HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The market seems “not excited” with fruquintinib’s FDA approval.We analyzed the potential reasons behind.Beyond boosting market sentiment when license-out deal is announced initially,its practical impact on valuation could be limited.</li>
<li>HUTCHMED’s financial performance is good. The deal with Takeda helps to relieve cash-flow pressure. We think HUTCHMED is a relatively safe bet for investors as eventual breakeven is drawing near.</li>
<li>If based on conservative calculation, market value of about US$1,455-2,055 million is a good place to long.When market value is higher than US$3,500 million, it's time to consider taking profits.</li>
</ul>


The market seems “not excited” with fruquintinib’s FDA approval.We analyzed the potential reasons behind.Beyond boosting market sentiment when license-out deal is announced initially,its practical impact on valuation could be limited.
HUTCHMED’s financial performance is good. The deal with Takeda helps to relieve cash-flow pressure. We think HUTCHMED is a relatively safe bet for investors as eventual breakeven is drawing near.
If based on conservative calculation, market value of about US$1,455-2,055 million is a good place to long.When market value is higher than US$3,500 million, it's time to consider taking profits.


Hutchmed China Ltd (13.HK/​HCM.US) - A Valuable Option in the Portfolio

Zhejiang Orient Gene Biotech C / Equity Bottom-Up

Zhejiang Orient Gene Biotech C (688298 CH)

<ul>
<li>The national centralized procurement of high-value medical consumables for intraocular lens (IOL) and medical consumables related to sports medicine released results, with lower than expected price reductions. </li>
<li>Despite anti-corruption campaign, the business/profit model validation process of Chinese Biotech has not slowed down. There’s a chance to see Chinese Biotech turn losses into profits in 2024-2025.</li>
<li>Zhejiang Orient Gene Biotech (688298 CH) once brought considerable returns to investors, but now the beautiful story is over.After deletion from CSI Medical Service Index, share price could remain weak.</li>
</ul>


The national centralized procurement of high-value medical consumables for intraocular lens (IOL) and medical consumables related to sports medicine released results, with lower than expected price reductions. 
Despite anti-corruption campaign, the business/profit model validation process of Chinese Biotech has not slowed down. There’s a chance to see Chinese Biotech turn losses into profits in 2024-2025.
Zhejiang Orient Gene Biotech (688298 CH) once brought considerable returns to investors, but now the beautiful story is over.After deletion from CSI Medical Service Index, share price could remain weak.


China Healthcare Weekly (Dec.1) - Medical Device VBP, Biotech to Breakeven Soon, Orient Gene Biotech

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>A landmark step of globalization with fruquintinib’s FDA approval.</li><li>HCM’s partner Takeda received FDA approval for fruquintinib for the treatment of mCRC patients who were previously treated with chemo therapy, an anti-VEGF therapy, and, if RAS wild-type, an anti-EGFR therapy.</li><li>The approval was received under Priority Review more 20 days ahead of the scheduled PDUFA date of 30th Nov. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

A landmark step of globalization with fruquintinib’s FDA approval.HCM’s partner Takeda received FDA approval for fruquintinib for the treatment of mCRC patients who were previously treated with chemo therapy, an anti-VEGF therapy, and, if RAS wild-type, an anti-EGFR therapy.The approval was received under Priority Review more 20 days ahead of the scheduled PDUFA date of 30th Nov. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hutchmed (13 HK) – Big Milestone Achieved with Fruquintinib Successfully Approved by US FDA

<ul>
<li>HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. </li>
<li>Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.</li>
<li>Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.</li>
</ul>


HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued. 
Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.
Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.


Hutchmed China Ltd (13.HK/​HCM.US) 23H1 - This Company Is Becoming More Attractive

<ul><li>HCM’s consolidated revenues from oncology/immunology increased 294% YoY to US$359mn in 1H23, mainly driven by the US$259mn income recognition related to the total US$400mn upfront payment received from Takeda.</li><li>The in-market product sales increased 16% YoY (25% at CER) to US$101mn in 1H23, among which sales of fruquintinib increased 12% YoY (20% at CER) to US$56mn, maintaining leadership in patient share (47%) in 3L CRC in China.</li><li>Surufatinib’s in-market sales in 1H23 increased 66% YoY (79% at CER) to US$23mn, driven by increase in DoT and additional hospital listings. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HCM’s consolidated revenues from oncology/immunology increased 294% YoY to US$359mn in 1H23, mainly driven by the US$259mn income recognition related to the total US$400mn upfront payment received from Takeda.The in-market product sales increased 16% YoY (25% at CER) to US$101mn in 1H23, among which sales of fruquintinib increased 12% YoY (20% at CER) to US$56mn, maintaining leadership in patient share (47%) in 3L CRC in China.Surufatinib’s in-market sales in 1H23 increased 66% YoY (79% at CER) to US$23mn, driven by increase in DoT and additional hospital listings. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hutchmed (13 HK) – Eyes on the FDA Approval of Fruquintinib in Nov

Hong Kong

Hutchison Whampoa is an investment holding company with diverse global operations in ports and related services, property and hotels, retail, infrastructure, energy, and telecommunications. It operates port and container terminals, develops real estate, and provides mobile telecommunications services. The company is headquartered in Hong Kong and traces its roots back to 1862.

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Hutchison Whampoa (13 HK)

Hutchmed China Ltd (13.HK/HCM.US) - A Valuable Option in the Portfolio

Despite market's lackluster response to fruquintinib’s FDA approval, we're optimistic about HUTCHMED’s outlook.Rich cash flow/future catalysts make...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.1) - Medical Device VBP, Biotech to Breakeven Soon, Orient Gene Biotech

VBP result for intraocular lens/sports medicine consumables is better than expected.There’s a chance to see Chinese Biotech turn loss into profits...

Xinyao (Criss) Wang

Hutchmed (13 HK) – Big Milestone Achieved with Fruquintinib Successfully Approved by US FDA

The approval was based on the Ph3 MRCT FRESCO-2 (18% patients enrolled from the US) as well as the China FRESCO trial, implying the recognition of...

CMB International

Hutchmed China Ltd (13.HK/HCM.US) 23H1 - This Company Is Becoming More Attractive

We have seen over 35% share price rally after this insight was published. Obviously, the market is optimistic about the upcoming fruquintinib's FDA...

Xinyao (Criss) Wang

Hutchmed (13 HK) – Eyes on the FDA Approval of Fruquintinib in Nov

HCM’s consolidated revenues from oncology/immunology increased 294% YoY to US$359mn in 1H23, mainly driven by the US$259mn income recognition

CMB International

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Hutchmed China Ltd (13.HK/​HCM.US) - A Valuable Option in the Portfolio

Despite market's lackluster response to fruquintinib’s FDA approval, we're optimistic about HUTCHMED’s outlook.Rich cash flow/future catalysts make...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.1) - Medical Device VBP, Biotech to Breakeven Soon, Orient Gene Biotech

VBP result for intraocular lens/sports medicine consumables is better than expected.There’s a chance to see Chinese Biotech turn loss into profits...

Xinyao (Criss) Wang

Hutchmed (13 HK) – Big Milestone Achieved with Fruquintinib Successfully Approved by US FDA

The approval was based on the Ph3 MRCT FRESCO-2 (18% patients enrolled from the US) as well as the China FRESCO trial, implying the recognition of...

CMB International

Hutchmed China Ltd (13.HK/​HCM.US) 23H1 - This Company Is Becoming More Attractive

We have seen over 35% share price rally after this insight was published. Obviously, the market is optimistic about the upcoming fruquintinib's FDA...

Xinyao (Criss) Wang

Hutchmed (13 HK) – Eyes on the FDA Approval of Fruquintinib in Nov

HCM’s consolidated revenues from oncology/immunology increased 294% YoY to US$359mn in 1H23, mainly driven by the US$259mn income recognition

CMB International

Hutchmed China Ltd (13.HK/HCM.US) - A Valuable Option in the Portfolio

Hutchmed China Ltd (13.HK/HCM.US) 23H1 - This Company Is Becoming More Attractive