HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Due to its early involvement in license-in mode, Zai Lab could in-license many high-quality candidates at a low price in the early stage, thus leading to today's achievements.</li>
<li>However, the increasingly low cost performance of in-licensed products has made the capital “reconsider”, because it is increasingly difficult to maintain high growth as before based on license-in mode.</li>
<li>Zai Lab could be a good short-term trade,especially when it reaches licensing deals or launch new products,but doubts about long-term prospects could discourages investors from holding it for long term.</li>
</ul>


Due to its early involvement in license-in mode, Zai Lab could in-license many high-quality candidates at a low price in the early stage, thus leading to today's achievements.
However, the increasingly low cost performance of in-licensed products has made the capital “reconsider”, because it is increasingly difficult to maintain high growth as before based on license-in mode.
Zai Lab could be a good short-term trade,especially when it reaches licensing deals or launch new products,but doubts about long-term prospects could discourages investors from holding it for long term.


Zai Lab Ltd (ZLAB.US/9688.HK) - Will Zai Lab Go into a Vicious Circle?

Thematic (Sector/Industry)

<ul>
<li>According to NHSA and NHC’s new documents, the charging principle of joint replacement surgical robots is stipulated. With more hospitals introducing surgical robots,the commercialization prospects of this area becomes clearer.</li>
<li>Senate blesses bill to boost American competitiveness and curb its reliance on China for critical supplies, such as APIs. However, it may not be so easy to solve.</li>
<li>The sequela of COVID-19 could become a public health problem that cannot be ignored. For companies, instead of developing COVID-19 vaccines/drugs, entering COVID recovery market could be a good strategy.</li>
</ul>


According to NHSA and NHC’s new documents, the charging principle of joint replacement surgical robots is stipulated. With more hospitals introducing surgical robots,the commercialization prospects of this area becomes clearer.
Senate blesses bill to boost American competitiveness and curb its reliance on China for critical supplies, such as APIs. However, it may not be so easy to solve.
The sequela of COVID-19 could become a public health problem that cannot be ignored. For companies, instead of developing COVID-19 vaccines/drugs, entering COVID recovery market could be a good strategy.


China Healthcare Weekly (Apr.8)-Surgical Robots Pricing Rules,America COMPETES Act,COVID-19 Sequelae

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

Index Rebalance

Orient Overseas International / Index Rebalance

<ul>
<li>Current at 66 constituents, we expect to reach 80 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI INDEX</a> constituents by the end of the year before moving higher towards 100 index members in 2023.</li>
<li>We list 10 stocks that could be added to the index in June - with one-way turnover close to 6%, the actual number of inclusions will be lower.</li>
<li>We also list out another 8 stocks that could possibly be added in June, though the probability of a September/ December inclusion is higher.</li>
</ul>


Current at 66 constituents, we expect to reach 80 HSI INDEX constituents by the end of the year before moving higher towards 100 index members in 2023.
We list 10 stocks that could be added to the index in June - with one-way turnover close to 6%, the actual number of inclusions will be lower.
We also list out another 8 stocks that could possibly be added in June, though the probability of a September/ December inclusion is higher.


HSI Index Rebalance Preview: Will The Pace of Inclusions Pick Up?

Innovent Biologics Inc / Equity Bottom-Up

<ul>
<li>The biggest characteristic of <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> is its strong ability of resources integration. Besides, when it comes to execution, clinical efficiency and R&amp;D productivity, Innovent deserves credit.</li>
<li>If having 10 big commercialized drugs are the threshold for becoming a biopharma, Innovent's upgrade from biotech to biopharma is almost complete. </li>
<li>Innovent has enough cash flow over the next few years to support development, and may even turn losses into profits. So, we think that Innovent could get through “this winter”. </li>
</ul>


The biggest characteristic of Innovent Biologics Inc (1801 HK) is its strong ability of resources integration. Besides, when it comes to execution, clinical efficiency and R&amp;D productivity, Innovent deserves credit.
If having 10 big commercialized drugs are the threshold for becoming a biopharma, Innovent's upgrade from biotech to biopharma is almost complete. 
Innovent has enough cash flow over the next few years to support development, and may even turn losses into profits. So, we think that Innovent could get through “this winter”. 


Innovent Biologics Inc (1801.HK) - Capable of Surviving “this Winter”

<ul>
<li>The National Health Commission (NHC) of PRC released the NHC's Departmental Budget for 2022, further reducing the health expenditure of public hospitals compared with 2021.</li>
<li>So far, there are no strong “signals” about when the IPO environment will turn around. The transaction of control rights and M&amp;A between listed companies could become the mainstream.</li>
<li>The growth of enterprises takes time and is cyclical, but the secondary market won’t give enterprises the time for accumulation, which needs to be aware of by primary market investors.</li>
</ul>


The National Health Commission (NHC) of PRC released the NHC's Departmental Budget for 2022, further reducing the health expenditure of public hospitals compared with 2021.
So far, there are no strong “signals” about when the IPO environment will turn around. The transaction of control rights and M&amp;A between listed companies could become the mainstream.
The growth of enterprises takes time and is cyclical, but the secondary market won’t give enterprises the time for accumulation, which needs to be aware of by primary market investors.


China Healthcare Weekly (Apr.1)- Lower Budget of Public Hospitals, IPO Environment, Impatient Market

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)

Zai Lab Ltd (ZLAB.US/9688.HK) - Will Zai Lab Go into a Vicious Circle?

Due to increasing cost and potential legal risks, relying on license-in mode is not as glamorous as before.The transition to independent R&D takes...

Xinyao (Criss) Wang

China Healthcare Weekly (Apr.8)-Surgical Robots Pricing Rules,America COMPETES Act,COVID-19 Sequelae

The pricing rules of NHSA/NHC offer clearer outlook for surgical robots;The America COMPETES Act to curb reliance on China's APIs could be...

Xinyao (Criss) Wang

HSI Index Rebalance Preview: Will The Pace of Inclusions Pick Up?

There could be 5-6 inclusions to the HSI in June as part of the move to 80 members. We list 10 stocks that could be added to the index, and another...

Brian Freitas