HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>We update our forecast on CanSino’s performance in 2022, which could be much lower than that in 2021 due to the concerns on commercialization outlook of COVID-19 vaccine and MCV2/MCV4.</li>
<li>However, due to strong R&amp;D and technology platforms, the value of CanSino's pipeline is higher and its products could become the ceiling of pricing power for other homogeneous competing products.</li>
<li>We still think CanSino has investment value in long term despite the headwinds in short term.The market value by May 6 of HK$18.1 billion (PE/TTM at 7.22) is also attractive.</li>
</ul>


We update our forecast on CanSino’s performance in 2022, which could be much lower than that in 2021 due to the concerns on commercialization outlook of COVID-19 vaccine and MCV2/MCV4.
However, due to strong R&amp;D and technology platforms, the value of CanSino's pipeline is higher and its products could become the ceiling of pricing power for other homogeneous competing products.
We still think CanSino has investment value in long term despite the headwinds in short term.The market value by May 6 of HK$18.1 billion (PE/TTM at 7.22) is also attractive.


CanSino Biologics (688185.CH/6185.HK) -Difficulties in 2022 Cannot Mask Long-Term Investment Value

Chongqing Zhifei Biological Products / Equity Bottom-Up

Chongqing Zhifei Biological Products (300122 CH)

<ul>
<li>Under the current policy in China, any minor changes to vaccine doses require a series of clinical data support and registration changes. So, WHO’s recommendation won’t affect Zhifei’s short-term performance.</li>
<li>The increasing domestic competing HPV vaccines in the future would be a big threat to Zhifei’s agency business. Its self-developed products may not be strong enough to compensate. </li>
<li>The performance in 2022 is expected to be solid before real challenge comes in 2024. The valuation logic and outlook won’t be brighten unless there’s new breakthrough in agency business.</li>
</ul>


Under the current policy in China, any minor changes to vaccine doses require a series of clinical data support and registration changes. So, WHO’s recommendation won’t affect Zhifei’s short-term performance.
The increasing domestic competing HPV vaccines in the future would be a big threat to Zhifei’s agency business. Its self-developed products may not be strong enough to compensate. 
The performance in 2022 is expected to be solid before real challenge comes in 2024. The valuation logic and outlook won’t be brighten unless there’s new breakthrough in agency business.


Chongqing Zhifei Biological Products (300122.CH) - WHO's One-Dose HPV Vaccine Regimen & 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.

Equity Capital Markets

Jiangsu Recbio Technology / Equity Capital Markets

<ul>
<li>RecBio is an innovative vaccine company with a focus on HPV vaccines. The company is pre-marketing its USD 100-200 million Hong Kong listing.</li>
<li>In the previous note, we looked at the company's core products, including its HPV portfolio and the COVID-19 vaccine. Though not impressive, it does provide exposure to China HPV market. </li>
<li>In this insight, we provide our thoughts on valuation, including key assumptions.</li>
</ul>


RecBio is an innovative vaccine company with a focus on HPV vaccines. The company is pre-marketing its USD 100-200 million Hong Kong listing.
In the previous note, we looked at the company's core products, including its HPV portfolio and the COVID-19 vaccine. Though not impressive, it does provide exposure to China HPV market. 
In this insight, we provide our thoughts on valuation, including key assumptions.


RecBio (江苏瑞科) Pre-IPO:  Thoughts on Valuation

<ul>
<li>The main performance contributor in 2021 was CanSino’s COVID-19 vaccine.However, the high vaccination rates, new alternatives (e.g. oral COVID-19 pills) and concerns on capacity make the future sales highly uncertain.</li>
<li>The commercialization performance of MCV2 and MCV4 would largely determine when CanSino could truly shift to relying on conventional vaccine business rather than COVID-19 vaccine to contribute performance.</li>
<li>Objectively speaking, CanSino’s pipeline, R&amp;D capability and technology platforms do have advantages and investment value.</li>
</ul>


The main performance contributor in 2021 was CanSino’s COVID-19 vaccine.However, the high vaccination rates, new alternatives (e.g. oral COVID-19 pills) and concerns on capacity make the future sales highly uncertain.
The commercialization performance of MCV2 and MCV4 would largely determine when CanSino could truly shift to relying on conventional vaccine business rather than COVID-19 vaccine to contribute performance.
Objectively speaking, CanSino’s pipeline, R&amp;D capability and technology platforms do have advantages and investment value.


CanSino Biologics (6185.HK/688185.CH) - Still Have Investment Value

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

China Yangtze Power Co, Ltd. / Index Rebalance

<ul>
<li>There are 5 changes to the <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50 Index (SSE50 INDEX)</a> as a part of the December rebalance. One-way turnover is 6% and the one-way trade is CNY 3.3bn.</li>
<li>There is same way flow on <a href="https://www.smartkarma.com/entities/zhangzhou-pientzehuang-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:15709:1" rel="noopener">Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)</a>, <a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd" target="_blank" data-smartkarma-citation="entities:34045:1" rel="noopener">China Telecom (601728 CH)</a> and <a href="https://www.smartkarma.com/entities/sanan-optoelectronics-co-ltd" target="_blank" data-smartkarma-citation="entities:4436:1" rel="noopener">Sanan Optoelectronics Co (600703 CH)</a> around the time of the SSE50 inclusion.</li>
<li>With active futures contracts traded on the CFFEX, there will be cash and carry positions and the rebalancing could add to the impact on the inclusions and exclusions.</li>
</ul>


There are 5 changes to the SSE50 Index (SSE50 INDEX) as a part of the December rebalance. One-way turnover is 6% and the one-way trade is CNY 3.3bn.
There is same way flow on Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH), China Telecom (601728 CH) and Sanan Optoelectronics Co (600703 CH) around the time of the SSE50 inclusion.
With active futures contracts traded on the CFFEX, there will be cash and carry positions and the rebalancing could add to the impact on the inclusions and exclusions.


SSE50 Index Rebalance: 5 Changes and Same Way Index Flow

China

Chongqing Zhifei Biological Products Company Ltd. researches, manufactures, and sells vaccines and biological products including prevention products, blood products, diagnostic reagents, and therapeutic agents.

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Chongqing Zhifei Biological Products (300122 CH)

CanSino Biologics (688185.CH/6185.HK) -Difficulties in 2022 Cannot Mask Long-Term Investment Value

2022 will be difficult for CanSino. We lowered performance forecast.But due to strong R&D and technology platforms, the value of CanSino's pipeline...

Xinyao (Criss) Wang