Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Livzon Pharmaceutical Group / Equity Bottom-Up

<ul>
<li>Back in late 2020, <a href="https://www.smartkarma.com/entities/livzon-pharmaceutical-group-inc" target="_blank" data-smartkarma-citation="entities:18726:1" rel="noopener">Livzon Pharmaceutical Group (1513 HK)</a> proposed spinning off 39.4%-held Livzon Diagnostics on Chinext. After numerous filings with the regulators ... crickets.  </li>
<li>Livzon has now proposed listing Livzon Diagnostics on the National Equities Exchange and Quotations with an intention of transitioning listed shares to the Beijing Stock Exchange (BSE).</li>
<li>The CSRC recently introduced a raft of initiatives to spur investor interest in the BSE. After all-but-abandoning the prior listing, Livzon looks to be cashing in on this recent excitement. </li>
</ul>


Back in late 2020, Livzon Pharmaceutical Group (1513 HK) proposed spinning off 39.4%-held Livzon Diagnostics on Chinext. After numerous filings with the regulators ... crickets.  
Livzon has now proposed listing Livzon Diagnostics on the National Equities Exchange and Quotations with an intention of transitioning listed shares to the Beijing Stock Exchange (BSE).
The CSRC recently introduced a raft of initiatives to spur investor interest in the BSE. After all-but-abandoning the prior listing, Livzon looks to be cashing in on this recent excitement. 


HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>The results of the first VBP of TCM formula granules in China were announced. 200 varieties of TCM formula granules have been included, with an average price reduction of 50.77%.</li>
<li>According to the recently released Statistical Bulletin on the Development of Health Care in 2022, we have listed some key points worth investors' attention.</li>
<li>Livzon’s 23Q3 performance was below expectations, which was more related to external factors such as anti-corruption campaign, VBP. However, Chairman's share buyback proposal indicates possibility of a future reversal.</li>
</ul>


The results of the first VBP of TCM formula granules in China were announced. 200 varieties of TCM formula granules have been included, with an average price reduction of 50.77%.
According to the recently released Statistical Bulletin on the Development of Health Care in 2022, we have listed some key points worth investors' attention.
Livzon’s 23Q3 performance was below expectations, which was more related to external factors such as anti-corruption campaign, VBP. However, Chairman's share buyback proposal indicates possibility of a future reversal.


China Healthcare Weekly (Oct.27) - TCM Formula Granules VBP, Medical Statistics to Watch, Livzon

Equity Capital Markets

Qyuns Therapeutics / Equity Capital Markets

<ul>
<li>The sales scale of drugs for autoimmune diseases in China is much lower than that in overseas markets. So, internationalization is inevitable for companies in this industry.</li>
<li>Qyuns’s candidates have to face fierce competition, with no advantage in R&amp;D progress.Since Qyuns mainly do clinical trials in China, its future valuation is hard to have big expansion potential.</li>
<li>Many investors may still “live in the illusion” for China biotech. We think Qyuns would not finally transform into a biopharma. Its valuation should be lower than Keymed.</li>
</ul>


The sales scale of drugs for autoimmune diseases in China is much lower than that in overseas markets. So, internationalization is inevitable for companies in this industry.
Qyuns’s candidates have to face fierce competition, with no advantage in R&amp;D progress.Since Qyuns mainly do clinical trials in China, its future valuation is hard to have big expansion potential.
Many investors may still “live in the illusion” for China biotech. We think Qyuns would not finally transform into a biopharma. Its valuation should be lower than Keymed.


Pre-IPO Qyuns Therapeutics - Conservative About the Outlook

The United Laboratories International Holdings Limited / Equity Capital Markets

The United Laboratories International Holdings Limited

<ul>
<li>Last year, United Lab mainly relied on antibiotics to make money. However, after the pandemic is under control, antibiotic sales may decline. United Lab’s performance could be under pressure.</li>
<li>As a late comer, sales of United Lab’s weight management products could be lower than expected in the future under increasing competition. The veterinary drugs business requires time to cultivate.</li>
<li>RMB12 billion market value of United Lab has priced in all positive factors.There could be a pullback in valuation. RMB6 billion market value is a safe place to go long.</li>
</ul>


Last year, United Lab mainly relied on antibiotics to make money. However, after the pandemic is under control, antibiotic sales may decline. United Lab’s performance could be under pressure.
As a late comer, sales of United Lab’s weight management products could be lower than expected in the future under increasing competition. The veterinary drugs business requires time to cultivate.
RMB12 billion market value of United Lab has priced in all positive factors.There could be a pullback in valuation. RMB6 billion market value is a safe place to go long.


United Laboratories International Holdings Placement (3933.HK) - Valuation Pullback Seems Inevitable

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 analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.0% as of Jul 28th.</li>
<li>The average A-H premium changed by 0.8ppt week on week, led by information technology, communication services, energy and offset by health care, consumer staples.</li>
<li>We highlight weekly changes in A-H premium for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.0% as of Jul 28th.
The average A-H premium changed by 0.8ppt week on week, led by information technology, communication services, energy and offset by health care, consumer staples.
We highlight weekly changes in A-H premium for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.


A-H Premium Weekly (Jul 28th): China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC

China

Livzon Pharmaceutical Group Inc. develops and manufactures pharmaceutical products, including chemical medicines, bio-chemical medicines, biological engineering medicines, chemical compound crude medicines, antibiotics, micro-ecological preparations, patent Chinese medicines, and diagnosis reagents etc.

Livzon Pharmaceutical Group (1513 HK)

Livzon Reloads Diagnostic Spin-Off

Livzon is trading below its five year averages for all metrics - both trailing and forward. I'd probably be picking up shares around here. But it...

David Blennerhassett

China Healthcare Weekly (Oct.27) - TCM Formula Granules VBP, Medical Statistics to Watch, Livzon

Results of the first TCM formula granule VBP were announced. Some key points of Statistical Bulletin on the Development of Health Care worth...

Xinyao (Criss) Wang

Pre-IPO Qyuns Therapeutics - Conservative About the Outlook

Qyuns’s pipeline lacks competitiveness, facing fierce competition.Together with bleak internationalization outlook, peak sales have obvious...

Xinyao (Criss) Wang

United Laboratories International Holdings Placement (3933.HK) - Valuation Pullback Seems Inevitable

United Lab is facing a performance decline when the dividend period of the pandemic has subsided. Weight management/veterinary drug businesses have...

Xinyao (Criss) Wang

A-H Premium Weekly (Jul 28th): China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC

We analyzed A-H premium changes in the past week and highlight A-H premium changes for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.

Ke Yan, CFA, FRM