HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Sunshine Lake Pharma / Equity Capital Markets

<ul>
<li>Most revenue was contributed by Kewei, but kewei has been included in VBP.Together with increasing competition, the outlook is gloomy if Sunshine Lake Pharma continues to mainly rely on Kewei.</li>
<li>There’s a significant gap in Sunshine Lake Pharma's R&amp;D progress/clinical data compared to the products of peers.The pipeline has been “disconnected” from the level of domestic biotech in recent years</li>
<li>Sunshine Lake Pharma is inferior to other pharmaceutical companies in China.Even if CJ Pharma will be merged into Sunshine Lake Pharma, its market value should be lower than leading Biotech.</li>
</ul>


Most revenue was contributed by Kewei, but kewei has been included in VBP.Together with increasing competition, the outlook is gloomy if Sunshine Lake Pharma continues to mainly rely on Kewei.
There’s a significant gap in Sunshine Lake Pharma's R&amp;D progress/clinical data compared to the products of peers.The pipeline has been “disconnected” from the level of domestic biotech in recent years
Sunshine Lake Pharma is inferior to other pharmaceutical companies in China.Even if CJ Pharma will be merged into Sunshine Lake Pharma, its market value should be lower than leading Biotech.


Pre-IPO Sunshine Lake Pharma - “Outdated” Pipeline Is Difficult to Obtain Decent Valuation

Equity Bottom-Up

Yichang HEC Changjiang Pharma / Equity Bottom-Up

<ul>
<li>For the upcoming 11th national VBP, we think some core and big varieties could be included, involving companies such as Sunshine Lake Pharma, <a href="https://www.smartkarma.com/entities/huadong-medicine-co-ltd-a" target="_blank" data-smartkarma-citation="entities:18522:1" rel="noopener">Huadong Medicine</a>, <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group-co" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a>, etc.</li>
<li>Anjoy’s IPO is fairly priced. Reasonable valuation range is 10-15x P/E.However, unfavorable factors have led us to take a conservative attitude towards the upside potential of stock price after IPO.</li>
<li>For Sunshine Lake Pharma's privatization of HEC Pharma, Composite Document was despatched. However, if investors truly understand "the essence" of HEC Pharma, they will be calm/rational about this absorption merger.</li>
</ul>


For the upcoming 11th national VBP, we think some core and big varieties could be included, involving companies such as Sunshine Lake Pharma, Huadong Medicine, Hansoh Pharmaceutical (3692 HK), etc.
Anjoy’s IPO is fairly priced. Reasonable valuation range is 10-15x P/E.However, unfavorable factors have led us to take a conservative attitude towards the upside potential of stock price after IPO.
For Sunshine Lake Pharma's privatization of HEC Pharma, Composite Document was despatched. However, if investors truly understand "the essence" of HEC Pharma, they will be calm/rational about this absorption merger.


China Healthcare Weekly (Jul.6)- Anjoy’s IPO Debut, HEC CJ Pharma's Merger with Sunshine Lake Pharma

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Sunshine Lake Pharma (SLP HK)

Pre-IPO Sunshine Lake Pharma - “Outdated” Pipeline Is Difficult to Obtain Decent Valuation

Sunshine Lake Pharma is heavily relying on Kewei, leading to a gloomy outlook due to competition/VBP. Pipeline has been “disconnected” from the...

Xinyao (Criss) Wang

China Healthcare Weekly (Jul.6)- Anjoy’s IPO Debut, HEC CJ Pharma's Merger with Sunshine Lake Pharma

11th VBP may include big variety of Sunshine Lake Pharma/Huadong/Hansoh. Anjoy's IPO is fairly priced but shares upside is limited.HEC Pharma's...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre-IPO Sunshine Lake Pharma - “Outdated” Pipeline Is Difficult to Obtain Decent Valuation

​Sunshine Lake Pharma is heavily relying on Kewei, leading to a gloomy outlook due to competition/VBP. Pipeline has been “disconnected” from the...

Xinyao (Criss) Wang

China Healthcare Weekly (Jul.6)- Anjoy’s IPO Debut, HEC CJ Pharma's Merger with Sunshine Lake Pharma

11th VBP may include big variety of Sunshine Lake Pharma/Huadong/Hansoh. Anjoy's IPO is fairly priced but shares upside is limited.HEC Pharma's...

Xinyao (Criss) Wang

Sunshine Lake Pharma is heavily relying on Kewei, leading to a gloomy outlook due to competition/VBP. Pipeline has been “disconnected” from the...