Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zai-lab-ltd-94df40cf-c15e-462f-b3de-8d2d434ae935" target="_blank" data-smartkarma-citation="entities:36261:1" rel="noopener">Zai Lab (9688 HK)</a> recorded Vyvgart revenue of $10M, $13M, and $23M in 4Q23, 1Q24, and 2Q24, respectively. The company raised 2024 Vyvgart revenue guidance to $80M from $70M earlier.</li>
<li>Despite strong momentum from Vyvgart, Zai Lab still has a lot of pain points. Decelerating revenue growth from Zejula is one of them.</li>
<li>Due to its in-licensing business model, Zai Lab has lower gross profit margin of 64–65%, compared with ~80% for a typical innovator biotech company.</li>
</ul>



Zai Lab (9688 HK) recorded Vyvgart revenue of $10M, $13M, and $23M in 4Q23, 1Q24, and 2Q24, respectively. The company raised 2024 Vyvgart revenue guidance to $80M from $70M earlier.
Despite strong momentum from Vyvgart, Zai Lab still has a lot of pain points. Decelerating revenue growth from Zejula is one of them.
Due to its in-licensing business model, Zai Lab has lower gross profit margin of 64–65%, compared with ~80% for a typical innovator biotech company.


Zai Lab (9688 HK): Vyvgart Is Not the De-Risking Tool; Future Is Still Uncertain

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>BeiGene's 24Q2 results far exceeded expectations. Sales of BRUKINSA may exceed that of Calquence for the first time next year. Breakeven in 2024 becomes possible if effective cost control continues.</li>
<li>BeiGene's 2024 revenue could exceed Hengrui, marking the official transition of China's innovative pharmaceutical industry from the old generation to the new one. Reasonable market value for BeiGene is US$19-27.5bn.</li>
<li>Current valuation cannot reflect strong fundamentals.As BeiGene has established a convincing profit model, the market turmoil actually provides investors with a good opportunity to buy the stock at low price.</li>
</ul>


BeiGene's 24Q2 results far exceeded expectations. Sales of BRUKINSA may exceed that of Calquence for the first time next year. Breakeven in 2024 becomes possible if effective cost control continues.
BeiGene's 2024 revenue could exceed Hengrui, marking the official transition of China's innovative pharmaceutical industry from the old generation to the new one. Reasonable market value for BeiGene is US$19-27.5bn.
Current valuation cannot reflect strong fundamentals.As BeiGene has established a convincing profit model, the market turmoil actually provides investors with a good opportunity to buy the stock at low price.


BeiGene (6160.HK/BGNE.US) 24Q2 - It Is Time to Open a New Chapter in China's Pharmaceutical Industry

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 5th.</li>
<li>We estimate the weekly outflows to be US$1,769.7 million, led by information technology, materials, industrials, and offset by communication services, real estate, utilities.</li>
<li>We note that outflows have been consecutive for four weeks and highlight outflows for CATL (300750 CH).</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 5th.
We estimate the weekly outflows to be US$1,769.7 million, led by information technology, materials, industrials, and offset by communication services, real estate, utilities.
We note that outflows have been consecutive for four weeks and highlight outflows for CATL (300750 CH).


Northbound Flows (Jul 5th): 4 Weeks of Outflows

Shenyang Xingqi Pharmaceutical / Equity Bottom-Up

<ul>
<li>Xingqi’s 0.01% atropine sulfate eye drops got approved for marketing this March, which is expected to monopolize the domestic market for at least 2.5-3 years, and enjoy higher gross margin.</li>
<li>Peak sales of 0.01% atropine sulfate eye drops would reach RMB5 billion at least. Together with other products, Xingqi’s total revenue would reach at least RMB6 billion in the future.</li>
<li>Due to attractive dividend policy, this stock is worth holding for the long term.Xingqi’s market value could even reach RMB50 billion if the sales exclusivity period is longer than expected. </li>
</ul>


Xingqi’s 0.01% atropine sulfate eye drops got approved for marketing this March, which is expected to monopolize the domestic market for at least 2.5-3 years, and enjoy higher gross margin.
Peak sales of 0.01% atropine sulfate eye drops would reach RMB5 billion at least. Together with other products, Xingqi’s total revenue would reach at least RMB6 billion in the future.
Due to attractive dividend policy, this stock is worth holding for the long term.Xingqi’s market value could even reach RMB50 billion if the sales exclusivity period is longer than expected. 


Shenyang Xingqi Pharmaceutical (300573.CH)-Looking Forward to a Leap in Valuation and Rich Dividends

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Cadonilimab (AK104)(PD-1/CTLA-4) achieved 7.1% market share in China's PD-1(L1) market in 2023, up from 3.4% in 2022, ranking it No.4 in revenue market share after Tislelezumab, Keytruda and Sintilimab;</li>
<li>With six days to go, the chance to receives NMPA approval for Gastric Cancer is slim, which means the June 18 price cut is for the existing Cervical Cancer indication;</li>
<li>The big question is the price elasticity <em>following</em> Cadonilimab's inclusion to NDRL. With ~110K new patients each year and only ~2,100 receiving Cadonilimab, we expect a moderate price cut.</li>
</ul>


Cadonilimab (AK104)(PD-1/CTLA-4) achieved 7.1% market share in China's PD-1(L1) market in 2023, up from 3.4% in 2022, ranking it No.4 in revenue market share after Tislelezumab, Keytruda and Sintilimab;
With six days to go, the chance to receives NMPA approval for Gastric Cancer is slim, which means the June 18 price cut is for the existing Cervical Cancer indication;
The big question is the price elasticity following Cadonilimab's inclusion to NDRL. With ~110K new patients each year and only ~2,100 receiving Cadonilimab, we expect a moderate price cut.


What's Behind Akeso's Cadonilimab Price Cut and What's Next?

China

Jiangsu Hengrui Medicine Co., Ltd. develops, manufactures, and markets a variety of medicines and medicine packing materials. The Company's products include anti-tumor medicines, pain-killers, anti-infection medicines, aluminum foil, and other related products.

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Jiangsu Hengrui Medicine (600276 CH)

Zai Lab (9688 HK): Vyvgart Is Not the De-Risking Tool; Future Is Still Uncertain

Zai Lab's Vyvgart revenue sees significant growth, but challenges remain with decelerating Zejula revenue and lower gross profit margins due to in...

Tina Banerjee

BeiGene (6160.HK/BGNE.US) 24Q2 - It Is Time to Open a New Chapter in China's Pharmaceutical Industry

BeiGene's strong Q2 results make breakeven possible in Q4.BRUKINSA may surpass Calquence in sales next year.BeiGene is a new king in China's...

Xinyao (Criss) Wang

Northbound Flows (Jul 5th): 4 Weeks of Outflows

We analyzed northbound Shanghai/Shenzhen connect flows in the past week. We estimate the outflows to be USD1.8bn and highlight flows for CATL.

Ke Yan, CFA, FRM

Shenyang Xingqi Pharmaceutical (300573.CH)-Looking Forward to a Leap in Valuation and Rich Dividends

Xingqi's newly approved atropine eye drops will drive high growth/valuation expansion due to sales exclusivity period.Together with lucrative...

Xinyao (Criss) Wang

What's Behind Akeso's Cadonilimab Price Cut and What's Next?

Akeso's proposition is to develop BsAb as a universal anti-cancer drug. Its revenue from Cadonilimab in the out-of-hospital market for Cervical...

Blue Lotus Research Institute

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Zai Lab (9688 HK): Vyvgart Is Not the De-Risking Tool; Future Is Still Uncertain

​Zai Lab's Vyvgart revenue sees significant growth, but challenges remain with decelerating Zejula revenue and lower gross profit margins due to in...

Tina Banerjee

BeiGene (6160.HK/BGNE.US) 24Q2 - It Is Time to Open a New Chapter in China's Pharmaceutical Industry

​BeiGene's strong Q2 results make breakeven possible in Q4.BRUKINSA may surpass Calquence in sales next year.BeiGene is a new king in China's...

Xinyao (Criss) Wang

Northbound Flows (Jul 5th): 4 Weeks of Outflows

We analyzed northbound Shanghai/Shenzhen connect flows in the past week. We estimate the outflows to be USD1.8bn and highlight flows for CATL.

Ke Yan, CFA, FRM

Shenyang Xingqi Pharmaceutical (300573.CH)-Looking Forward to a Leap in Valuation and Rich Dividends

Xingqi's newly approved atropine eye drops will drive high growth/valuation expansion due to sales exclusivity period.Together with lucrative...

Xinyao (Criss) Wang

What's Behind Akeso's Cadonilimab Price Cut and What's Next?

​Akeso's proposition is to develop BsAb as a universal anti-cancer drug. Its revenue from Cadonilimab in the out-of-hospital market for Cervical...

Blue Lotus Research Institute

Zai Lab's Vyvgart revenue sees significant growth, but challenges remain with decelerating Zejula revenue and lower gross profit margins due to in...

BeiGene's strong Q2 results make breakeven possible in Q4.BRUKINSA may surpass Calquence in sales next year.BeiGene is a new king in China's...

Akeso's proposition is to develop BsAb as a universal anti-cancer drug. Its revenue from Cadonilimab in the out-of-hospital market for Cervical...