Global Healthcare Analyst

Tina Banerjee

Thematic (Sector/Industry)

<ul>
<li>Innovent Biologics enters global licensing and collaboration agreement with Pfizer for the R&amp;D of 12 promising breakthrough early-stage and de novo cancer medicines. Total value of the deal is $10.5B.</li>
<li>Olympus has decided to acquire Israel-based medical devices manufacturer BioProtect for $270M. GC Biopharma announced that Eli Lilly is acquiring entire stake of its U.S. affiliate Curevo Vaccine for $1.5B.</li>
<li>Daewoong Pharmaceutical received approval for its type 2 diabetes drug Enblo in Mexico. Dong-A ST announced that MetaVia’s obesity drug candidate DA-1726 demonstrated safety and tolerability in Phase 1 trial.</li>
</ul>


Innovent Biologics enters global licensing and collaboration agreement with Pfizer for the R&amp;D of 12 promising breakthrough early-stage and de novo cancer medicines. Total value of the deal is $10.5B.
Olympus has decided to acquire Israel-based medical devices manufacturer BioProtect for $270M. GC Biopharma announced that Eli Lilly is acquiring entire stake of its U.S. affiliate Curevo Vaccine for $1.5B.
Daewoong Pharmaceutical received approval for its type 2 diabetes drug Enblo in Mexico. Dong-A ST announced that MetaVia’s obesity drug candidate DA-1726 demonstrated safety and tolerability in Phase 1 trial.


APAC Healthcare Weekly (May 31) – Innovent Biologics, Junshi Bio, Henlius Bio, Olympus, GC Bio

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Hangzhou Diagens Biotechnology / Equity Capital Markets

<ul>
<li>The willingness of hospitals/patients to purchase medical AI products/services is still not strong enough. The real turning point for the commercialization of medical AI hasn’t arrived yet.</li>
<li>The small revenue scale reflects that Diagens’ products have not received widespread recognition from the medical system. Market education cost would be high, leading to increasing selling and distribution expenses</li>
<li>Valuation should be higher than <a href="https://www.smartkarma.com/entities/basecare-medical-device-corporation-limited" target="_blank" data-smartkarma-citation="entities:31086:1" rel="noopener">Basecare (2170 HK)</a> who just focuses on testing kits in assisted reproduction, but should be lower than <a href="https://www.smartkarma.com/entities/xunfei-healthcare-technology" target="_blank" data-smartkarma-citation="entities:40836:1" rel="noopener">Xunfei Healthcare</a>, who has better commercialization performance/channels advantage.</li>
</ul>


The willingness of hospitals/patients to purchase medical AI products/services is still not strong enough. The real turning point for the commercialization of medical AI hasn’t arrived yet.
The small revenue scale reflects that Diagens’ products have not received widespread recognition from the medical system. Market education cost would be high, leading to increasing selling and distribution expenses
Valuation should be higher than Basecare (2170 HK) who just focuses on testing kits in assisted reproduction, but should be lower than Xunfei Healthcare, who has better commercialization performance/channels advantage.


Pre-IPO Hangzhou Diagens Biotechnology - The Turning Point of Medical Imaging AI Has Not Arrived

Equity Bottom-Up

Suzhou Basecare Medical / Equity Bottom-Up

<ul>
<li>Basecare has its strength in reproductive genetics medical device industry. Its performance improved based on 22H1 results. If positive momentum continues, Basecare is able to achieve breakeven in foreseeable future. </li>
<li>However, the actual market penetration of assisted reproduction in China is much lower than expected. This means the growth ceiling of Basecase is uncertain, indicating potential problems in long-term logic.</li>
<li>Basecase’s market value has fallen below its cash balance. There’s a mismatch between the intrinsic value and market price, so we expect that valuation repair could occur in the future. </li>
</ul>


Basecare has its strength in reproductive genetics medical device industry. Its performance improved based on 22H1 results. If positive momentum continues, Basecare is able to achieve breakeven in foreseeable future. 
However, the actual market penetration of assisted reproduction in China is much lower than expected. This means the growth ceiling of Basecase is uncertain, indicating potential problems in long-term logic.
Basecase’s market value has fallen below its cash balance. There’s a mismatch between the intrinsic value and market price, so we expect that valuation repair could occur in the future. 


Basecare Medical Device (2170.HK)- There's Valuation Repair Expectation, but Long-Logic Is Untenable

Asia Pac ECM and Index Rebal, DZT Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

<p>We have discussed in our previous note that Jinxin Fertility will be a beneficiary for the China's promotional policy for the third child. With the recent share price weakness and development on the policy front, we provide updates on the company and continue to believe that it is a name to hold for more favorable policy tailwinds to come. </p>

We have discussed in our previous note that Jinxin Fertility will be a beneficiary for the China's promotional policy for the third child. With the recent share price weakness and development on the policy front, we provide updates on the company and continue to believe that it is a name to hold for more favorable policy tailwinds to come. 

Jinxin Fertility: Signs of Policy Tailwind and Valuation Dislocation

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.

Zylox-Tonbridge Medical Technology / Equity Capital Markets

Zylox-Tonbridge Medical Technology (2190 HK)

<div>
<p><a href="https://www.smartkarma.com/entities/zylox-tonbridge-medical-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32974:1" rel="noopener">Zylox-Tonbridge Medical Technology (2190 HK)</a> is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). </p>
<p>Zylox-Tonbridge will commence trading on Monday, 5 July. Zylox-Tonbridge priced its IPO at HK$42.70 and <a href="https://inews.hket.com/article/2996563/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E6%AD%B8%E5%89%B5%E9%80%9A%E6%A9%8B2190%E6%9A%97%E7%9B%A4%E6%94%B6%E5%8D%8730-%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA6575%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">closed 31% up at HK$55.85</a> in the Futu securities grey market. </p>
</div><div><p>In <a href="https://www.smartkarma.com/insights/zylox-tonbridge-ipo-living-on" target="_blank" data-smartkarma-citation="insights:53469" rel="noopener">Zylox-Tonbridge IPO: Living On</a>, we opined that Zylox-Tonbridge is on the cusp of delivering on a sizeable addressable market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. We concluded that Zylox-Tonbridge’s product portfolio is attractive. In <a href="https://www.smartkarma.com/insights/zylox-tonbridge-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:53517" rel="noopener">Zylox-Tonbridge IPO: Valuation Insights</a>, we noted that the IPO price range is attractive.</p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of HK$48.89 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that we would take profits at the grey market price.</p></div></div></div>


Zylox-Tonbridge Medical Technology (2190 HK) is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). 
Zylox-Tonbridge will commence trading on Monday, 5 July. Zylox-Tonbridge priced its IPO at HK$42.70 and closed 31% up at HK$55.85 in the Futu securities grey market. 
In Zylox-Tonbridge IPO: Living On, we opined that Zylox-Tonbridge is on the cusp of delivering on a sizeable addressable market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. We concluded that Zylox-Tonbridge’s product portfolio is attractive. In Zylox-Tonbridge IPO: Valuation Insights, we noted that the IPO price range is attractive.Updating for the final IPO net raise, our base-case DCF derived price target of HK$48.89 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that we would take profits at the grey market price.

China

Suzhou Basecare Medical is a China-based company specializing in assisted reproductive genetic testing solutions. It researches, develops, manufactures, and sells genetic testing kits, equipment, instruments, and consumables, with key products including preimplantation genetic testing for aneuploidy (PGT-A) kits. The company was founded in 2010 and is headquartered in Suzhou, Jiangsu, China.

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Suzhou Basecare Medical (2170 HK)

APAC Healthcare Weekly (May 31) – Innovent Biologics, Junshi Bio, Henlius Bio, Olympus, GC Bio

Innovent stuck $10.5B outlicensing deal with Pfizer. Olympus will acquire BioProtect. Eli Lilly is acquiring GC Bio’s US affiliate. Dong-A’s...

Tina Banerjee

Pre-IPO Hangzhou Diagens Biotechnology - The Turning Point of Medical Imaging AI Has Not Arrived

Hospital/patients are not yet fully embracing medical AI, hindering commercialization.Diagens faces challenges in gaining recognition considering...

Xinyao (Criss) Wang

Basecare Medical Device (2170.HK)- There's Valuation Repair Expectation, but Long-Logic Is Untenable

There’s a mismatch between the intrinsic value and market price of Basecare. But the actual market penetration could be much lower, leading to...

Xinyao (Criss) Wang

Jinxin Fertility: Signs of Policy Tailwind and Valuation Dislocation

We think there's a dislocation of Jinxin Fertilities' share following the sell-off of Chinese stocks due to the policy targeting education...

Ke Yan, CFA, FRM

Zylox-Tonbridge IPO: Trading Debut

Zylox-Tonbridge priced its IPO at HK$42.70 and closed 31% up at HK$55.85 in the Futu securities grey market. Our DCF sensitivity analysis shows...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

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APAC Healthcare Weekly (May 31) – Innovent Biologics, Junshi Bio, Henlius Bio, Olympus, GC Bio

Innovent stuck $10.5B outlicensing deal with Pfizer. Olympus will acquire BioProtect. Eli Lilly is acquiring GC Bio’s US affiliate. Dong-A’s...

Tina Banerjee

Pre-IPO Hangzhou Diagens Biotechnology - The Turning Point of Medical Imaging AI Has Not Arrived

​Hospital/patients are not yet fully embracing medical AI, hindering commercialization.Diagens faces challenges in gaining recognition considering...

Xinyao (Criss) Wang

Basecare Medical Device (2170.HK)- There's Valuation Repair Expectation, but Long-Logic Is Untenable

There’s a mismatch between the intrinsic value and market price of Basecare. But the actual market penetration could be much lower, leading to...

Xinyao (Criss) Wang

Jinxin Fertility: Signs of Policy Tailwind and Valuation Dislocation

We think there's a dislocation of Jinxin Fertilities' share following the sell-off of Chinese stocks due to the policy targeting education...

Ke Yan, CFA, FRM

Zylox-Tonbridge IPO: Trading Debut

Zylox-Tonbridge priced its IPO at HK$42.70 and closed 31% up at HK$55.85 in the Futu securities grey market. Our DCF sensitivity analysis shows...

Arun George

Hospital/patients are not yet fully embracing medical AI, hindering commercialization.Diagens faces challenges in gaining recognition considering...