HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>AD (Alzheimer Disease) and RNAi are one of the most valuable breakthroughs in global pharmaceutical industry in recent years. We think they may bring the next round of biopharmaceutical prosperity.</li>
<li>MNCs have begun to adjust their strategic business model in China. Licensing cooperation and equity investments in China biotech companies are expected to become a new trend.</li>
<li>We can't expect too much from <a href="https://www.smartkarma.com/entities/genscript-biotech-corp" target="_blank" data-smartkarma-citation="entities:21041:1" rel="noopener">Genscript Biotech (1548 HK)</a> just because Legend Bio’s CAR-T product has good sales performance. Genscript could underperform based on our analysis.</li>
</ul>


AD (Alzheimer Disease) and RNAi are one of the most valuable breakthroughs in global pharmaceutical industry in recent years. We think they may bring the next round of biopharmaceutical prosperity.
MNCs have begun to adjust their strategic business model in China. Licensing cooperation and equity investments in China biotech companies are expected to become a new trend.
We can't expect too much from Genscript Biotech (1548 HK) just because Legend Bio’s CAR-T product has good sales performance. Genscript could underperform based on our analysis.


China Healthcare Weekly (Jul.28) - Starting Point of New Prosperity, MNCs Change Strategy, Genscript

Equity Capital Markets

<ul>
<li>Although WuXi XDC has financing needs, we’re more inclined to view this spin-off listing as another capital operation of WuXi AppTec/WuXi Bio, who may not want to take risks alone.</li>
<li>Global ADC/broader bioconjugate market is at a nascent stage of development, with high R&amp;D risks/commercialization uncertainties. We cannot guarantee whether WuXi XDC will maintain its industry-leading position in the future.</li>
<li>Although high growth can bring good stories, we're not sure how much actual market space WuXi XDC will have in the future,which is the key to determining the valuation ceiling.</li>
</ul>


Although WuXi XDC has financing needs, we’re more inclined to view this spin-off listing as another capital operation of WuXi AppTec/WuXi Bio, who may not want to take risks alone.
Global ADC/broader bioconjugate market is at a nascent stage of development, with high R&amp;D risks/commercialization uncertainties. We cannot guarantee whether WuXi XDC will maintain its industry-leading position in the future.
Although high growth can bring good stories, we're not sure how much actual market space WuXi XDC will have in the future,which is the key to determining the valuation ceiling.


Pre-IPO WuXi XDC - The Beautiful Story and the Truth Behind

<ul>
<li>Moderna's move into China helps ease its current performance difficulties. But China has its own regulations/policies on vaccines. Whether Moderna can successfully adapt/stand out in China remains to be seen.</li>
<li>The entire vaccine industry in China is expected to undergo significant changes. We listed the companies in this industrial chain that would benefit from the successful signing with Moderna.</li>
<li>An important signal behind this deal is that while significant differences remain at the top, mutually beneficial business cooperation between China and US will continue, providing investors with additional options/confidence.</li>
</ul>


Moderna's move into China helps ease its current performance difficulties. But China has its own regulations/policies on vaccines. Whether Moderna can successfully adapt/stand out in China remains to be seen.
The entire vaccine industry in China is expected to undergo significant changes. We listed the companies in this industrial chain that would benefit from the successful signing with Moderna.
An important signal behind this deal is that while significant differences remain at the top, mutually beneficial business cooperation between China and US will continue, providing investors with additional options/confidence.


Moderna Inc (MRNA US) - What Would Happen After Moderna Enters China?

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a>, a review of the seven Industry Groups and number of HK constituents.</li>
<li>We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.</li>
<li>There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.</li>
</ul>


Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the Hang Seng Index, a review of the seven Industry Groups and number of HK constituents.
We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.
There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.


HSI Market Consultation: Foreign Companies, Industry Groups, HK Companies

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 May 12th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Longfor, Cosco Ship Holding, CCB.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of May 12th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Longfor, Cosco Ship Holding, CCB.


HK Short Interest Weekly: Longfor, Cosco Ship Holding, CCB

China

GenScript Biotech is a global biotechnology company providing life science research services and products, including gene synthesis, peptide synthesis, protein production, and antibody development. It also offers biologics contract development and manufacturing (CDMO) services and industrial synthetic biology products. The company was founded in 2002 and is headquartered in Nanjing, China.

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GenScript Biotech (1548 HK)

China Healthcare Weekly (Jul.28) - Starting Point of New Prosperity, MNCs Change Strategy, Genscript

AD+RNAi could be the start point of next round of biopharmaceutical prosperity. MNCs have begun to adjust their strategic business model in...

Xinyao (Criss) Wang

Pre-IPO WuXi XDC - The Beautiful Story and the Truth Behind

How far WuXi XDC can go in the future depends on the real market space of ADC and the company's performance. But as a capital operation, good story...

Xinyao (Criss) Wang

Moderna Inc (MRNA US) - What Would Happen After Moderna Enters China?

Moderna's entry into China is beneficial for both sides, which will have profound impact on China's biopharmaceutical industry.Such cooperation...

Xinyao (Criss) Wang

HSI Market Consultation: Foreign Companies, Industry Groups, HK Companies

The conclusions of the market consultation have been announced. Primary-listed foreign companies will be eligible for inclusion in the HSI and...

Brian Freitas

HK Short Interest Weekly: Longfor, Cosco Ship Holding, CCB

We analyzed the latest HK SFC report for aggregate short position as of May 12th and highlight short interest changes in Longfor, Cosco Ship...

Ke Yan, CFA, FRM

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