HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/remegen-ltd" target="_blank" data-smartkarma-citation="entities:29191:1" rel="noopener">Remegen Ltd (1788976D CH) </a>is an innovative bio-pharmaceutical company dedicated to the development and commercialization of first-in-class and best-in-class biological drugs. The two core products of <a href="https://www.smartkarma.com/entities/remegen-ltd" target="_blank" data-smartkarma-citation="entities:29191:1" rel="noopener">Remegen Ltd (1788976D CH)</a>  are RC18 and RC48 (Related article: <a href="https://www.smartkarma.com/compose/insight/45020/Pre-IPO%20RemeGen%20-%20Insights%20on%20Two%20Core%20Products%20RC18%20&amp;%20RC48.%20Read%20more:%20https:/skr.ma/sxMEQ" target="_blank" rel="noopener">Pre-IPO RemeGen - Insights on Two Core Products RC18 &amp; RC48. Read more: https://skr.ma/sxMEQ</a>). It is said that the Company is going to be listed on HKEX at a price of HK$52.1/share in November. In terms of valuation, is RemeGen overvalued? </p>

Remegen Ltd (1788976D CH) is an innovative bio-pharmaceutical company dedicated to the development and commercialization of first-in-class and best-in-class biological drugs. The two core products of Remegen Ltd (1788976D CH)  are RC18 and RC48 (Related article: Pre-IPO RemeGen - Insights on Two Core Products RC18 &amp; RC48. Read more: https://skr.ma/sxMEQ). It is said that the Company is going to be listed on HKEX at a price of HK$52.1/share in November. In terms of valuation, is RemeGen overvalued? 

A Different Angle - RemeGen Vs Akeso (Insights on Valuation)

Thematic (Sector/Industry)

<p><strong>1. Industry viewpoints: </strong></p>
<ul>
<li>The IVD industry in China is a great place to invest in terms of market size, industry prosperity and growth potential.</li>
<li>With the rapid aging of the population, there is an increasing need for high-quality medical and nursing care for the elderly.</li>
<li>With the gradual homogenization of China's biotechnology industry, how to seek differentiated development has become the key.</li>
</ul>
<p style="text-align: start;"><strong>2. Company news:</strong></p>
<p style="text-align: start;">News from CStone Pharmaceuticals, Reistone Biopharma, Sino Biopharm and Fosun Pharma on new licensing deals and progress on innovative drugs. </p>
<p style="text-align: start;"><strong>3. Market review:</strong></p>
<p style="text-align: start;">Last week, stock price for healthcare sector in A share rose 2.79%, while CSI 300 decreased 0.49% over the same period of time.   </p>
<p><strong>4. Risk Disclosure:</strong></p>
<p style="text-align: start;">Policy risk, R&amp;D risk, Company risk and COVID-19 risk</p>

1. Industry viewpoints: 

The IVD industry in China is a great place to invest in terms of market size, industry prosperity and growth potential.
With the rapid aging of the population, there is an increasing need for high-quality medical and nursing care for the elderly.
With the gradual homogenization of China's biotechnology industry, how to seek differentiated development has become the key.

2. Company news:
News from CStone Pharmaceuticals, Reistone Biopharma, Sino Biopharm and Fosun Pharma on new licensing deals and progress on innovative drugs. 
3. Market review:
Last week, stock price for healthcare sector in A share rose 2.79%, while CSI 300 decreased 0.49% over the same period of time.   
4. Risk Disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<div><p><a href="https://www.smartkarma.com/entities/remegen-ltd" target="_blank" data-smartkarma-citation="entities:29191:1" rel="noopener">Remegen Ltd (1788976D CH)</a> is a biopharmaceutical company with a focus on the development and commercialisation of innovative and differentiated biologics for the treatment of autoimmune, oncology and ophthalmic diseases. RemeGen has launched a Hong Kong IPO to raise net proceeds of HK$3,710.5 million ($479 million) at the mid-point of the IPO price range of HK$50.30-52.10 per share.</p></div><div><p>Nineteen cornerstone investors have agreed to invest about $227.5 million in the IPO (44.99% of the offer shares at the mid-point of the IPO price range). Cornerstone investors which are not existing shareholders include Fidelity International, BlackRock, Matthews Funds, Hillhouse Capital, GIC, Cormorant Asset Management and <a href="https://www.smartkarma.com/entities/sino-biopharmaceutical" target="_blank" data-smartkarma-citation="entities:230:1" rel="noopener">Sino Biopharmaceutical (1177 HK)</a>. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/remegen-ipo-initiation-seeking-a-cure" target="_blank" rel="noopener">our initiation note</a>, we stated that the prospectus RemeGen’s core drug assets are favourable. Overall, a strong cornerstone investor lineup and our valuation analysis suggest that the IPO price range is attractive. </p></div></div></div>

Remegen Ltd (1788976D CH) is a biopharmaceutical company with a focus on the development and commercialisation of innovative and differentiated biologics for the treatment of autoimmune, oncology and ophthalmic diseases. RemeGen has launched a Hong Kong IPO to raise net proceeds of HK$3,710.5 million ($479 million) at the mid-point of the IPO price range of HK$50.30-52.10 per share.Nineteen cornerstone investors have agreed to invest about $227.5 million in the IPO (44.99% of the offer shares at the mid-point of the IPO price range). Cornerstone investors which are not existing shareholders include Fidelity International, BlackRock, Matthews Funds, Hillhouse Capital, GIC, Cormorant Asset Management and Sino Biopharmaceutical (1177 HK). In our initiation note, we stated that the prospectus RemeGen’s core drug assets are favourable. Overall, a strong cornerstone investor lineup and our valuation analysis suggest that the IPO price range is attractive. 

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

<ul>
<li>Founder-led businesses are supposed to receive more appreciation among investors;</li>
<li>It would be intriguing to explore how Chinese founders and business owners pay themselves, as executive compensation is a significant part of corporate governance, a common weakness among most Chinese public companies;</li>
<li>We examine a pool of selected value-generative, founder-led, Chinese businesses across industries, and market caps to demonstrate the similarity and any dissimilarity.</li>
</ul>


Founder-led businesses are supposed to receive more appreciation among investors;
It would be intriguing to explore how Chinese founders and business owners pay themselves, as executive compensation is a significant part of corporate governance, a common weakness among most Chinese public companies;
We examine a pool of selected value-generative, founder-led, Chinese businesses across industries, and market caps to demonstrate the similarity and any dissimilarity.


Simcere Pharmaceutical Group / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/simcere-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:29186:1" rel="noopener">Simcere Pharmaceutical Group (2096 HK)</a> is engaged in the R&amp;D, production and commercialisation of pharmaceuticals and is primarily focused on generic pharmaceuticals.  At the proposed IPO price range of HK$12.10-13.70 per share, Simcere will have a market cap of HK$31,528.8-35,697.9 million ($4.1-4.6 billion). At the mid-point of the IPO price range, Simcere will raise net proceeds of HK$3,191.3 million ($412 million). </p></div><div id="ember2866">Seven cornerstone investors will subscribe for 43.81% of the offer shares at the mid-point of the IPO price range. The cornerstone investors are Hillhouse Capital, Jiangbei Investment Group, Shenzhen Capital Group, Lake Bleu Capital, OrbiMed, Sage Partners and Jericho Capital. </div><div id="ember2871"></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/simcere-pharmaceutical-ipo-initiation-a-rough-patch" target="_blank" rel="noopener">our initiation note</a>, we highlighted that for investors willing to look past the 2020 results, Simcere is putting in place the right measures to ensure that the weak 1H20 was an exception rather than the rule. Overall, we think that an attractive PEG valuation and solid cornerstone support makes Simcere tempting at the proposed pricing range. </p></div></div></div>

Simcere Pharmaceutical Group (2096 HK) is engaged in the R&amp;D, production and commercialisation of pharmaceuticals and is primarily focused on generic pharmaceuticals.  At the proposed IPO price range of HK$12.10-13.70 per share, Simcere will have a market cap of HK$31,528.8-35,697.9 million ($4.1-4.6 billion). At the mid-point of the IPO price range, Simcere will raise net proceeds of HK$3,191.3 million ($412 million). Seven cornerstone investors will subscribe for 43.81% of the offer shares at the mid-point of the IPO price range. The cornerstone investors are Hillhouse Capital, Jiangbei Investment Group, Shenzhen Capital Group, Lake Bleu Capital, OrbiMed, Sage Partners and Jericho Capital. In our initiation note, we highlighted that for investors willing to look past the 2020 results, Simcere is putting in place the right measures to ensure that the weak 1H20 was an exception rather than the rule. Overall, we think that an attractive PEG valuation and solid cornerstone support makes Simcere tempting at the proposed pricing range. 

Simcere Pharmaceutical IPO: Valuation Insights

Hong Kong

Sino Biopharmaceutical Limited, through its subsidiaries, researches, develops, produces, and sells biopharmaceutical products for the medical treatment of ophthalmia, as well as modernized Chinese medicine and chemical medicine for the treatment of hepatitis.

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Sino Biopharmaceutical (1177 HK)

A Different Angle - RemeGen Vs Akeso (Insights on Valuation)

In this article, by comparing RemeGen and Akeso's pipelines from different aspects to provide referable and helpful insights about the valuation...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.30)

This article summarized major industry viewpoints, companies news and capital market review in healthcare industry in China during the week of Oct.30.

Xinyao (Criss) Wang

RemeGen IPO: Valuation Insights

RemeGen has launched a Hong Kong IPO to raise net proceeds of HK$3,710.5 million ($479 million). Overall, a strong cornerstone lineup and our...

Arun George

How Chinese Founders Pay Themselves

Take a look at how Chinese founders and business owners pay themselves and gauge the soundness of corporate governance among founder-operated and...

Steven Chen

Simcere Pharmaceutical IPO: Valuation Insights

We think that an attractive PEG valuation and solid cornerstone support makes Simcere tempting at the proposed pricing range

Arun George

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