HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Shanghai Duoning Biotechnology / Equity Capital Markets

<ul>
<li>The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.</li>
<li>Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.</li>
<li>A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns. </li>
</ul>


The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.
Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.
A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns. 


Pre-IPO Shanghai Duoning Biotechnology - The Industry, the Business and the Concerns

Shanghai Tofflon Science A / Equity Capital Markets

<ul>
<li>We analyzed three main factors to drive high performance growth of Tofflon in recent years, but these factors have become untenable. The remaining opportunity mainly lies in import substitution.</li>
<li>Every explosive growth of Tofflon benefits from positive industry trend, whose periodicity is obvious. It’s not a good investment opportunity for long run,but a staged investment opportunity in short term.</li>
<li>Tofflon is in the transition from explosive growth to steady growth. The change in industry demand would suppress valuation system. Buy low and sell high,rather than hold for long time.</li>
</ul>


We analyzed three main factors to drive high performance growth of Tofflon in recent years, but these factors have become untenable. The remaining opportunity mainly lies in import substitution.
Every explosive growth of Tofflon benefits from positive industry trend, whose periodicity is obvious. It’s not a good investment opportunity for long run,but a staged investment opportunity in short term.
Tofflon is in the transition from explosive growth to steady growth. The change in industry demand would suppress valuation system. Buy low and sell high,rather than hold for long time.


Shanghai Tofflon Science Placement (300171.CH)-Industry Periodicity May Put Valuation Under Pressure

Thematic (Sector/Industry)

<ul>
<li>The driving force for the big performance growth of domestic culture medium companies mainly come from the logic of import substitution. We think there are investment opportunities in this industry.</li>
<li>Due to soaring costs of electricity prices, raw material prices and transportation costs, European pharmaceutical plants are facing difficulties in sustaining production. Chinese API enterprises could face expansion opportunities.</li>
<li>For industries that have been recognized by investors,the market begins to think in terms of long logic from a broader perspective rather than simply tracking the performance of individual companies.</li>
</ul>


The driving force for the big performance growth of domestic culture medium companies mainly come from the logic of import substitution. We think there are investment opportunities in this industry.
Due to soaring costs of electricity prices, raw material prices and transportation costs, European pharmaceutical plants are facing difficulties in sustaining production. Chinese API enterprises could face expansion opportunities.
For industries that have been recognized by investors,the market begins to think in terms of long logic from a broader perspective rather than simply tracking the performance of individual companies.


China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

<ul>
<li>Recently, the “14th Five-year Plan” for the construction of China's medical beauty standard system was released. We analyzed the impact on related companies.</li>
<li>As <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> was included in "unverified list", its share price tumbled. So, it’s extremely urgent for China to realize autonomous control of important upstream raw materials and equipment. </li>
<li>
<a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> should hold additional clinical trials to back its biologics application for Sintilimab (PD-1), indicating that the FDA’s attitude has changed.</li>
</ul>


Recently, the “14th Five-year Plan” for the construction of China's medical beauty standard system was released. We analyzed the impact on related companies.
As Wuxi Biologics (2269 HK) was included in "unverified list", its share price tumbled. So, it’s extremely urgent for China to realize autonomous control of important upstream raw materials and equipment. 

Innovent Biologics Inc (1801 HK) should hold additional clinical trials to back its biologics application for Sintilimab (PD-1), indicating that the FDA’s attitude has changed.


China Healthcare Weekly (Feb.11)- “14th Five-Year Plan” For Medical Beauty, Wuxi Biologics, Innovent

Industry viewpoints:<ul>
<li>Every stock market pullback is a good time to reorganize the logic and to think about what the trends are and what the constant demand is.</li>
<li>The volume-based purchase (VBP) of insulin will begin soon.</li>
<li>Due to the slow international logistics and product export restrictions during the COVID-19, the upstream pharmaceutical equipment, which was previously slow in import substitution, is expected to add the domestic industrial chain and quickly achieve the import substitution. </li>
</ul>Company news: News about the updated progress on drugs of <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a>, <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a>, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> and <a href="https://www.smartkarma.com/entities/cstone-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:27882:1" rel="noopener">CStone Pharmaceuticals (2616 HK)</a>. Market review:Last week, stock price for healthcare sector in A share decreased 4.32%, while CSI 300 decreased 5.46% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Every stock market pullback is a good time to reorganize the logic and to think about what the trends are and what the constant demand is.
The volume-based purchase (VBP) of insulin will begin soon.
Due to the slow international logistics and product export restrictions during the COVID-19, the upstream pharmaceutical equipment, which was previously slow in import substitution, is expected to add the domestic industrial chain and quickly achieve the import substitution. 
Company news: News about the updated progress on drugs of BeiGene Ltd (6160 HK), Everest Medicines (1952 HK), Innovent Biologics Inc (1801 HK) and CStone Pharmaceuticals (2616 HK). Market review:Last week, stock price for healthcare sector in A share decreased 4.32%, while CSI 300 decreased 5.46% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China

Truking Technology Limited develops, designs, manufactures, sells and provides services for aqueous pharmaceutical equipment. The Company offers ampoules linkage lines, vial linkage lines, oral liquid linkage lines, and infusion linkage lines, and other related products.

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Truking Technology Ltd A (300358 CH)

Pre-IPO Shanghai Duoning Biotechnology - The Industry, the Business and the Concerns

Upstream cost control is major driving force for the localization of pharmaceutical supply chain. So, Duoning has big potential. A slow-down...

Xinyao (Criss) Wang

Shanghai Tofflon Science Placement (300171.CH)-Industry Periodicity May Put Valuation Under Pressure

Tofflon is in the transition from explosive growth to steady growth. The periodicity of pharmaceutical equipment industry is obvious. The change in...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

Culture medium will have a rapid growth period. Due to high costs, EU Pharma face difficulty in sustaining production.Mr Market begins to think...

Xinyao (Criss) Wang

China Healthcare Weekly (Feb.11)- “14th Five-Year Plan” For Medical Beauty, Wuxi Biologics, Innovent

We analyzed the “14th Five-year Plan” for medical beauty, the impact of WuXi Bio after being included in "unverified list" and the prospects of...

Xinyao (Criss) Wang

China Healthcare Weekly (July.30)

This article mainly analyzed the logic and trends when stock market pullback, volume-based purchase of insulin in China, import substitution of...

Xinyao (Criss) Wang

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