HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>If checking the hot ADC transactions in recent years, a very big portion of ADC varieties in global licensing deals are from Chinese pharmaceutical companies, which is actually very rare.</li>
<li>While international buyers are “very generous” for ADC assets and MNC's appetite would remain strong, they will immediately calm down and stop once they see any "potential risk" behind.</li>
<li>For Chinese pharmaceutical companies, ADC license-out deal is more of a temporary catalyst. We suggest taking a rational view. ADC CDMO (e.g. WuXi XDC) could be a better investment option.</li>
</ul>


If checking the hot ADC transactions in recent years, a very big portion of ADC varieties in global licensing deals are from Chinese pharmaceutical companies, which is actually very rare.
While international buyers are “very generous” for ADC assets and MNC's appetite would remain strong, they will immediately calm down and stop once they see any "potential risk" behind.
For Chinese pharmaceutical companies, ADC license-out deal is more of a temporary catalyst. We suggest taking a rational view. ADC CDMO (e.g. WuXi XDC) could be a better investment option.


China's Rising Role in Global ADC Partnership Wave - Opportunities and Risks Behind the Gold Rush

<ul>
<li>While we’re optimistic about weight loss drug business, we also need to recognize the "true colors" of relevant companies, which helps us realize "when to participate and when to exit".</li>
<li>We analyzed the negatives/"flaws" of popular companies that favored by capital: <a href="https://www.smartkarma.com/entities/brightgene-bio-medical-technol" target="_blank" data-smartkarma-citation="entities:30356:1" rel="noopener">BrightGene Bio-Medical Technol (688166 CH)</a>, <a href="https://www.smartkarma.com/entities/hybio-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:20966:1" rel="noopener">Hybio Pharmaceutical (300199 CH)</a>, <a href="https://www.smartkarma.com/entities/hainan-poly-pharm-co-ltd" target="_blank" data-smartkarma-citation="entities:29739:1" rel="noopener">Hainan Poly Pharm (300630 CH), </a>Sinopep-Allsino, Kawin Technology, Highfine Biotech,etc.</li>
<li>Short-Term stock price rally are mainly driven by sentiment, but future valuation still needs to be supported by performance and fundamentals. Some companies are just conceptual hype in our view.</li>
</ul>


While we’re optimistic about weight loss drug business, we also need to recognize the "true colors" of relevant companies, which helps us realize "when to participate and when to exit".
We analyzed the negatives/"flaws" of popular companies that favored by capital: BrightGene Bio-Medical Technol (688166 CH), Hybio Pharmaceutical (300199 CH), Hainan Poly Pharm (300630 CH), Sinopep-Allsino, Kawin Technology, Highfine Biotech,etc.
Short-Term stock price rally are mainly driven by sentiment, but future valuation still needs to be supported by performance and fundamentals. Some companies are just conceptual hype in our view.


China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

<ul>
<li>Globalization and innovation are two core paths for companies’ development, but with completely different effects.Instead of rushing to go global, it’s better to calm down to focus on R&amp;D first.</li>
<li>Many domestic companies choose Me-Too strategy, which is considered a “shortcut”. However, Me-Too strategy is not always successful. We analyzed different scenarios to help investors better distinguish valuable Me-Too strategies.</li>
<li>There could be a potential short-term correction in healthcare sector. Since trading opportunities remain, rebound would come next, but stock-picking would not be the same as in the past.</li>
</ul>


Globalization and innovation are two core paths for companies’ development, but with completely different effects.Instead of rushing to go global, it’s better to calm down to focus on R&amp;D first.
Many domestic companies choose Me-Too strategy, which is considered a “shortcut”. However, Me-Too strategy is not always successful. We analyzed different scenarios to help investors better distinguish valuable Me-Too strategies.
There could be a potential short-term correction in healthcare sector. Since trading opportunities remain, rebound would come next, but stock-picking would not be the same as in the past.


China Healthcare Weekly (Nov.3)-Share Price Correction,Valuable Shortcut,Globalization Vs Innovation

<ul>
<li>Due to the popularity of GLP-1 target, the entire GLP-1 upstream and downstream industry chain has received great enthusiasm. We analyzed related investment opportunities but also concerns in this market.  </li>
<li>Domestic CXOs should focus on securing orders for overseas weight loss drugs. The market value increment brought by weight loss drugs to CXO should be higher than that of APIs.</li>
<li>Due to increasing competition/potential price war, how big the real market space is uncertain. So, the market value increment of weight loss drugs business for pharmaceutical companies could be lower-than-expected.</li>
</ul>


Due to the popularity of GLP-1 target, the entire GLP-1 upstream and downstream industry chain has received great enthusiasm. We analyzed related investment opportunities but also concerns in this market.  
Domestic CXOs should focus on securing orders for overseas weight loss drugs. The market value increment brought by weight loss drugs to CXO should be higher than that of APIs.
Due to increasing competition/potential price war, how big the real market space is uncertain. So, the market value increment of weight loss drugs business for pharmaceutical companies could be lower-than-expected.


China's Weight Loss Drug Market – The Investment Opportunities and the Risks Behind

<ul>
<li>The anti-corruption campaign has significantly accelerated since the beginning of this year. After Central Commission for Discipline Inspection has been involved, the anti-corruption efforts in pharmaceutical/device sectors would be unprecedented.</li>
<li>The main targets are leaders of hospitals/governments. The impact of anti-corruption on companies is indirect. As long as senior management are not investigated/arrested, the impact on stock price isn’t significant.</li>
<li>However, investors not only need to consider the problem of sales growth slowing down in the context of anti-corruption, but also consider whether companies is engaging in financial fraud. </li>
</ul>


The anti-corruption campaign has significantly accelerated since the beginning of this year. After Central Commission for Discipline Inspection has been involved, the anti-corruption efforts in pharmaceutical/device sectors would be unprecedented.
The main targets are leaders of hospitals/governments. The impact of anti-corruption on companies is indirect. As long as senior management are not investigated/arrested, the impact on stock price isn’t significant.
However, investors not only need to consider the problem of sales growth slowing down in the context of anti-corruption, but also consider whether companies is engaging in financial fraud. 


Anti-Corruption in China Healthcare – the Impact and the Outlook

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)

China's Rising Role in Global ADC Partnership Wave - Opportunities and Risks Behind the Gold Rush

As China's ADCs continue to gain recognition from global buyers,the position of Chinese pharmaceutical companies is undergoing fundamental...

Xinyao (Criss) Wang

China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

Some popular companies are favored by capital on the back of enthusiasm for weight loss drugs, but sometimes it's just "conceptual hype". We need...

Xinyao (Criss) Wang

China's Weight Loss Drug Market – The Investment Opportunities and the Risks Behind

The GLP-1 target has been recognized as a blockbuster target, which has attracted great enthusiasm from investors.We analyzed related investment...

Xinyao (Criss) Wang

Anti-Corruption in China Healthcare – the Impact and the Outlook

The share prices of China healthcare are now plummeting due to anti-corruption campaign, which will reach a climax in 23H2 (We'll post updates in...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China's Rising Role in Global ADC Partnership Wave - Opportunities and Risks Behind the Gold Rush

As China's ADCs continue to gain recognition from global buyers,the position of Chinese pharmaceutical companies is undergoing fundamental...

Xinyao (Criss) Wang

China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

Some popular companies are favored by capital on the back of enthusiasm for weight loss drugs, but sometimes it's just "conceptual hype". We need...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.3)-Share Price Correction,Valuable Shortcut,Globalization Vs Innovation

Success of globalization ultimately relies on strong innovative capabilities. Here's how to distinguish valuable shortcuts - Me-Too strategy....

Xinyao (Criss) Wang

China's Weight Loss Drug Market – The Investment Opportunities and the Risks Behind

The GLP-1 target has been recognized as a blockbuster target, which has attracted great enthusiasm from investors.We analyzed related investment...

Xinyao (Criss) Wang

Anti-Corruption in China Healthcare – the Impact and the Outlook

The share prices of China healthcare are now plummeting due to anti-corruption campaign, which will reach a climax in 23H2 (We'll post updates in...

Xinyao (Criss) Wang