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>C1Q24 was marked by liquidity crises in innovative drug and medical device, and depressed margin in digital health. We believe this is a buying opportunity;</li>
<li>PD-1 has recovered nicely in C2H23 and exceeded our expectation made for 2023.We forecast 20% YoY growth in 2024.Further,pipeline maturity has led to new drugs in autoimmune and metabolic drugs;</li>
<li>Biosimilar has proven to be part of the solution to deal with low paying ability of Chinese healthcare and denial of access to the high paying US healthcare market. </li>
</ul>


C1Q24 was marked by liquidity crises in innovative drug and medical device, and depressed margin in digital health. We believe this is a buying opportunity;
PD-1 has recovered nicely in C2H23 and exceeded our expectation made for 2023.We forecast 20% YoY growth in 2024.Further,pipeline maturity has led to new drugs in autoimmune and metabolic drugs;
Biosimilar has proven to be part of the solution to deal with low paying ability of Chinese healthcare and denial of access to the high paying US healthcare market. 


[Blue Lotus Healthcare Sector Update]: Bottom-Fishing at the Bottom of the Business Cycle

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Akeso Biopharma Inc / Equity Capital Markets

<ul>
<li>Akeso’s product sales grew rapidly in 2023, mainly driven by off-label use of AK104. Since AK104's commercialization potential on other indications was "overdrawn" in advance, sales growth would slow afterwards. </li>
<li>The key investment logic of Akeso is whether/how much its BsAb pipelines would grab shares from PD-1. The high valuation has somewhat priced in AK112’s successful head-to-head trial with pembrolizumab.</li>
<li>If AK112 does beat Keytruda, valuation will reach a new level. If AK112 fails in critical clinical trials, it would cast a shadow on the entire BsAb pipeline of Akeso.</li>
</ul>


Akeso’s product sales grew rapidly in 2023, mainly driven by off-label use of AK104. Since AK104's commercialization potential on other indications was "overdrawn" in advance, sales growth would slow afterwards. 
The key investment logic of Akeso is whether/how much its BsAb pipelines would grab shares from PD-1. The high valuation has somewhat priced in AK112’s successful head-to-head trial with pembrolizumab.
If AK112 does beat Keytruda, valuation will reach a new level. If AK112 fails in critical clinical trials, it would cast a shadow on the entire BsAb pipeline of Akeso.


Akeso Biopharma Placement (9926.HK) - Would Investors Be Willing to Take a Gamble?

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

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.

<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> is looking to raise US$155m from its primary placement.</li>
<li>Proceeds from the deal would be geared towards R&amp;D expenditure for its preclinical programs, expediting clinical trials, and towards commercializing its existing approved products.</li>
<li>Accounting for 3% of shares outstanding, and representing 5.7 days of its three month ADV, the deal would be a relatively small one for the firm to digest.</li>
</ul>



Akeso Biopharma Inc (9926 HK) is looking to raise US$155m from its primary placement.
Proceeds from the deal would be geared towards R&amp;D expenditure for its preclinical programs, expediting clinical trials, and towards commercializing its existing approved products.
Accounting for 3% of shares outstanding, and representing 5.7 days of its three month ADV, the deal would be a relatively small one for the firm to digest.


Akeso Inc Placement - A Small One to Digest, Momentum Has Been Strong

<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

China/Asia TMT

Shawn Yang

<ul>
<li>Amid general disappointment over China’s post-COVID recovery, high beta names like Akeso have sold off in recent days; </li>
<li>Management called for an update which specified on (1) why Ivonescimab (AK112) was absent in ASCO 2023, (2) sales update of Cadonilimab (AK104), (3) NDA and data readout timelines. </li>
<li>We came away positive;  We view management’s confirmation on progress a positive development that enhances certainty. We raise TP by HK$1 to HK$60.</li>
</ul>


Amid general disappointment over China’s post-COVID recovery, high beta names like Akeso have sold off in recent days; 
Management called for an update which specified on (1) why Ivonescimab (AK112) was absent in ASCO 2023, (2) sales update of Cadonilimab (AK104), (3) NDA and data readout timelines. 
We came away positive;  We view management’s confirmation on progress a positive development that enhances certainty. We raise TP by HK$1 to HK$60.


[Akeso Inc. (9926 HK) Target Price Change]: Sell off in High-Beta Names Creates Buying Opportunity

China

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

Akeso Biopharma Inc (9926 HK)

[Blue Lotus Healthcare Sector Update]: Bottom-Fishing at the Bottom of the Business Cycle

Liquidity crises in healthcare innovation present buying opportunity;PD-1 exceeds expectations with 20%YoY growth forecast for 2024;Biosimilars...

Blue Lotus Research Institute

Akeso Biopharma Placement (9926.HK) - Would Investors Be Willing to Take a Gamble?

Akeso's valuation has somewhat priced in the success of AK112’s head-to-head trial with KEYTRUDA.But if AK112 fails in critical trials, it will...

Xinyao (Criss) Wang

Akeso Inc Placement - A Small One to Digest, Momentum Has Been Strong

Akeso Biopharma Inc (9926 HK) is looking to raise US$155m from its primary placement. Representing 5.7 days of its three month ADV, the deal would...

Clarence Chu

[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

[Akeso Inc. (9926 HK) Target Price Change]: Sell off in High-Beta Names Creates Buying Opportunity

We view management’s confirmation on progress a positive development that enhances certainty. We raise TP by HK$1 to HK$60.

Blue Lotus Research Institute

[Blue Lotus Healthcare Sector Update]: Bottom-Fishing at the Bottom of the Business Cycle

​Liquidity crises in healthcare innovation present buying opportunity;PD-1 exceeds expectations with 20%YoY growth forecast for 2024;Biosimilars...

Blue Lotus Research Institute

Akeso Biopharma Placement (9926.HK) - Would Investors Be Willing to Take a Gamble?

Akeso's valuation has somewhat priced in the success of AK112’s head-to-head trial with KEYTRUDA.But if AK112 fails in critical trials, it will...

Xinyao (Criss) Wang

Akeso Inc Placement - A Small One to Digest, Momentum Has Been Strong

Akeso Biopharma Inc (9926 HK) is looking to raise US$155m from its primary placement. Representing 5.7 days of its three month ADV, the deal would...

Clarence Chu

[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

[Akeso Inc. (9926 HK) Target Price Change]: Sell off in High-Beta Names Creates Buying Opportunity

We view management’s confirmation on progress a positive development that enhances certainty. We raise TP by HK$1 to HK$60.

Blue Lotus Research Institute

Liquidity crises in healthcare innovation present buying opportunity;PD-1 exceeds expectations with 20%YoY growth forecast for 2024;Biosimilars...

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