HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The main performance contributor in 2021 was CanSino’s COVID-19 vaccine.However, the high vaccination rates, new alternatives (e.g. oral COVID-19 pills) and concerns on capacity make the future sales highly uncertain.</li>
<li>The commercialization performance of MCV2 and MCV4 would largely determine when CanSino could truly shift to relying on conventional vaccine business rather than COVID-19 vaccine to contribute performance.</li>
<li>Objectively speaking, CanSino’s pipeline, R&amp;D capability and technology platforms do have advantages and investment value.</li>
</ul>


The main performance contributor in 2021 was CanSino’s COVID-19 vaccine.However, the high vaccination rates, new alternatives (e.g. oral COVID-19 pills) and concerns on capacity make the future sales highly uncertain.
The commercialization performance of MCV2 and MCV4 would largely determine when CanSino could truly shift to relying on conventional vaccine business rather than COVID-19 vaccine to contribute performance.
Objectively speaking, CanSino’s pipeline, R&amp;D capability and technology platforms do have advantages and investment value.


CanSino Biologics (6185.HK/688185.CH) - Still Have Investment Value

Equity Capital Markets

The global spread of COVID-19 has given the vaccine industry unprecedented attention. With the increasing prosperity of the industry, many vaccine companies are increasingly enthusiastic about going public. On Sep 12, 2021, <a href="https://www.smartkarma.com/entities/aim-vaccine-co-ltd" target="_blank" data-smartkarma-citation="entities:33778:1" rel="noopener">AIM Vaccine (AIM HK)</a> submitted its listing application to the HKEX and officially started its IPO process. AIM is a leading vaccine company that covers the full value chain from R&amp;D to manufacturing and to commercialization. This insight mainly analyzed AIM in terms of the industry characteristics, the key vaccine products, the vaccine pipeline and related concerns of the Company.

The global spread of COVID-19 has given the vaccine industry unprecedented attention. With the increasing prosperity of the industry, many vaccine companies are increasingly enthusiastic about going public. On Sep 12, 2021, AIM Vaccine (AIM HK) submitted its listing application to the HKEX and officially started its IPO process. AIM is a leading vaccine company that covers the full value chain from R&amp;D to manufacturing and to commercialization. This insight mainly analyzed AIM in terms of the industry characteristics, the key vaccine products, the vaccine pipeline and related concerns of the Company.

Pre-IPO AIM Vaccine - Insights on Key Products, Pipeline and Concerns

On August 30, 2021, <a href="https://www.smartkarma.com/entities/cansino-biologics-inc-cc0c90b7-e854-4ba3-929b-914be1bd0d89" target="_blank" data-smartkarma-citation="entities:32181:1" rel="noopener">CanSino Biologics Inc (688185 CH)</a> released it 2021/1H financial results. The revenue was RMB2.06 billion, up 51057.67% YoY, and the net profit was RMB937 million, which was the first time for CanSino to be profitable after successive years of losses. However, it seems that the market was not satisfied with the results. On August 31, the Company’s share price was down 3.34%. Although the share price was up 1.5% on September 1, it continued to fall by 4.94% on September 2 and 0.72% on September 3. It is also worth mentioning that since the beginning of Q3, CanSino’s share price has fallen by 52.56%, and the market value is also below RMB100 billion by the end of September 3. This insight mainly analyzed the concerns on key products and the outlook of the Company.

On August 30, 2021, CanSino Biologics Inc (688185 CH) released it 2021/1H financial results. The revenue was RMB2.06 billion, up 51057.67% YoY, and the net profit was RMB937 million, which was the first time for CanSino to be profitable after successive years of losses. However, it seems that the market was not satisfied with the results. On August 31, the Company’s share price was down 3.34%. Although the share price was up 1.5% on September 1, it continued to fall by 4.94% on September 2 and 0.72% on September 3. It is also worth mentioning that since the beginning of Q3, CanSino’s share price has fallen by 52.56%, and the market value is also below RMB100 billion by the end of September 3. This insight mainly analyzed the concerns on key products and the outlook of the Company.

CanSino Biologics (688185.CH/6185.HK) 2021/1H - Concerns on Key Products and the Outlook

Beijing Wantai Biological Phar / Equity Bottom-Up

By the end of July 13, 2021, the stock price of <a href="https://www.smartkarma.com/entities/beijing-wantai-biological-a" target="_blank" data-smartkarma-citation="entities:30129:1" rel="noopener">Beijing Wantai Biological-A (603392 CH) </a>was closed at RMB279.1/share, up 3090% compared with its IPO price (RMB8.75/share) in April, 2020. Last week, Wantai announced that its wholly-owned IVD subsidiary planned to invest RMB1.336 billion to build a new industrial base. After the completion of the project, it will have a reagent production capacity of 500 million persons per year and a inspection equipment production capacity of 9000 units/year. This insight mainly analyzed the outlook of Wantai’s IVD business and its core HPV vaccine business and the related concerns.

By the end of July 13, 2021, the stock price of Beijing Wantai Biological-A (603392 CH) was closed at RMB279.1/share, up 3090% compared with its IPO price (RMB8.75/share) in April, 2020. Last week, Wantai announced that its wholly-owned IVD subsidiary planned to invest RMB1.336 billion to build a new industrial base. After the completion of the project, it will have a reagent production capacity of 500 million persons per year and a inspection equipment production capacity of 9000 units/year. This insight mainly analyzed the outlook of Wantai’s IVD business and its core HPV vaccine business and the related concerns.

Beijing Wantai Biological (603392.CH) - How to Support Its High Valuation?

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>Last week, Biden’s administration surprised the whole pharmaceutical industry about the proposal to waive patent protections for coronavirus shots. However, our view is that the impact is likely to be limited.</li>
<li>The market size of COVID-19 vaccines in China is expected to reach RMB150 billion to RMB180 billion.</li>
<li>Recently, the National Health Care Security Administration, National Health Commission, NMPA and other related departments released documents about medium - and long-term development plan for the isotopes for medical purposes.</li>
</ul>Company news:News about the updated progress on new 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/jacobio-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:29696:1" rel="noopener">Jacobio Pharmaceuticals (1167 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> and <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK).</a> Market review:Last week, stock price for healthcare sector in A share decreased 6.14%, while CSI 300 decreased 2.49% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Last week, Biden’s administration surprised the whole pharmaceutical industry about the proposal to waive patent protections for coronavirus shots. However, our view is that the impact is likely to be limited.
The market size of COVID-19 vaccines in China is expected to reach RMB150 billion to RMB180 billion.
Recently, the National Health Care Security Administration, National Health Commission, NMPA and other related departments released documents about medium - and long-term development plan for the isotopes for medical purposes.
Company news:News about the updated progress on new drugs of BeiGene Ltd (6160 HK), Jacobio Pharmaceuticals (1167 HK), Everest Medicines (1952 HK) and Antengene (6996 HK). Market review:Last week, stock price for healthcare sector in A share decreased 6.14%, while CSI 300 decreased 2.49% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.  

China

Walvax Biotechnology Company Limited develops, manufactures and sells bio-pharmaceutical vaccination products.  The Company's products include haemophilus influenzae type b conjugate vaccine and meningococcal group A,C bivalent polysaccharide conjugate vaccine.

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Walvax Biotechnology Co A (300142 CH)

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