HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Kintor Pharmaceutical / Equity Capital Markets

<ul>
<li>Over the past year, we've seen the stock price of Kintor fluctuate largely, which was mainly driven by its COVID-19 drug proxalutamide. However, we are not optimistic about its outlook.</li>
<li>There are big concerns about the credibility of management. The suspicion caused by mistrust leads us to suggest that investors directly enter the "show me the result" mode.</li>
<li>Shares plunged after the announcement of the Placing. Obviously, <a href="https://www.smartkarma.com/entities/kintor-pharmaceutical" target="_blank" data-smartkarma-citation="entities:28884:1" rel="noopener">Kintor Pharmaceutical (9939 HK)</a> is short of money. Considering the potential risks behind, we are bearish on Kintor. </li>
</ul>


Over the past year, we've seen the stock price of Kintor fluctuate largely, which was mainly driven by its COVID-19 drug proxalutamide. However, we are not optimistic about its outlook.
There are big concerns about the credibility of management. The suspicion caused by mistrust leads us to suggest that investors directly enter the "show me the result" mode.
Shares plunged after the announcement of the Placing. Obviously, Kintor Pharmaceutical (9939 HK) is short of money. Considering the potential risks behind, we are bearish on Kintor. 


Kintor Pharmaceutical (9939.HK) Placement - The Hidden Risks and the True Colors

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 analyzed the latest HK SFC report for aggregate short position as of Apr 8th. Due to public holiday in Hong Kong, the announcement was delayed by 2 days.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight property names that saw short interest increase last week: Cifi, Country Garden, Country Garden services, and Kintor which reported Phase 3 clinical trial results for COVID-19 treatment.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Apr 8th. Due to public holiday in Hong Kong, the announcement was delayed by 2 days.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight property names that saw short interest increase last week: Cifi, Country Garden, Country Garden services, and Kintor which reported Phase 3 clinical trial results for COVID-19 treatment.


In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine.Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In 2020, Southbound trading accounted for 22% of the equity market ADT. We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight inflows into Tencent Holdings Limited (700 HK), Meituan (3690 HK),  as well as outflows from Wuxi Biologics (Cayman) Inc. (2269 HK).

In our weekly HK Connect Flow series, we aim to highlight key stocks and sectors which the mainland investors traded via the southbound Hong Kong Connect, as analyzed by our proprietary data engine.Since the opening of Hong Kong Connect scheme in 2014, southbound Chinese money started to play an increasingly important role in the Hong Kong stock market. In 2020, Southbound trading accounted for 22% of the equity market ADT. We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.In this insight, we will highlight inflows into Tencent Holdings Limited (700 HK), Meituan (3690 HK),  as well as outflows from Wuxi Biologics (Cayman) Inc. (2269 HK).

Hong Kong Connect Flows: Tencent, Meituan, Wuxi Biologics, Kintor

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Kintor Pharmaceutical has a strong pipeline of seven first/best-in-class small molecule and biological therapeutics, with focus on multiple high incidence cancers and other androgen-receptor-related diseases having huge unmet medical needs. The company is set to launch its first product in China in this year, with sales expected to peak in next five years. Kintor also aims to launch at least two more products by the end of 2022. Apart from the base indications, its lead product has shown positive clinical results in COVID-19 trials, demonstrating its potential to become an effective treatment for the COVID-19 among the current therapies. In H1 2021, Kintor’s R&amp;D expenses increased 90% y/y to $42 million. In June, the company completed top-up placing with net proceeds of HKD 1.16 billion ($150 million). As of June 2021, Kintor had a cash balance of $262 million, which is sufficient to support its near-term R&amp;D and capital expenses. Although the stock has gained more than 400% this year, we believe there are more streams left. Following its listing in HKEX in May 2020, the stock was included in Hang Seng Composite Index this year. With the expected approvals for COVID-19, prostate cancer, and breast cancer, Kintor’s lead product has large market potential. The company aims to outlicense select products for rapid global expansions.

Kintor Pharmaceutical has a strong pipeline of seven first/best-in-class small molecule and biological therapeutics, with focus on multiple high incidence cancers and other androgen-receptor-related diseases having huge unmet medical needs. The company is set to launch its first product in China in this year, with sales expected to peak in next five years. Kintor also aims to launch at least two more products by the end of 2022. Apart from the base indications, its lead product has shown positive clinical results in COVID-19 trials, demonstrating its potential to become an effective treatment for the COVID-19 among the current therapies. In H1 2021, Kintor’s R&amp;D expenses increased 90% y/y to $42 million. In June, the company completed top-up placing with net proceeds of HKD 1.16 billion ($150 million). As of June 2021, Kintor had a cash balance of $262 million, which is sufficient to support its near-term R&amp;D and capital expenses. Although the stock has gained more than 400% this year, we believe there are more streams left. Following its listing in HKEX in May 2020, the stock was included in Hang Seng Composite Index this year. With the expected approvals for COVID-19, prostate cancer, and breast cancer, Kintor’s lead product has large market potential. The company aims to outlicense select products for rapid global expansions.   

Kintor Pharmaceutical (9939 HK) – Dual Play on COVID and Solid Tumors

Yonghe Medical Group / Equity Capital Markets

Modern fast pace of life and huge work pressure make hair loss anxiety spread to all kinds of groups. As people pay more attention to hair, the awareness of hair health and management is gradually awakening, and hair transplantation is one of the solutions. On June 17, <a href="https://www.smartkarma.com/entities/yonghe-medical-group-co-ltd" target="_blank" data-smartkarma-citation="entities:33521:1" rel="noopener">Yonghe Medical Group (YMG HK)</a> formally submitted its prospectus to the HKEX and planned to be listed on the main board. If everything goes well, Yonghe will be the first listed company in the field of hair transplantation in China. However, despite the promising market potential, there are some concerns of the Company that deserve investors’ attention.

Modern fast pace of life and huge work pressure make hair loss anxiety spread to all kinds of groups. As people pay more attention to hair, the awareness of hair health and management is gradually awakening, and hair transplantation is one of the solutions. On June 17, Yonghe Medical Group (YMG HK) formally submitted its prospectus to the HKEX and planned to be listed on the main board. If everything goes well, Yonghe will be the first listed company in the field of hair transplantation in China. However, despite the promising market potential, there are some concerns of the Company that deserve investors’ attention.

Pre-IPO Yonghe Medical Group - Here Are the Concerns

China

Kintor Pharmaceutical is a clinical-stage biotechnology company focused on developing innovative small molecule and biological therapeutics for dermatology and oncology, including treatments for androgenetic alopecia, acne vulgaris, and various cancers. The company also develops high-end cosmetics. Kintor Pharmaceutical was founded in 2009 and is headquartered in Suzhou, People's Republic of China.

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Kintor Pharmaceutical (9939 HK)