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>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

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

YiChang HEC ChangJiang Pharmaceutical / Event-Driven

YiChang HEC ChangJiang Pharmaceutical (1558 HK)

<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

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Jul 19th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Ping An, Meituan, China Mobile, HSBC, Haidilao, Picc P&amp;C, Gwmotor, Psbc.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Jul 19th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Ping An, Meituan, China Mobile, HSBC, Haidilao, Picc P&amp;C, Gwmotor, Psbc.


HK Short Interest Weekly: Ping An, Meituan, China Mobile, HSBC, Haidilao, Picc P&C, Gwmotor, Psbc

<ul>
<li>There’re rumor that Akeso’s AK112 and AK104 2024 revenue is RMB300 million and RMB1.5-1.6 billion respectively. Sales of AK104 may be below expectations, so Akeso decided to enter NRDL reimbursement.</li>
<li>Regardless of whether there is a takeover offer, reasonable valuation of Legend Bio is between US$12.5bn-US$15bn based on solid fundamentals. This deal is “a test” for the management of Genscript.</li>
<li>Current stock price of InnoCare just reflects its essence. If no new catalysts (e.g. breakthroughs in clinical data, new licensing agreement, etc.), we are not optimistic about the prospects of InnoCare.</li>
</ul>


There’re rumor that Akeso’s AK112 and AK104 2024 revenue is RMB300 million and RMB1.5-1.6 billion respectively. Sales of AK104 may be below expectations, so Akeso decided to enter NRDL reimbursement.
Regardless of whether there is a takeover offer, reasonable valuation of Legend Bio is between US$12.5bn-US$15bn based on solid fundamentals. This deal is “a test” for the management of Genscript.
Current stock price of InnoCare just reflects its essence. If no new catalysts (e.g. breakthroughs in clinical data, new licensing agreement, etc.), we are not optimistic about the prospects of InnoCare.


China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare's Trouble

China

Akeso is a biopharmaceutical company focused on the research, development, manufacturing, and commercialization of innovative antibody drugs. It develops treatments for major diseases such as cancer, autoimmune diseases, inflammation, and metabolic diseases, with key products including cadonilimab, ivonescimab, and penpulimab. The company was founded in 2012 and is headquartered in Zhongshan, Guangdong, China.

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Akeso (9926 HK)

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

Akeso reports better-than-expected financial results, with positive Phase III start for CD-47 mAb (AK117) leading to a raised price target and top...

Blue Lotus Research Institute

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

Biotech's decision to sell pipeline will continue in sluggish market, leading to lower valuation. Pharmaceutical distribution companies face...

Xinyao (Criss) Wang

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

Share Alternative is necessary to improve success rate of privatization, but there're risk behind. As undervaluation of Henlius is difficult to...

Xinyao (Criss) Wang

HK Short Interest Weekly: Ping An, Meituan, China Mobile, HSBC, Haidilao, Picc P&C, Gwmotor, Psbc

We analyzed the latest HK SFC report for aggregate short position as of Jul 19th and highlight short interest changes in Ping An, Meituan, China...

Ke Yan, CFA, FRM

China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare's Trouble

Revenue of Akeso's AK112 and AK104 in 2024 may fall short of expectations. Legend Bio got a takeover bid, which is "a test" for Genscript....

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

​Akeso reports better-than-expected financial results, with positive Phase III start for CD-47 mAb (AK117) leading to a raised price target and top...

Blue Lotus Research Institute

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

​Biotech's decision to sell pipeline will continue in sluggish market, leading to lower valuation. Pharmaceutical distribution companies face...

Xinyao (Criss) Wang

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

Share Alternative is necessary to improve success rate of privatization, but there're risk behind. As undervaluation of Henlius is difficult to...

Xinyao (Criss) Wang

HK Short Interest Weekly: Ping An, Meituan, China Mobile, HSBC, Haidilao, Picc P&C, Gwmotor, Psbc

We analyzed the latest HK SFC report for aggregate short position as of Jul 19th and highlight short interest changes in Ping An, Meituan, China...

Ke Yan, CFA, FRM

China Healthcare Weekly (July.21)-Rumor About Akeso, Takeover Bid for Legend Bio, InnoCare's Trouble

​Revenue of Akeso's AK112 and AK104 in 2024 may fall short of expectations. Legend Bio got a takeover bid, which is "a test" for Genscript....

Xinyao (Criss) Wang

Akeso reports better-than-expected financial results, with positive Phase III start for CD-47 mAb (AK117) leading to a raised price target and top...

Biotech's decision to sell pipeline will continue in sluggish market, leading to lower valuation. Pharmaceutical distribution companies face...

Revenue of Akeso's AK112 and AK104 in 2024 may fall short of expectations. Legend Bio got a takeover bid, which is "a test" for Genscript....