HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Annoroad Gene Technology / Equity Capital Markets

<ul>
<li>Annoroad has its competitiveness in the industry, but in a complex market environment, the comprehensive product lines may not necessarily bring high performance growth and large revenue scale.</li>
<li>The prenatal testing business is not easy. VBP is headwind.After Illumina was listed on "Unreliable Entity List", it’s uncertain whether NextSeq 550AR sequencer can continue to be sold in China.</li>
<li>Taking into account the future growth uncertainty/centralized procurement/competitive pressure/lack of deep layout of the entire industry chain/policy risks, it's already good to have a valuation of RMB2-3.5 billion after IPO</li>
</ul>


Annoroad has its competitiveness in the industry, but in a complex market environment, the comprehensive product lines may not necessarily bring high performance growth and large revenue scale.
The prenatal testing business is not easy. VBP is headwind.After Illumina was listed on "Unreliable Entity List", it’s uncertain whether NextSeq 550AR sequencer can continue to be sold in China.
Taking into account the future growth uncertainty/centralized procurement/competitive pressure/lack of deep layout of the entire industry chain/policy risks, it's already good to have a valuation of RMB2-3.5 billion after IPO


Pre-IPO Annoroad Gene Technology - The Outlook Is Not Optimistic

Equity Bottom-Up

Livzon Pharmaceutical Group In / Equity Bottom-Up

Livzon Pharmaceutical Group In (000513 CH)

<ul>
<li>With rising COVID-19 cases, a pandemic outbreak in late 2024 is likely. Investors should focus on related sectors and stocks again.</li>
<li>Due to BIOSECURE Act, US companies are leaving Chinese partners.If Trump is elected, his sanctions on China's supply chain may intensify. So, there should be “valuation discount” for China CXOs.</li>
<li>Livzon may have negative YoY revenue growth in 24H1, but full-year revenue may have positive low single-digit YoY growth. Due to good dividend/repurchase policy, Livzon deserves more patience from investors.</li>
</ul>


With rising COVID-19 cases, a pandemic outbreak in late 2024 is likely. Investors should focus on related sectors and stocks again.
Due to BIOSECURE Act, US companies are leaving Chinese partners.If Trump is elected, his sanctions on China's supply chain may intensify. So, there should be “valuation discount” for China CXOs.
Livzon may have negative YoY revenue growth in 24H1, but full-year revenue may have positive low single-digit YoY growth. Due to good dividend/repurchase policy, Livzon deserves more patience from investors.


China Healthcare Weekly (Aug.18)- COVID Is Here, BIOSECURE Act Update, Livzon Deserves More Patience

<ul>
<li>Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. </li>
<li>This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year's financial results.</li>
<li>We analyzed the performance of <a href="https://www.smartkarma.com/entities/livzon-pharmaceutical-group-in" target="_blank" data-smartkarma-citation="entities:24770:1" rel="noopener">Livzon Pharmaceutical Group In (000513 CH),</a><a href="https://www.smartkarma.com/entities/bgi-genomics-co-ltd" target="_blank" data-smartkarma-citation="entities:25890:1" rel="noopener">BGI Genomics (300676 CH)</a><a href="https://www.smartkarma.com/entities/livzon-pharmaceutical-group-in" target="_blank" data-smartkarma-citation="entities:24770:1" rel="noopener"> and </a><a href="https://www.smartkarma.com/entities/jinxin-fertility-group-ltd" target="_blank" data-smartkarma-citation="entities:28003:1" rel="noopener">Jinxin Fertility Group (1951 HK) </a>based on their 23H1 reports, and adjusted our forecast accordingly.</li>
</ul>


Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. 
This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year's financial results.
We analyzed the performance of Livzon Pharmaceutical Group In (000513 CH),BGI Genomics (300676 CH) and Jinxin Fertility Group (1951 HK) based on their 23H1 reports, and adjusted our forecast accordingly.


China Population Policies Impact on Healthcare Companies Series – Part 2

<ul>
<li>China has started taking measures to optimize fertility policies. The inclusion of assisted reproduction technologies in medical insurance is a general trend, which would generate increasing demand in the future.</li>
<li>From the current domestic assisted reproductive industry chain, there is significant import substitution space and growth potential in the fields of related drugs, prenatal/newborn genetic testing, and downstream medical services.</li>
<li>Companies such as Livzon/BGI/Jinxin would be the direct beneficiaries of related policy. We analyzed the industry characteristics, investment rationale, key risks and comparison with peers of these companies. </li>
</ul>


China has started taking measures to optimize fertility policies. The inclusion of assisted reproduction technologies in medical insurance is a general trend, which would generate increasing demand in the future.
From the current domestic assisted reproductive industry chain, there is significant import substitution space and growth potential in the fields of related drugs, prenatal/newborn genetic testing, and downstream medical services.
Companies such as Livzon/BGI/Jinxin would be the direct beneficiaries of related policy. We analyzed the industry characteristics, investment rationale, key risks and comparison with peers of these companies. 


China Population Policies Impact on Healthcare Companies Series - Part 1

<ul>
<li>NHSA released the new NRDL negotiation rules of innovative drugs. Some adjustments will bring certain benefits to innovative drugs, but the overall impact will not be as good as expected. </li>
<li>Beijing announced that 16 assisted reproduction technologies will be covered by medical insurance reimbursement from July 1. This policy should benefit companies in the assisted reproduction industry chain.</li>
<li>We analyzed the key flaws of <a href="https://www.smartkarma.com/entities/kintor-pharmaceutical" target="_blank" data-smartkarma-citation="entities:28884:1" rel="noopener">Kintor Pharmaceutical (9939 HK)</a>, and we remain skeptical about this company.</li>
</ul>


NHSA released the new NRDL negotiation rules of innovative drugs. Some adjustments will bring certain benefits to innovative drugs, but the overall impact will not be as good as expected. 
Beijing announced that 16 assisted reproduction technologies will be covered by medical insurance reimbursement from July 1. This policy should benefit companies in the assisted reproduction industry chain.
We analyzed the key flaws of Kintor Pharmaceutical (9939 HK), and we remain skeptical about this company.


China Healthcare Weekly (Jul.7) - New NRDL Negotiation Rules, Assisted Reproduction Payment, Kintor

China

BGI Genomics Co., Ltd offers researching and testing services. The Company provides deoxyribonucleic acid sequencing, food science, health care researching, cancer prevention, drug discovery, and DNA sequencing. BGI Genomics offers services to medical and scientific research institutions worldwide.

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BGI Genomics (300676 CH)

Pre-IPO Annoroad Gene Technology - The Outlook Is Not Optimistic

Due to the future growth uncertainty/centralized procurement/competitive pressure/lack of deep layout of the entire industry chain/policy risks,...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.18)- COVID Is Here, BIOSECURE Act Update, Livzon Deserves More Patience

COVID is coming again. So investors can focus on related stocks. US companies leaving Chinese partners due to BIOSECURE Act. Livzon is still worth...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series – Part 2

Several regions have successively introduced policies to encourage childbirth, so we analyzed the recent policy updates. Based on Livzon/BGI...

Xinyao (Criss) Wang

China Population Policies Impact on Healthcare Companies Series - Part 1

China's population problem is already very serious. So, the government has begun to take a series of measures to optimize fertility policies. We...

Xinyao (Criss) Wang

China Healthcare Weekly (Jul.7) - New NRDL Negotiation Rules, Assisted Reproduction Payment, Kintor

Investors should not be overly optimistic about the new NRDL negotiation rule of innovative drug. Assisted reproduction technology will be covered...

Xinyao (Criss) Wang

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