Healthcare Analyst

Wilfred Yuen

Equity Bottom-Up

<ul>
<li>1H26 results driven by BD deals (including the collaboration with Lilly). 9 deals secured YTD, with total deal value of US$7.3bn. 2026E revenue guidance (USD150-200m) remains intact.</li>
<li>Management provided no further guidance. We believe the stock narrative hinges on: 1) BD deal flows, 2) pipeline: PCC momentum + (early) readouts, 3) new biz model MIAA Gym execution</li>
<li>See inside for 1H26 results call takeaways, pipeline updates, and P&amp;L analysis.</li>
</ul>


1H26 results driven by BD deals (including the collaboration with Lilly). 9 deals secured YTD, with total deal value of US$7.3bn. 2026E revenue guidance (USD150-200m) remains intact.
Management provided no further guidance. We believe the stock narrative hinges on: 1) BD deal flows, 2) pipeline: PCC momentum + (early) readouts, 3) new biz model MIAA Gym execution
See inside for 1H26 results call takeaways, pipeline updates, and P&amp;L analysis.


InSilico Medicine 3696.HK - 1H26 Results Call Takeaways: BD Deals, AI “Gym” Execution, PCC Momentum

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The Development and Reform Commission of Shenzhen Municipality issued a document about the subsidy for VBP, which is a positive policy and is good for innovation.</li>
<li>The approval of Genuine Biotech’s Azvudine could greatly increase the unpredictability of the approval of domestic innovative drugs, thus greatly increasing the unpredictable risk of domestic innovative drug enterprises.</li>
<li>In terms of internationalization, we summarized what Chinese pharmaceutical companies could do at the current stage. But they are hard to become the mainstream in pharmaceuticals globally in short term.</li>
</ul>


The Development and Reform Commission of Shenzhen Municipality issued a document about the subsidy for VBP, which is a positive policy and is good for innovation.
The approval of Genuine Biotech’s Azvudine could greatly increase the unpredictability of the approval of domestic innovative drugs, thus greatly increasing the unpredictable risk of domestic innovative drug enterprises.
In terms of internationalization, we summarized what Chinese pharmaceutical companies could do at the current stage. But they are hard to become the mainstream in pharmaceuticals globally in short term.


China Healthcare Weekly (July.29)-Subsidy for VBP, Unpredictable NMPA, Ways for Internationalization

Industry viewpoints:
<ul>
<li>The State Council released the supporting measures for the three-child policy so as to further optimize the family planning policy.</li>
<li>With the implementation of favorable policies on promoting the high-quality development of public hospitals, we are optimistic about the long-term development of the medical service and medical device industry.</li>
<li>The National Health Care Security Administration recently issued a new DIP regulation, which will guide the pilot areas to further standardize the implementation of payment based on disease classification.</li>
</ul>
Company news: 
News about the updated progress on drugs of <a href="https://www.smartkarma.com/entities/sinocelltech-group-ltd" target="_blank" data-smartkarma-citation="entities:33456:1" rel="noopener">Sinocelltech Group (688520 CH)</a>, <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a>, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a> and <a href="https://www.smartkarma.com/entities/china-medical-system-holdings" target="_blank" data-smartkarma-citation="entities:18736:1" rel="noopener">China Medical System (867 HK)</a>.
Market review:
Last week, stock price for healthcare sector in A share decreased 2.42%, while CSI 300 decreased 0.11% over the same period of time.
Risk disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:

The State Council released the supporting measures for the three-child policy so as to further optimize the family planning policy.
With the implementation of favorable policies on promoting the high-quality development of public hospitals, we are optimistic about the long-term development of the medical service and medical device industry.
The National Health Care Security Administration recently issued a new DIP regulation, which will guide the pilot areas to further standardize the implementation of payment based on disease classification.

Company news: 
News about the updated progress on drugs of Sinocelltech Group (688520 CH), Everest Medicines (1952 HK), Antengene (6996 HK) and China Medical System (867 HK).
Market review:
Last week, stock price for healthcare sector in A share decreased 2.42%, while CSI 300 decreased 0.11% over the same period of time.
Risk disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

Q2 2020’s selection delivered an average return increase of 54% v’s the MSCI Asia Pacific Index 37.4% over the same period. The GARP-based screen uses a combination of growth and value metrics to identify shares where brokers are forecasting high earnings growth, but which are currently valued at a price that is low relative to their forecast outlook. Whilst Central Banks are providing additional liquidity favouring growth names, our value-based screen is key to delivering positive gains as tapering begins. Q2 2021's screen provides 16 key suggestions.  What makes the current selection interesting is the bias towards Taiwan and India on a country basis and Industrials and Healthcare on a sector basis. Also of particular note, Singapore presents one name on this screen.

Q2 2020’s selection delivered an average return increase of 54% v’s the MSCI Asia Pacific Index 37.4% over the same period. The GARP-based screen uses a combination of growth and value metrics to identify shares where brokers are forecasting high earnings growth, but which are currently valued at a price that is low relative to their forecast outlook. Whilst Central Banks are providing additional liquidity favouring growth names, our value-based screen is key to delivering positive gains as tapering begins. Q2 2021's screen provides 16 key suggestions.  What makes the current selection interesting is the bias towards Taiwan and India on a country basis and Industrials and Healthcare on a sector basis. Also of particular note, Singapore presents one name on this screen.

Screening the Silk Road: Q2-2021 All Cap GARP (Zulu Warrior Screening)

1. Industry viewpoints:<ul>
<li>Last week, the bidding for the 4th volume-based purchase (VBP) was officially opened.</li>
<li>China's CTLA-4 antibody drug industry is in the early stage, but is expected to expand rapidly from 2021. </li>
<li>China's orthopedic implant device market is in a stage of rapid growth in recent years. However, the future large price reduction if included in the volume-based purchase should also be take into consideration.</li>
</ul>2. Company news:News about the progress of new drugs, COVID-19 vaccine, strategic collaboration and acquisition from <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a>, <a href="https://www.smartkarma.com/entities/cansino-biologics-inc" target="_blank" data-smartkarma-citation="entities:27739:1" rel="noopener">CanSino Biologics Inc (6185 HK)</a> and <a href="https://www.smartkarma.com/entities/china-medical-system-holdings" target="_blank" data-smartkarma-citation="entities:18736:1" rel="noopener">China Medical System (867 HK)</a>.3. Market review:Last week, stock price for healthcare sector in A share increased 3.75%, while CSI 300 increased 2.46% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:
Last week, the bidding for the 4th volume-based purchase (VBP) was officially opened.
China's CTLA-4 antibody drug industry is in the early stage, but is expected to expand rapidly from 2021. 
China's orthopedic implant device market is in a stage of rapid growth in recent years. However, the future large price reduction if included in the volume-based purchase should also be take into consideration.
2. Company news:News about the progress of new drugs, COVID-19 vaccine, strategic collaboration and acquisition from Innovent Biologics Inc (1801 HK), Antengene (6996 HK), CanSino Biologics Inc (6185 HK) and China Medical System (867 HK).3. Market review:Last week, stock price for healthcare sector in A share increased 3.75%, while CSI 300 increased 2.46% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China

China Medical System is a platform-based specialty pharmaceutical company focused on the research and development, manufacturing, and commercialization of innovative drugs. The company manufactures, sells, markets, and promotes a range of pharmaceutical products across therapeutic areas such as cardio-cerebrovascular, gastroenterology, ophthalmology, dermatology, and medical aesthetics. It was founded in 1995 and is headquartered in North Point, Hong Kong.

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China Medical System (CMS SP)

InSilico Medicine 3696.HK - 1H26 Results Call Takeaways: BD Deals, AI “Gym” Execution, PCC Momentum

2026E revenue guidance (USD150-200m) remains intact. We believe the stock narrative hinges on: 1) BD deal flows, 2) pipeline: PCC momentum +...

Wilfred Yuen

China Healthcare Weekly (July.29)-Subsidy for VBP, Unpredictable NMPA, Ways for Internationalization

The policy about subsidy for VBP is a positive sign for innovation. NMPA is unpredictable, increasing the uncertainty of drug approval. Here's what...

Xinyao (Criss) Wang

China Healthcare Weekly (July.23)

The article analyzed the supporting measures for the three-child policy, the mainstay position of public hospitals, the new DIP regulation...

Xinyao (Criss) Wang

Screening the Silk Road: Q2-2021 All Cap GARP (Zulu Warrior Screening)

GARP selection, held for 12 mths for good reason. The list delivered an average return of 54% v’s the MSCI Asia Pac Index 37.4% over the same...

David Lepper

China Healthcare Weekly (Feb.5)

This article analyzed the results of the 4th volume-based purchase, the CTLA-4 antibody drug industry, the orthopedic implant device market, news...

Xinyao (Criss) Wang

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