HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Asymchem Laboratories Tianjin / Equity Capital Markets

Asymchem Laboratories Tianjin (002821 CH)

On June 28, 2021, <a href="https://www.smartkarma.com/entities/asymchem-laboratories-tianjin-co-ltd" target="_blank" data-smartkarma-citation="entities:28265:1" rel="noopener">Asymchem Laboratories (002821 CH)</a>, the fifth largest drug substance CDMO globally and the largest China-based commercial stage chemical drug CDMO, submitted its listing application to the HKEX, which means that, after <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>, <a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-co-ltd-1008d609-73bd-4d76-8315-b29502a448ff" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK) </a>and <a href="https://www.smartkarma.com/entities/pharmaron-beijing-co-ltd" target="_blank" data-smartkarma-citation="entities:28428:1" rel="noopener">Pharmaron Beijing Co Ltd-H (3759 HK)</a>, there would be another A+H listed CXO company in China. This insight mainly analyzed the industry characteristics, the strength and the concerns of Asymchem.

On June 28, 2021, Asymchem Laboratories (002821 CH), the fifth largest drug substance CDMO globally and the largest China-based commercial stage chemical drug CDMO, submitted its listing application to the HKEX, which means that, after WuXi AppTec Co. Ltd. (2359 HK), Hangzhou Tigermed Consulting (H) (3347 HK) and Pharmaron Beijing Co Ltd-H (3759 HK), there would be another A+H listed CXO company in China. This insight mainly analyzed the industry characteristics, the strength and the concerns of Asymchem.

Pre-IPO Asymchem Laboratories - The Strength and the Concerns

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hang Seng Composite Index (HSCI) there are 36 inclusions and 29 deletions, taking the number of index constituents up to 500.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. Secondary Listings are not eligible for inclusion in the Stock Connect program.Of the 36 inclusions, 4 are already a part of Stock Connect by virtue of having listed A-shares, 2 are Secondary listings and will not be included in Stock Connect, 9 will be added to Shanghai and Shenzhen Stock Connect, while 21 stocks will only be added to Shenzhen Stock Connect.Of the 29 index deletions, 13 are not a part of Stock Connect, 7 will continue to remain a part of Stock Connect by virtue of having listed A-shares, while 9 will be deleted from the Stock Connect program.We identify 4 stocks that could sell off ahead of their removal from the Stock Connect Buy list, while Biotech stocks could be in focus ahead of their inclusion in the Stock Connect Buy and Sell list.

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

Betta Pharmaceuticals   / Equity Capital Markets

In the past two years, especially in the year 2020, it seems to be a “fashion” for bio-pharmaceutical companies to list on the HKEX. Against this backdrop, <a href="https://www.smartkarma.com/entities/betta-pharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:25883:1" rel="noopener">Betta Pharmaceuticals (300558 CH)</a> could also not miss this trend. Betta is a leading biopharmaceutical company committed to the R&amp;D of innovative therapies intended to address unmet medical needs including those in lung and other large cancer indications. On February 8th, 2021, the Company submitted to the HKEX the application for IPO.

In the past two years, especially in the year 2020, it seems to be a “fashion” for bio-pharmaceutical companies to list on the HKEX. Against this backdrop, Betta Pharmaceuticals (300558 CH) could also not miss this trend. Betta is a leading biopharmaceutical company committed to the R&amp;D of innovative therapies intended to address unmet medical needs including those in lung and other large cancer indications. On February 8th, 2021, the Company submitted to the HKEX the application for IPO. 

Pre-IPO Betta Pharmaceuticals - Insights on Products and Concerns

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

BeiGene has outlicensed ex-China rights to its PD-1 tislelizumab to Novartis on favorable terms, validating the competitive position of this compound in a crowded market. Further, the agreement marks a growing trend of Chinese companies outlicensing products to multinationals, which can have a leveraged benefit on their P&amp;Ls and valuations.

BeiGene has outlicensed ex-China rights to its PD-1 tislelizumab to Novartis on favorable terms, validating the competitive position of this compound in a crowded market. Further, the agreement marks a growing trend of Chinese companies outlicensing products to multinationals, which can have a leveraged benefit on their P&amp;Ls and valuations.

BeiGene: Novartis Grabs Tislelizumab Rights

We spend a substantial portion of our time thinking about oncology in China: one of the largest unmet needs in healthcare globally. The World Health Organization estimates that there are 4.3 million new cases and 2.9 million deaths annually. Historically, treatment options have been limited compared to the US, EU, and many of China’s neighbors. Fortunately, the government has implemented several reforms in recent years to accelerate development and importation of innovative treatments and to provide reimbursement for them. This Insight includes names to consider for two approaches to invest in this opportunity:1) Invest in the leading multi-asset oncology companies.2) Invest in a basket of companies with narrower oncology offerings.

We spend a substantial portion of our time thinking about oncology in China: one of the largest unmet needs in healthcare globally. The World Health Organization estimates that there are 4.3 million new cases and 2.9 million deaths annually. Historically, treatment options have been limited compared to the US, EU, and many of China’s neighbors. Fortunately, the government has implemented several reforms in recent years to accelerate development and importation of innovative treatments and to provide reimbursement for them. This Insight includes names to consider for two approaches to invest in this opportunity:1) Invest in the leading multi-asset oncology companies.2) Invest in a basket of companies with narrower oncology offerings.

BeiGene: Cancer Treatment in China--The Underestimated Opportunity

China

Jacobio Pharmaceuticals is a clinical-stage pharmaceutical company dedicated to the in-house discovery and development of innovative oncology therapies, focusing on "undruggable" targets in key oncogenic pathways. They leverage their Induced Allosteric Molecule Discovery Platform and iADC Platform to develop novel drugs, including clinical-stage candidates like Glecirasib (KRAS G12C inhibitor) and Sitneprotafib (SHP2 inhibitor) for various solid tumors. The company was founded in 2015 and is headquartered in Beijing, China.

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Jacobio Pharmaceuticals (1167 HK)

Pre-IPO Asymchem Laboratories - The Strength and the Concerns

The article mainly analyzed Asymchem Laboratories in terms of the industry characteristics, the strength of its business, the comparison with...

Xinyao (Criss) Wang

HSCI Index Rebalance & Stock Connect: Inclusions & Exclusions

There are 36 inclusions/ 29 exclusions for the Hang Seng Composite Index. 9 stocks will be deleted from the Stock Connect Buy list & there are a...

Brian Freitas

Pre-IPO Betta Pharmaceuticals - Insights on Products and Concerns

This article analyzed Betta Pharmaceutical in terms of its major products, pipeline, competitive landscape, and also include the concerns on the...

Xinyao (Criss) Wang

BeiGene: Novartis Grabs Tislelizumab Rights

BeiGene's deal with Novartis for PD-1 tislelizumab validates its competitive position, and marks a rising trend of Chinese companies licensing...

Kemp Dolliver, CFA

BeiGene: Cancer Treatment in China--The Underestimated Opportunity

We think that cancer is underdiagnosed and undertreated in China. We analyze the data and propose two approaches for investing in this theme.

Kemp Dolliver, CFA

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