

Akeso Inc. operates operatesa s a biotech company. The compnay develops treatments and therapies for various types of diseases. Akeso serves cutomers worldwide

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Akeso Biopharma Inc (9926 HK)