HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Event-Driven

<ul>
<li>The Share Alternative is necessary to improve success rate of privatization. Our guess is Henlius Biopharmaceuticals/Lin Lijun would vote for this privatization, but we’re not sure about Qatar Investment’s decision.</li>
<li>Due to its "flaws", undervaluation of Henlius is difficult to fundamentally change. So, those conservative and cautious investors would choose the Cash Alternative considering the risks behind the Share Alternative.</li>
<li>Even if there’re plans of re-listing, it may be based on a new entity formed after integrating Henlius and other assets within Fosun Pharma. So, the value of Rollover Entities/Securities remains uncertain.</li>
</ul>


The Share Alternative is necessary to improve success rate of privatization. Our guess is Henlius Biopharmaceuticals/Lin Lijun would vote for this privatization, but we’re not sure about Qatar Investment’s decision.
Due to its "flaws", undervaluation of Henlius is difficult to fundamentally change. So, those conservative and cautious investors would choose the Cash Alternative considering the risks behind the Share Alternative.
Even if there’re plans of re-listing, it may be based on a new entity formed after integrating Henlius and other assets within Fosun Pharma. So, the value of Rollover Entities/Securities remains uncertain.


Shanghai Henlius Biotech (2696.HK) - Privatization Has Taken a Positive Step Forward

Healthcare Equity Analyst - Emerging & Dev Markets, daaimon

Avien Pillay

Healthcare Equity Analyst - Emerging & Dev Markets

daaimon

daaimon is an independent research company focusing on healthcare and consumer sectors across developed and emerging markets. We produce insightful research which challenges conventional thinking. In particular, we look for new ideas by testing consensus forecasts and markets expectations.

Equity Bottom-Up

Innovent Biologics Inc / Equity Bottom-Up

<ul>
<li>Dupert, a drug for the special treatment of non-small cell cancer has been approved by the NMPA.</li>
<li>In 2022, China recorded the highest number of new cancer cases, and their exceptional high incidence of smoking is of particular concern.</li>
<li>Innovent’s portfolio of nine oncology drugs is very attractive in the biggest cancer market.</li>
</ul>


Dupert, a drug for the special treatment of non-small cell cancer has been approved by the NMPA.
In 2022, China recorded the highest number of new cancer cases, and their exceptional high incidence of smoking is of particular concern.
Innovent’s portfolio of nine oncology drugs is very attractive in the biggest cancer market.


Innovent Biologics (1801 HK) Adds to Its Oncology Portfolio

Equity Capital Markets

<ul>
<li>Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.</li>
<li>Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.</li>
<li>Medtide's business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.</li>
</ul>


Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.
Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.
Medtide's business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.


Pre-IPO Medtide - The Industry, the Business and the Concerns

<ul>
<li>Innovent’s 24H1 product revenue exceeded RMB3.7 billion.Due to anti-corruption campaign, newly marketed PD-1s are unable to be admitted to the hospitals normally, which indirectly promotes the sales performance of sintilimab.</li>
<li>2024 full-year product revenue is estimated to reach RMB7.7 billion. IBI363 has the potential to be blockbuster variety in global markets, which may put Innovent’s valuation on a new level.</li>
<li>Innovent is undervalued if market value is below RMB38.5 billion.If mazdutide is able to contribute RMB10 billion sales, Innovent’s market value would reach about RMB90-100 billion (based on 5 P/S).</li>
</ul>


Innovent’s 24H1 product revenue exceeded RMB3.7 billion.Due to anti-corruption campaign, newly marketed PD-1s are unable to be admitted to the hospitals normally, which indirectly promotes the sales performance of sintilimab.
2024 full-year product revenue is estimated to reach RMB7.7 billion. IBI363 has the potential to be blockbuster variety in global markets, which may put Innovent’s valuation on a new level.
Innovent is undervalued if market value is below RMB38.5 billion.If mazdutide is able to contribute RMB10 billion sales, Innovent’s market value would reach about RMB90-100 billion (based on 5 P/S).


2024 High Conviction Update: Innovent (1801.HK) 24Q2 - Valuation Upside Will Be Further Opened Up

<ul>
<li>We summarized the varieties that would miss 2024 NRDL negotiation and have to wait until 2026 to enter medical insurance coverage. This however means competing products would have more advantages.</li>
<li>As the NRDL negotiation becomes more transparent/reasonable, there will be a balance point among companies’ profits, patient affordability and medical insurance budget. So, there's no need to be overly pessimistic.</li>
<li>The approval process of CanSino’s PCV13i could be faster than expected. 2024 is the best time to bottom-fish this stock. Reasonable market value is at least RMB5 billion.</li>
</ul>


We summarized the varieties that would miss 2024 NRDL negotiation and have to wait until 2026 to enter medical insurance coverage. This however means competing products would have more advantages.
As the NRDL negotiation becomes more transparent/reasonable, there will be a balance point among companies’ profits, patient affordability and medical insurance budget. So, there's no need to be overly pessimistic.
The approval process of CanSino’s PCV13i could be faster than expected. 2024 is the best time to bottom-fish this stock. Reasonable market value is at least RMB5 billion.


China Healthcare Weekly (Aug.11) - 2024 NRDL Negotiation, China Biotech Outlook, Bottom Fish CanSino

China

Innovent Biologics, Inc. operates as a biopharmaceutical company. The Company develops, manufactures, and distributes monoclonal antibody drug candidates for the treatment of oncology, ophthalmology, autoimmune, cardiovascular, and other diseases. Innovent Biologics serves customers in China.

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Innovent Biologics Inc (1801 HK)

Shanghai Henlius Biotech (2696.HK) - Privatization Has Taken a Positive Step Forward

Share Alternative is necessary to improve success rate of privatization, but there're risk behind. As undervaluation of Henlius is difficult to...

Xinyao (Criss) Wang

Innovent Biologics (1801 HK) Adds to Its Oncology Portfolio

Innovent’s portfolio of nine approved oncology drugs, and pipeline of late-stage oncology drugs makes it a very attractive asset in the biggest...

daaimon

Pre-IPO Medtide - The Industry, the Business and the Concerns

Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Xinyao (Criss) Wang

2024 High Conviction Update: Innovent (1801.HK) 24Q2 - Valuation Upside Will Be Further Opened Up

Innovent's revenue growth in 24H1 was commendable. IBI363 has the potential to be blockbuster drug in global markets. Market value to reach above...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.11) - 2024 NRDL Negotiation, China Biotech Outlook, Bottom Fish CanSino

Some drugs won't be covered by insurance until 2026, giving competitors an edge. As NRDL negotiation is transparent, no need to be pessimistic on...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shanghai Henlius Biotech (2696.HK) - Privatization Has Taken a Positive Step Forward

Share Alternative is necessary to improve success rate of privatization, but there're risk behind. As undervaluation of Henlius is difficult to...

Xinyao (Criss) Wang

Innovent Biologics (1801 HK) Adds to Its Oncology Portfolio

Innovent’s portfolio of nine approved oncology drugs, and pipeline of late-stage oncology drugs makes it a very attractive asset in the biggest...

daaimon

Pre-IPO Medtide - The Industry, the Business and the Concerns

​Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Xinyao (Criss) Wang

2024 High Conviction Update: Innovent (1801.HK) 24Q2 - Valuation Upside Will Be Further Opened Up

​Innovent's revenue growth in 24H1 was commendable. IBI363 has the potential to be blockbuster drug in global markets. Market value to reach above...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.11) - 2024 NRDL Negotiation, China Biotech Outlook, Bottom Fish CanSino

​Some drugs won't be covered by insurance until 2026, giving competitors an edge. As NRDL negotiation is transparent, no need to be pessimistic on...

Xinyao (Criss) Wang

Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Innovent's revenue growth in 24H1 was commendable. IBI363 has the potential to be blockbuster drug in global markets. Market value to reach above...

Some drugs won't be covered by insurance until 2026, giving competitors an edge. As NRDL negotiation is transparent, no need to be pessimistic on...