HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>HUTCHMED’s 2023 results were in line with expectation. It is gradually becoming a self-sufficient innovative drug enterprise with sufficient cashflow due to upfront/milestone payments of Takeda and increasing product revenue.</li>
<li>2024 revenue guidance seems very optimistic, which has to rely on fruquintinib’s global sales performance (or Takeda’s contribution), and also on the timing of approval of fruquintinib’s 2L gastric cancer.</li>
<li>Starting from 2024, HUTCHMED will enter a period of accelerated growth in product revenue based on major catalysts.Market value of US$1,200 - US$1,800 million is a good place to long. </li>
</ul>


HUTCHMED’s 2023 results were in line with expectation. It is gradually becoming a self-sufficient innovative drug enterprise with sufficient cashflow due to upfront/milestone payments of Takeda and increasing product revenue.
2024 revenue guidance seems very optimistic, which has to rely on fruquintinib’s global sales performance (or Takeda’s contribution), and also on the timing of approval of fruquintinib’s 2L gastric cancer.
Starting from 2024, HUTCHMED will enter a period of accelerated growth in product revenue based on major catalysts.Market value of US$1,200 - US$1,800 million is a good place to long. 


Hutchmed China Ltd (13.HK/​​HCM.US) - High Growth Is Expected from 2024 to 2026

<ul>
<li>HUTCHMED's 2023 results are relatively certain. Fruquintinib had a strong start after obtaining approval in the US, with sales of about US$13-15 million in just more than a month.</li>
<li>Oncology/Immunology consolidated revenue would be in line with management’s performance guidance (US$450 to US$550 million) in 2023. There are promising data readout/NDA submission this year, which would be potential catalysts.</li>
<li>HUTCHMED has sufficient cashflow and does not require external financing. From 2024 to 2026, it will enter a period of accelerated growth in product revenue. Breakeven is achievable in 2025.</li>
</ul>


HUTCHMED's 2023 results are relatively certain. Fruquintinib had a strong start after obtaining approval in the US, with sales of about US$13-15 million in just more than a month.
Oncology/Immunology consolidated revenue would be in line with management’s performance guidance (US$450 to US$550 million) in 2023. There are promising data readout/NDA submission this year, which would be potential catalysts.
HUTCHMED has sufficient cashflow and does not require external financing. From 2024 to 2026, it will enter a period of accelerated growth in product revenue. Breakeven is achievable in 2025.


Hutchmed China Ltd (13.HK/​​HCM.US) - 2023 Results Preview and Catalysts in 2024

<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

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

KraneShares CSI China Internet ETF / Event-Driven

<ul>
<li>The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.</li>
<li>On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules. </li>
<li>Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?</li>
</ul>


The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.
On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules. 
Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?


New CSRC "Provisions" Take a Step Towards Meeting PCAOB Requirements

Hong Kong

HUTCHMED (China) Limited develops, manufactures, and sells pharmaceutical products. The Company offers drugs for oncology and autoimmune diseases treatment. HUTCHMED (China) markets its products worldwide.

Hutchmed China Ltd (13 HK)