HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>It seems that Mr Market was not satisfactory with WuXi AppTec’s 2022H1 performance. If excluding COVID-19 projects (which are regarded as a one-time increment), the performance growth was not high.</li>
<li>Considering that the CXO preliminary bid winning has declined largely in the US, domestic CXO would not begin to gradually reflect the slowdown of newly added orders until Q4.</li>
<li>We are concerned about WuXi AppTec's performance in 2023. As an old generation CXO, it's hard to achieve V-shaped rebound. So, 2022 is a good time to offload the Company.</li>
</ul>


It seems that Mr Market was not satisfactory with WuXi AppTec’s 2022H1 performance. If excluding COVID-19 projects (which are regarded as a one-time increment), the performance growth was not high.
Considering that the CXO preliminary bid winning has declined largely in the US, domestic CXO would not begin to gradually reflect the slowdown of newly added orders until Q4.
We are concerned about WuXi AppTec's performance in 2023. As an old generation CXO, it's hard to achieve V-shaped rebound. So, 2022 is a good time to offload the Company.


WuXi AppTec (603259.CH/2359.HK) 2022H1 - The Concerns Behind and the Outlook

<ul>
<li>Understanding the essential differences in business characteristics of CRO and CDMO could help investors better understand the differences between Asymchem and Pharmaron in terms of investment logic, financial performance, and prospects.</li>
<li>Since Pharmaron didn’t obtain COVID-19 big orders, it would maintain normal revenue growth in 2023. However, increasing labor costs and uncontrollable investment business would lead to unsatisfactory net profit performance.</li>
<li>Asymchem’s performance would be disappointing in 2023. However, its growth momentum is expected to restore after it digest the impact of COVID-19 orders. Then, Asymchem’s valuation could surpass Pharmaron afterwards. </li>
</ul>


Understanding the essential differences in business characteristics of CRO and CDMO could help investors better understand the differences between Asymchem and Pharmaron in terms of investment logic, financial performance, and prospects.
Since Pharmaron didn’t obtain COVID-19 big orders, it would maintain normal revenue growth in 2023. However, increasing labor costs and uncontrollable investment business would lead to unsatisfactory net profit performance.
Asymchem’s performance would be disappointing in 2023. However, its growth momentum is expected to restore after it digest the impact of COVID-19 orders. Then, Asymchem’s valuation could surpass Pharmaron afterwards. 


Asymchem Laboratories (6821.HK) Vs Pharmaron Beijing (3759.HK) - Deep Dive the Logic and the Outlook

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 analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.2% as of Jul 21st.</li>
<li>The average A-H premium changed by -1.8ppt week on week, led by consumer staples, communication services, information technology and offset by real estate, utilities.</li>
<li>We highlight weekly changes in A-H premium for China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng, China Longyuan.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.2% as of Jul 21st.
The average A-H premium changed by -1.8ppt week on week, led by consumer staples, communication services, information technology and offset by real estate, utilities.
We highlight weekly changes in A-H premium for China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng, China Longyuan.


A-H Premium Weekly (Jul 21st): China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 120.6% as of Jul 7th.</li>
<li>The average A-H premium changed by 5.9ppt week on week, led by consumer staples, consumer discretionary, energy.</li>
<li>We highlight weekly changes in A-H premium for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan, Yankuang Energy, New China Life.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 120.6% as of Jul 7th.
The average A-H premium changed by 5.9ppt week on week, led by consumer staples, consumer discretionary, energy.
We highlight weekly changes in A-H premium for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan, Yankuang Energy, New China Life.


A-H Premium Weekly (Jul 7th): BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 113.6% as of May 26th.</li>
<li>The average A-H premium changed by 2.3ppt week on week, led by information technology, utilities, consumer discretionary and offset by financials.</li>
<li>We highlight weekly changes in A-H premium for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng, CSSC Offshore, Shanghai Fudan, China Life, Flat Glass, CCCC.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 113.6% as of May 26th.
The average A-H premium changed by 2.3ppt week on week, led by information technology, utilities, consumer discretionary and offset by financials.
We highlight weekly changes in A-H premium for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng, CSSC Offshore, Shanghai Fudan, China Life, Flat Glass, CCCC.


A-H Premium Weekly (May 26th): Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng

China

Asymchem Laboratories (Tianjin) Co., Ltd. is a contract development and manufacturing organization (CDMO) providing comprehensive solutions for pharmaceutical outsourcing, including small molecule, chemical macromolecule, biomacromolecule, and formulation CDMO services. The company also offers clinical research services, synthetic biology, and produces key pharmaceutical intermediates and active pharmaceutical ingredients. It was founded in 1999 and is headquartered in Tianjin, China.

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Asymchem (6821 HK)

WuXi AppTec (603259.CH/2359.HK) 2022H1 - The Concerns Behind and the Outlook

In this insight last year, we expressed our concerns on WuXi AppTec's performance in 2023, when we think could be the performance low point. So,...

Xinyao (Criss) Wang

Asymchem Laboratories (6821.HK) Vs Pharmaron Beijing (3759.HK) - Deep Dive the Logic and the Outlook

The different business nature of CRO and CDMO leads to different investment logic/outlook for Pharmaron and Asymchem. So, the current performance...

Xinyao (Criss) Wang

A-H Premium Weekly (Jul 21st): China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng

We analyzed A-H premium changes in the past week and highlight A-H premium changes for China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng,...

Ke Yan, CFA, FRM

A-H Premium Weekly (Jul 7th): BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan

We analyzed A-H premium changes in the past week and highlight A-H premium changes for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan,...

Ke Yan, CFA, FRM

A-H Premium Weekly (May 26th): Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng.

Ke Yan, CFA, FRM

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52-week Range

Market Cap (USDm)

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