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

Equity Bottom-Up

<ul>
<li>China’s innovative drug sector remains a liquidity driven sector, as investible choices are limited, which include Akeso and BeiGene as our BUY ideas. </li>
<li>We also notice positive change in Innovent but opt to keep rating unchanged;</li>
<li>We upgrade BeiGene from SELL to BUY and maintain SELL on RemeGen, Innovent, JUNSHI and ZaiLab. We discontinued coverage on Legend Biotech.</li>
</ul>


China’s innovative drug sector remains a liquidity driven sector, as investible choices are limited, which include Akeso and BeiGene as our BUY ideas. 
We also notice positive change in Innovent but opt to keep rating unchanged;
We upgrade BeiGene from SELL to BUY and maintain SELL on RemeGen, Innovent, JUNSHI and ZaiLab. We discontinued coverage on Legend Biotech.


[Blue Lotus Sector Update]: Solid Companies Starting to Rise from the Ashes

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

Yichang HEC Changjiang Pharma / Event-Driven

<ul>
<li>Sunshine Lake Pharma plans to privatize HEC CJ Pharma in the form of merger by absorption with conditions. After privatization, CJ Pharma will be delisted from the Stock Exchange.</li>
<li>Sunshine Lake Pharma's pipeline has been “disconnected” from the level of domestic biotech in recent years, and is completely lagging behind the average speed of innovative drug development in China.</li>
<li>Due to “outdated” pipeline and lack of prospects, even if CJ Pharma is merged into Sunshine Lake Pharma, valuation performance of the new entity would be disappointing in the future.</li>
</ul>


Sunshine Lake Pharma plans to privatize HEC CJ Pharma in the form of merger by absorption with conditions. After privatization, CJ Pharma will be delisted from the Stock Exchange.
Sunshine Lake Pharma's pipeline has been “disconnected” from the level of domestic biotech in recent years, and is completely lagging behind the average speed of innovative drug development in China.
Due to “outdated” pipeline and lack of prospects, even if CJ Pharma is merged into Sunshine Lake Pharma, valuation performance of the new entity would be disappointing in the future.


HEC CJ Pharma (1558.HK)'s Merger Deal with Sunshine Lake Pharma - Almost No Investment Value

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>In 1H23, Akeso recorded RMB3.68bn revenue, including RMB795mn from sales of AK104 (PD-1/CTLA-4) and AK105 (PD-1), and RMB2.92bn from license income relevant to AK112 (PD-1/VEGF).</li><li>AK104 achieved RMB606mn sales in 1H23, totalling RMB1.15bn in the past 12 months, which beat the Company’s RMB1bn target during the first 12 months after launch.</li><li>Akeso maintained a high product GP margin at 90.3% in 1H23, compared to 91.5% in 2H22. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

In 1H23, Akeso recorded RMB3.68bn revenue, including RMB795mn from sales of AK104 (PD-1/CTLA-4) and AK105 (PD-1), and RMB2.92bn from license income relevant to AK112 (PD-1/VEGF).AK104 achieved RMB606mn sales in 1H23, totalling RMB1.15bn in the past 12 months, which beat the Company’s RMB1bn target during the first 12 months after launch.Akeso maintained a high product GP margin at 90.3% in 1H23, compared to 91.5% in 2H22. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Akeso (9926 HK) – Look Forward to Ph3 Data Readout of AK104 and AK112 in Large Indications

Thematic (Sector/Industry)

<ul>
<li>9926 HK/1801 HK/ BGNE US/9995 HK: US Biosecure Act extended Chinese CXO collaboration until 2032  (+/+/+/+)</li>
<li>BGNE US :BeiGene’s performance in the first quarter of 2024 exceeded expectations, especially benefiting from overseas BRUKINSA(/)</li>
<li>ZLAB US:Zai Lab's revenue and profit in the first quarter of 2024 exceeded expectations, mainly due to Efgartigimod.(/)</li>
</ul>


9926 HK/1801 HK/ BGNE US/9995 HK: US Biosecure Act extended Chinese CXO collaboration until 2032  (+/+/+/+)
BGNE US :BeiGene’s performance in the first quarter of 2024 exceeded expectations, especially benefiting from overseas BRUKINSA(/)
ZLAB US:Zai Lab's revenue and profit in the first quarter of 2024 exceeded expectations, mainly due to Efgartigimod.(/)


[Blue Lotus Daily]:9926 HK/1801HK/ BGNE/9995HK/ZLAB/NIO/LI/1211HK/BEKE/1810HK/3888HK/981HK/MSFT/INTC

<ul><li>A pioneer biopharma with rich innovative pipelines.</li><li>Akeso has developed a robust pipeline of over 30 drugs, covering oncology, autoimmune and metabolic diseases.</li><li>These pipeline products consist of six bi-specific antibodies, including the two first-in-class BsAb drugs, AK104 (PD-1/CTLA-4) and AK112 (PD-1/VEGF), and other BsAb drug candidates at earlier stage of development, i.e. AK129 (PD1/LAG3) and AK130 (TIGIT/TGF-β fusion protein). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

A pioneer biopharma with rich innovative pipelines.Akeso has developed a robust pipeline of over 30 drugs, covering oncology, autoimmune and metabolic diseases.These pipeline products consist of six bi-specific antibodies, including the two first-in-class BsAb drugs, AK104 (PD-1/CTLA-4) and AK112 (PD-1/VEGF), and other BsAb drug candidates at earlier stage of development, i.e. AK129 (PD1/LAG3) and AK130 (TIGIT/TGF-β fusion protein). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Akeso, Inc. (9926 HK) – A Leading Biopharma in Bi-Specific Antibodies

China

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

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

Akeso Biopharma Inc (9926 HK)

[Blue Lotus Sector Update]: Solid Companies Starting to Rise from the Ashes

China's drug sector is driven by liquidity, with limited investment choices. Akeso and BeiGene are recommended as buy options, while RemeGen,...

Blue Lotus Research Institute

HEC CJ Pharma (1558.HK)'s Merger Deal with Sunshine Lake Pharma - Almost No Investment Value

Sunshine Lake Pharma plans to privatize and merge with CJ Pharma.However, with an outdated pipeline, the new entity's valuation performance will...

Xinyao (Criss) Wang

Akeso (9926 HK) – Look Forward to Ph3 Data Readout of AK104 and AK112 in Large Indications

AK104 achieved RMB606mn sales in 1H23, totalling RMB1.15bn in the past 12 months, which beat the Company’s RMB1bn target during the first 12 months...

CMB International

[Blue Lotus Daily]:9926 HK/1801HK/ BGNE/9995HK/ZLAB/NIO/LI/1211HK/BEKE/1810HK/3888HK/981HK/MSFT/INTC

US Biosecure Act extends Chinese collaboration until 2032, BeiGene and Zai Lab exceed Q1 expectations with BRUKINSA and Efgartigimod.

Blue Lotus Research Institute

Akeso, Inc. (9926 HK) – A Leading Biopharma in Bi-Specific Antibodies

A pioneer biopharma with rich innovative pipelines. Akeso has developed a robust pipeline of over 30 drugs, covering oncology, autoimmune and...

CMB International

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Blue Lotus Sector Update]: Solid Companies Starting to Rise from the Ashes

​China's drug sector is driven by liquidity, with limited investment choices. Akeso and BeiGene are recommended as buy options, while RemeGen,...

Blue Lotus Research Institute

HEC CJ Pharma (1558.HK)'s Merger Deal with Sunshine Lake Pharma - Almost No Investment Value

​Sunshine Lake Pharma plans to privatize and merge with CJ Pharma.However, with an outdated pipeline, the new entity's valuation performance will...

Xinyao (Criss) Wang

Akeso (9926 HK) – Look Forward to Ph3 Data Readout of AK104 and AK112 in Large Indications

AK104 achieved RMB606mn sales in 1H23, totalling RMB1.15bn in the past 12 months, which beat the Company’s RMB1bn target during the first 12 months...

CMB International

[Blue Lotus Daily]:9926 HK/1801HK/ BGNE/9995HK/ZLAB/NIO/LI/1211HK/BEKE/1810HK/3888HK/981HK/MSFT/INTC

​US Biosecure Act extends Chinese collaboration until 2032, BeiGene and Zai Lab exceed Q1 expectations with BRUKINSA and Efgartigimod.

Blue Lotus Research Institute

Akeso, Inc. (9926 HK) – A Leading Biopharma in Bi-Specific Antibodies

A pioneer biopharma with rich innovative pipelines. Akeso has developed a robust pipeline of over 30 drugs, covering oncology, autoimmune and...

CMB International

China's drug sector is driven by liquidity, with limited investment choices. Akeso and BeiGene are recommended as buy options, while RemeGen,...

Sunshine Lake Pharma plans to privatize and merge with CJ Pharma.However, with an outdated pipeline, the new entity's valuation performance will...

US Biosecure Act extends Chinese collaboration until 2032, BeiGene and Zai Lab exceed Q1 expectations with BRUKINSA and Efgartigimod.