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.

Equity Bottom-Up

<ul><li>RemeGen recorded RMB1.08bn of revenue in FY23, including RMB1.05bn from product sales (+42% YoY), contributed equally by RC18 and RC48.</li><li>In FY23, GP margin (vs product sales) increased to 76.9% (vs 63.4% in FY22).</li><li>Selling expense ratio (vs product sales) increased from 60% in FY22 to 74% in FY23, mainly due to an increase in sales headcount. </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>

RemeGen recorded RMB1.08bn of revenue in FY23, including RMB1.05bn from product sales (+42% YoY), contributed equally by RC18 and RC48.In FY23, GP margin (vs product sales) increased to 76.9% (vs 63.4% in FY22).Selling expense ratio (vs product sales) increased from 60% in FY22 to 74% in FY23, mainly due to an increase in sales headcount. 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.

RemeGen (9995 HK) - Awaiting the Fruition of Overseas BD Collaborations

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>We believe RemeGen has bottom fishing value because its Systemic Lupus Erythematosus (SLE) drug Telitacicept (RC18) has already been approved for sale in China.</li>
<li>Earliest data read in US clinical trial for IgA Nephropathy is already available, with SLE data read available in C3Q24 and MS in C4Q24;</li>
<li>We don’t think a leading biotech from the wealthy city of Yantai will run out of cash. We assume RemeGen will be able to mitigate its liquidity problem.</li>
</ul>


We believe RemeGen has bottom fishing value because its Systemic Lupus Erythematosus (SLE) drug Telitacicept (RC18) has already been approved for sale in China.
Earliest data read in US clinical trial for IgA Nephropathy is already available, with SLE data read available in C3Q24 and MS in C4Q24;
We don’t think a leading biotech from the wealthy city of Yantai will run out of cash. We assume RemeGen will be able to mitigate its liquidity problem.


[RemeGen (9995 HK, BUY, TP HK$34) Rating Change]: Time to Do Some Bottom Fishing…UG to BUY

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>One direct reason for the sharp drop in stock prices is that RemeGen's performance in 23Q4 would miss expectation, thus leading to disappointing performance for the entire year of 2023.</li>
<li>Due to low competitiveness of pipelines, product sales are hard to bring sufficient cashflow.Prospects for future license-out deals are still uncertain. RemeGen may find it difficult to turn the tide.</li>
<li>Reasonable market value of Remegen should be above RMB12 billion. Investors can participate in the rebounds after stock price plunge, but we do not recommend holding for the long term.</li>
</ul>


One direct reason for the sharp drop in stock prices is that RemeGen's performance in 23Q4 would miss expectation, thus leading to disappointing performance for the entire year of 2023.
Due to low competitiveness of pipelines, product sales are hard to bring sufficient cashflow.Prospects for future license-out deals are still uncertain. RemeGen may find it difficult to turn the tide.
Reasonable market value of Remegen should be above RMB12 billion. Investors can participate in the rebounds after stock price plunge, but we do not recommend holding for the long term.


Remegen (9995.HK/688331.CH) - The Real Reasons for the Stock Price Collapse and the Future Prospects

Equity Capital Markets

<ul>
<li>Remegen’s product revenue fails to cover R&amp;D expenses and its sales profit is negative, which means that RemeGen’s cost control is disappointing, and the main problem is high selling expenses.</li>
<li>If RemeGen continues to follow the old path, breakeven will be further out of reach. In other words, we don’t think that the A-share placement will materially change the outlook.</li>
<li>Remegen’s reasonable market value is RMB12-18 billion. If above RMB18 billion, it’s recommended investors take profits in time. If below RMB12 billion, investors could buy and wait for a rebound.</li>
</ul>


Remegen’s product revenue fails to cover R&amp;D expenses and its sales profit is negative, which means that RemeGen’s cost control is disappointing, and the main problem is high selling expenses.
If RemeGen continues to follow the old path, breakeven will be further out of reach. In other words, we don’t think that the A-share placement will materially change the outlook.
Remegen’s reasonable market value is RMB12-18 billion. If above RMB18 billion, it’s recommended investors take profits in time. If below RMB12 billion, investors could buy and wait for a rebound.


Remegen (9995.HK/688331.CH) - The Placement Won’t Solve the Problem

<ul>
<li>Although RemeGen’s 23Q1-Q3 sales was better-than-expected, the Company is difficult to achieve management's performance guidance for 2023. Since RemeGen’s commercialization logic has “undeniable flaws”, net loss would be further widened.</li>
<li>Cash balance of RemeGen was just RMB600 million by 23Q3, which is not enough to cover its high R&amp;D/SG&amp;A expenses. If RemeGen cannot secure sufficient financing timely, risks are significant.</li>
<li>The current valuation and investors’ expectations for RemeGen largely rely on the potential license-out deal of RC18. However, we remain caution until RC18 has sufficient evidence to win head-to-head trial.</li>
</ul>


Although RemeGen’s 23Q1-Q3 sales was better-than-expected, the Company is difficult to achieve management's performance guidance for 2023. Since RemeGen’s commercialization logic has “undeniable flaws”, net loss would be further widened.
Cash balance of RemeGen was just RMB600 million by 23Q3, which is not enough to cover its high R&amp;D/SG&amp;A expenses. If RemeGen cannot secure sufficient financing timely, risks are significant.
The current valuation and investors’ expectations for RemeGen largely rely on the potential license-out deal of RC18. However, we remain caution until RC18 has sufficient evidence to win head-to-head trial.


Remegen (9995.HK/688331.CH) - The Survival Problem Is Becoming Imminent

China

RemeGen Co., Ltd. operates biotechnology businesses. The Company develops therapeutic antibody drugs such as antibody drug conjugates (ADC), antibody fusion proteins, monoclonal antibodies and double antibodies. RemeGen provides solutions autoimmune diseases, tumor diseases, and ophthalmic diseases.

Remegen (9995 HK)

RemeGen (9995 HK) - Awaiting the Fruition of Overseas BD Collaborations

RemeGen recorded RMB1.08bn of revenue in FY23, including RMB1.05bn from product sales (+42% YoY), contributed equally by RC18 and RC48.

CMB International

[RemeGen (9995 HK, BUY, TP HK$34) Rating Change]: Time to Do Some Bottom Fishing…UG to BUY

RemeGen's approved SLE drug in China and available data from clinical trials suggest potential value, despite liquidity concerns.We thus upgrade...

Blue Lotus Research Institute

Remegen (9995.HK/688331.CH) - The Real Reasons for the Stock Price Collapse and the Future Prospects

RemeGen's 23Q4 results will miss expectation, leading to poor performance for 2023.The pain point isn't cashflow shortage but weak...

Xinyao (Criss) Wang

Remegen (9995.HK/688331.CH) - The Placement Won’t Solve the Problem

Remegen's breakeven becomes out of reach due to high selling expenses. A-share placement unlikely to improve outlook. Investors advised to monitor...

Xinyao (Criss) Wang

Remegen (9995.HK/688331.CH) - The Survival Problem Is Becoming Imminent

Due to “undeniable flaw” in commercialization logic, RemeGen has to face high cost/low efficiency, leading to increasing net loss.RemeGen is short...

Xinyao (Criss) Wang

RemeGen (9995 HK) - Awaiting the Fruition of Overseas BD Collaborations

RemeGen recorded RMB1.08bn of revenue in FY23, including RMB1.05bn from product sales (+42% YoY), contributed equally by RC18 and RC48.

CMB International

[RemeGen (9995 HK, BUY, TP HK$34) Rating Change]: Time to Do Some Bottom Fishing…UG to BUY

​RemeGen's approved SLE drug in China and available data from clinical trials suggest potential value, despite liquidity concerns.We thus upgrade...

Blue Lotus Research Institute

Remegen (9995.HK/688331.CH) - The Real Reasons for the Stock Price Collapse and the Future Prospects

RemeGen's 23Q4 results will miss expectation, leading to poor performance for 2023.The pain point isn't cashflow shortage but weak...

Xinyao (Criss) Wang

Remegen (9995.HK/688331.CH) - The Placement Won’t Solve the Problem

​Remegen's breakeven becomes out of reach due to high selling expenses. A-share placement unlikely to improve outlook. Investors advised to monitor...

Xinyao (Criss) Wang

Remegen (9995.HK/688331.CH) - The Survival Problem Is Becoming Imminent

Due to “undeniable flaw” in commercialization logic, RemeGen has to face high cost/low efficiency, leading to increasing net loss.RemeGen is short...

Xinyao (Criss) Wang

RemeGen's approved SLE drug in China and available data from clinical trials suggest potential value, despite liquidity concerns.We thus upgrade...

Remegen's breakeven becomes out of reach due to high selling expenses. A-share placement unlikely to improve outlook. Investors advised to monitor...