HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shanghai Henlius Biotech  / Equity Bottom-Up

<ul>
<li>LVC increased its holding of Henlius by 1,110,900 shares on January 23, reflecting its high recognition of the Company and optimism on its prospects, despite the biosimilar VBP headwinds.</li>
<li>Even with concerns, LVC still repeatedly invested in Henlius at a valuation far higher than its actual value, offering support with real money during pre-IPO stage.</li>
<li>Lin Lijun’s dissenting vote was a deliberate decision. We are interested to see Lin's next move. Lin should have a very clear understanding of the true value of Henlius.</li>
</ul>


LVC increased its holding of Henlius by 1,110,900 shares on January 23, reflecting its high recognition of the Company and optimism on its prospects, despite the biosimilar VBP headwinds.
Even with concerns, LVC still repeatedly invested in Henlius at a valuation far higher than its actual value, offering support with real money during pre-IPO stage.
Lin Lijun’s dissenting vote was a deliberate decision. We are interested to see Lin's next move. Lin should have a very clear understanding of the true value of Henlius.


Shanghai Henlius Biotech (2696 HK) - LVC Increased Its Holding of Henlius Again

<ul>
<li>There have been quite a few M&amp;As in the field of TCM, with a clear trend of SOEs taking over TCM enterprises due to strategically significant and advantageous integration.</li>
<li>Whether a drug can be approved does not depend on whether it has entered Phase II/III trials. The areas with clearly unmet medical needs often indicate good investment opportunities.</li>
<li>The privatization of Henlius failed. Lin Lijun's dissenting vote was based on a deliberate decision. We are optimistic about the outlook of Henlius due to its strong fundamentals and internationalization. </li>
</ul>


There have been quite a few M&amp;As in the field of TCM, with a clear trend of SOEs taking over TCM enterprises due to strategically significant and advantageous integration.
Whether a drug can be approved does not depend on whether it has entered Phase II/III trials. The areas with clearly unmet medical needs often indicate good investment opportunities.
The privatization of Henlius failed. Lin Lijun's dissenting vote was based on a deliberate decision. We are optimistic about the outlook of Henlius due to its strong fundamentals and internationalization. 


China Healthcare Weekly (Jan.26) - Key Takeaways from the Failure of Henlius Privatization, TCM M&As

<ul>
<li>Lin Lijun voted against the privatization, which is in line with our analysis.Lin and some other long-term investors expressed their "dissatisfaction" by opposing the privatization due to disappointing Cancellation Price.</li>
<li>Due to deal break, Henlius’ share price could be under pressure in short term.Investors may need to wait until the implementation of biosimilar VBP in 2025 to see situation clearly.</li>
<li>Despite biosimilar VBP, we remain optimistic about the outlook of Henlius, because its future development positioning will not be limited to just biosimilars, but will focus on internationalization.</li>
</ul>


Lin Lijun voted against the privatization, which is in line with our analysis.Lin and some other long-term investors expressed their "dissatisfaction" by opposing the privatization due to disappointing Cancellation Price.
Due to deal break, Henlius’ share price could be under pressure in short term.Investors may need to wait until the implementation of biosimilar VBP in 2025 to see situation clearly.
Despite biosimilar VBP, we remain optimistic about the outlook of Henlius, because its future development positioning will not be limited to just biosimilars, but will focus on internationalization.


Shanghai Henlius Biotech (2696 HK) - About the Deal Break and the Valuation Outlook

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The question was asked in <a href="https://skr.ma/2qNon" target="_blank" rel="noopener">Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal?</a> Well, now we have one as LVC inexplicably <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0122/2025012200662.pdf" target="_blank" rel="noopener">blocked</a>.</li>
<li>It didn’t appear to make economic rationale for LVC to crash the party - knowing they would do so, and not bother to reduce their position accordingly.</li>
<li>In tandem with the <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">TCM (570 HK)</a> debacle, it sets another bad precedent for future/existing Hong Kong  events. Expect spreads for HK arbs to widen. And Henlius to crater.</li>
</ul>


The question was asked in Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal? Well, now we have one as LVC inexplicably blocked.
It didn’t appear to make economic rationale for LVC to crash the party - knowing they would do so, and not bother to reduce their position accordingly.
In tandem with the TCM (570 HK) debacle, it sets another bad precedent for future/existing Hong Kong  events. Expect spreads for HK arbs to widen. And Henlius to crater.


Henlius (2696)'s Fail Sets (Another) Bad Precedent

<ul>
<li>Fosun hopes to privatize Henlius at a low price. As usual, it does not consider the interests of long-term investors, who may express their "dissatisfaction" by opposing the privatization.</li>
<li>Lin Lijun clearly has bargaining chips. He may ask Fosun to provide a clear plan for future relisting/asset restructuring, and how the Share Alternative will be linked to this plan.</li>
<li>There is a possibility this privatization may fail. Such possibility is not low, because investors will only support the privatization if they can be sure that their interests are protected.</li>
</ul>


Fosun hopes to privatize Henlius at a low price. As usual, it does not consider the interests of long-term investors, who may express their "dissatisfaction" by opposing the privatization.
Lin Lijun clearly has bargaining chips. He may ask Fosun to provide a clear plan for future relisting/asset restructuring, and how the Share Alternative will be linked to this plan.
There is a possibility this privatization may fail. Such possibility is not low, because investors will only support the privatization if they can be sure that their interests are protected.


Shanghai Henlius Biotech (2696 HK)- These Are the Reasons Why LVC May Vote Against the Privatization

China

Shanghai Henlius Biotech, Inc develops and produces drugs. The Company develops and produces monoclonal antibody biosimilar drugs, bio betters, novel monoclonal antibodys, and other drugs. Shanghai Henlius Biotech throughout China.

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Shanghai Henlius Biotech (2696 HK)