Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 21st.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the inflows to be USD 2.1billion and highlight flows for Tencent, Hsbc.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 21st.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the inflows to be USD 2.1billion and highlight flows for Tencent, Hsbc.


Hong Kong Connect Flows (Jul 21st): Tencent, HSBC

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.2% as of Jul 21st.</li>
<li>The average A-H premium changed by -1.8ppt week on week, led by consumer staples, communication services, information technology and offset by real estate, utilities.</li>
<li>We highlight weekly changes in A-H premium for China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng, China Longyuan.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.2% as of Jul 21st.
The average A-H premium changed by -1.8ppt week on week, led by consumer staples, communication services, information technology and offset by real estate, utilities.
We highlight weekly changes in A-H premium for China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng, China Longyuan.


A-H Premium Weekly (Jul 21st): China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Porton Pharma Solutions / Equity Bottom-Up

<ul>
<li>Porton’s performance declined significantly in 23H1 compared with high base last year, because most of Pfizer’s COVID-19 big orders have been completed. Porton's performance in 2023 would be under pressure.</li>
<li>Porton isn’t a first-tier CXO and lags behind industry leaders in terms of new businesses (CGT/ADC CXO). Valuation of entire CXO sector and Porton hasn’t yet reached an inflection point.</li>
<li>Market's expectation for CXO would decrease and then bottom out in 2023H2. Whether CXO's performance would rebound in 2024 still needs to wait for the turnaround in macro environment.</li>
</ul>


Porton’s performance declined significantly in 23H1 compared with high base last year, because most of Pfizer’s COVID-19 big orders have been completed. Porton's performance in 2023 would be under pressure.
Porton isn’t a first-tier CXO and lags behind industry leaders in terms of new businesses (CGT/ADC CXO). Valuation of entire CXO sector and Porton hasn’t yet reached an inflection point.
Market's expectation for CXO would decrease and then bottom out in 2023H2. Whether CXO's performance would rebound in 2024 still needs to wait for the turnaround in macro environment.


Porton Pharma Solutions (300363.CH) 23H1 - Performance Pressure Would Remain in 2023

<ul>
<li>The "Monkey Price Index" could be a direct indicator of the fervor of biopharmaceutical development, and the accounting treatment of biological assets would have a big impact on Joinn’s performance.</li>
<li>The current business layout, strategy, revenue structure, CXO industry trend as well as the domestic negative policy impact would cast doubts on Joinn’s future development.</li>
<li>Based on our analysis, Joinn still lacks the strong logic to support its long-term growth and high valuation. Therefore, we are conservative about Joinn’s outlook at the current stage.</li>
</ul>


The "Monkey Price Index" could be a direct indicator of the fervor of biopharmaceutical development, and the accounting treatment of biological assets would have a big impact on Joinn’s performance.
The current business layout, strategy, revenue structure, CXO industry trend as well as the domestic negative policy impact would cast doubts on Joinn’s future development.
Based on our analysis, Joinn still lacks the strong logic to support its long-term growth and high valuation. Therefore, we are conservative about Joinn’s outlook at the current stage.


Joinn Laboratories (6127.HK) - Concerns Begin to Arise when the Monkeys Become More Expensive

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Joinn released estimated preliminary results for 1H23E, expecting revenue of RMB973-1,051mn, up 25.3-35.3% YoY, and attributable net income of RMB73- 110mn, down 70.4-80.4% YoY.</li><li>Specifically, the Company expected its laboratory services (core business) to contribute net profit of RMB189-204mn in 1H23E, up 26.3-36.3% YoY, while incurring net loss from the change of fair value of biological assets of RMB177-189mn, compared with net fair value gain of biological assets of RMB121mn in 1H22.</li><li>We think the core business of Joinn has maintained a healthy growth momentum, which was a solid performance amid the challenging macro environment in both domestic and international markets, including the China-US tension and the declining healthcare funding leading to the adjustment of R&amp;D activities. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Joinn released estimated preliminary results for 1H23E, expecting revenue of RMB973-1,051mn, up 25.3-35.3% YoY, and attributable net income of RMB73- 110mn, down 70.4-80.4% YoY.Specifically, the Company expected its laboratory services (core business) to contribute net profit of RMB189-204mn in 1H23E, up 26.3-36.3% YoY, while incurring net loss from the change of fair value of biological assets of RMB177-189mn, compared with net fair value gain of biological assets of RMB121mn in 1H22.We think the core business of Joinn has maintained a healthy growth momentum, which was a solid performance amid the challenging macro environment in both domestic and international markets, including the China-US tension and the declining healthcare funding leading to the adjustment of R&amp;D activities. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Joinn Laboratories (6127 HK) – Core Business Maintains a Healthy Growth Momentum

China

JOINN Laboratories is a specialized drug development outsourcing company (CRO) that provides non-clinical pharmacology and toxicology research and evaluation services, including drug safety assessment, pharmacodynamic, and pharmacokinetic studies. The company also offers clinical trial services and the production and sale of experimental models. Headquartered in Beijing, China, it was founded in 1995.

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JOINN Laboratories (6127 HK)

Hong Kong Connect Flows (Jul 21st): Tencent, HSBC

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Tencent Holdings Limited and, HSBC.

Ke Yan, CFA, FRM

A-H Premium Weekly (Jul 21st): China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng

We analyzed A-H premium changes in the past week and highlight A-H premium changes for China Vanke, New China Life, BYD, CMOC, Asymchem, Huaneng,...

Ke Yan, CFA, FRM

Porton Pharma Solutions (300363.CH) 23H1 - Performance Pressure Would Remain in 2023

Porton's weak performance will continue in 23H2. As a latecomer, its ADC CDMO business is still at early stage. When the entire sector is at bottom...

Xinyao (Criss) Wang