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 December 16th.</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 highlight inflows into Meituan, Tencent, and outflows from China Mobile.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 16th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight inflows into Meituan, Tencent, and outflows from China Mobile.


Hong Kong Connect Flows (Dec 16th): Meituan, Tencent, China Mobile

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso Biopharma Inc (9926 HK)</a> and Summit Therapeutics entered into a collaborative and licensing agreement for AK112, which has set a new record for China's innovative drug license-out cooperation. </li>
<li>While the market remained positive about the transaction, there are also doubts. We deep dive the potential logic of the deal. </li>
<li>We recommended investors not to neglect “the nature of the deal” and “the real motivation” behind. It’s also important to see whether the subsequent operations can make some achievements overseas.</li>
</ul>



Akeso Biopharma Inc (9926 HK) and Summit Therapeutics entered into a collaborative and licensing agreement for AK112, which has set a new record for China's innovative drug license-out cooperation. 
While the market remained positive about the transaction, there are also doubts. We deep dive the potential logic of the deal. 
We recommended investors not to neglect “the nature of the deal” and “the real motivation” behind. It’s also important to see whether the subsequent operations can make some achievements overseas.


Akeso Biopharma (9926.HK) - Behind the Deal with Summit: A Snake Swallows an Elephant?

Thematic (Sector/Industry)

<ul>
<li>China further optimized COVID policy. The main reason to ease the policy at this time could be to release risks in advance so as to recover as soon as possible.</li>
<li>The growth curve of biotech is not linear. We analyzed three situations to help investors better understand “the new story” of Biotech at different stages.</li>
<li>We reviewed the performance of Company listed under HKEX Chapter 18A since this year. We found some interesting points worth the attention.</li>
</ul>


China further optimized COVID policy. The main reason to ease the policy at this time could be to release risks in advance so as to recover as soon as possible.
The growth curve of biotech is not linear. We analyzed three situations to help investors better understand “the new story” of Biotech at different stages.
We reviewed the performance of Company listed under HKEX Chapter 18A since this year. We found some interesting points worth the attention.


China Healthcare Weekly (Dec.9) - COVID Policy Update, Biotech Growth Curve, HKEX Chapter 18A Review

<ul>
<li>The renewal results of coronary stent centralized procurement reflected that the government's attitude towards the price reduction in VBP has changed, who tend to correct the excessively low price.</li>
<li>Investors’d better not to have such a misconception that they only attach importance to R&amp;D rather than commercialization. Only if sales ability is verified can enterprises have better valuation premium.</li>
<li>Investors are advised to find the targets that are in “sector resonance” but also has “difference in expectations”. Ecology of innovative drug has changed, such as <a href="https://www.smartkarma.com/entities/remegen-co-ltd-4d320f25-a993-45c0-80da-db6b4e1129f9" target="_blank" data-smartkarma-citation="entities:36086:1" rel="noopener">Remegen (688331 CH).</a>
</li>
</ul>


The renewal results of coronary stent centralized procurement reflected that the government's attitude towards the price reduction in VBP has changed, who tend to correct the excessively low price.
Investors’d better not to have such a misconception that they only attach importance to R&amp;D rather than commercialization. Only if sales ability is verified can enterprises have better valuation premium.
Investors are advised to find the targets that are in “sector resonance” but also has “difference in expectations”. Ecology of innovative drug has changed, such as Remegen (688331 CH).



China Healthcare Weekly (Dec.2)- VBP Correction, Sales Ability Overweigh R&D, Expectation Difference

Equity Capital Markets

<ul>
<li>The NRDL negotiation has completely changed the pricing method and valuation logic of innovative drugs. Based on the 3D Alphamab Simcere Agreements, 3D Medicines would have limited profits from envafolimab.</li>
<li>The majority candidates are based on license-in model. The intention to “pile up” a nice pipeline based on license-in model before IPO is obvious. 3D Medicines’s R&amp;D capability is questionable.</li>
<li>The overall quality and core competitiveness of 3D Medicines are not high. Mr. Market is not friendly to the valuation of companies based on license-in model. </li>
</ul>


The NRDL negotiation has completely changed the pricing method and valuation logic of innovative drugs. Based on the 3D Alphamab Simcere Agreements, 3D Medicines would have limited profits from envafolimab.
The majority candidates are based on license-in model. The intention to “pile up” a nice pipeline based on license-in model before IPO is obvious. 3D Medicines’s R&amp;D capability is questionable.
The overall quality and core competitiveness of 3D Medicines are not high. Mr. Market is not friendly to the valuation of companies based on license-in model. 


Pre-IPO 3D Medicines (3DM HK) - Some Points Worth the Attention; Our Thoughts on Valuation

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)

Hong Kong Connect Flows (Dec 16th): Meituan, Tencent, China Mobile

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

Ke Yan, CFA, FRM

Akeso Biopharma (9926.HK) - Behind the Deal with Summit: A Snake Swallows an Elephant?

The deal between Akeso and Summit set a new record of China license-out. We deep dive the logic of the deal. Investors are advised not to neglect...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.9) - COVID Policy Update, Biotech Growth Curve, HKEX Chapter 18A Review

China further optimized COVID policy, so as to release risks in advance and recover ASAP. The growth curve of biotech is not linear. We reviewed...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.2)- VBP Correction, Sales Ability Overweigh R&D, Expectation Difference

VBP renewal of coronary stents shows the government will correct the underpricing;Only if sales ability is verified can biotech has better...

Xinyao (Criss) Wang

Pre-IPO 3D Medicines (3DM HK) - Some Points Worth the Attention; Our Thoughts on Valuation

The overall quality/core competitiveness of 3D Medicines isn't high. Its pipeline is mainly based on license-in model, which is not favored by Mr....

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

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