Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

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<p>Antengene Corporation, which has filed for an HKEX listing, is a pre-revenue pharmaceutical company focused a combinatory (drug combinations) to treat cancer. The company's pipeline primarily features late-stage, in-licensed products (one approved in the US) supplemented by several internally-developed, pre-clinical compounds. The management team comes from <a href="https://www.smartkarma.com/entities/celgene-corp" target="_blank" data-smartkarma-citation="entities:7410:1" rel="noopener">Celgene Corp (CELG US)</a> and other MNCs and has experience developing oncology products. The venture investors are credible; and the patent estate has a long life.</p>
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<div>
<p>This Insight provides an overview of the business, including some initial thoughts on valuation (US$1-1.5 billion), and a list of questions for management. We will provide an update in a future Insight.</p>
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Antengene Corporation, which has filed for an HKEX listing, is a pre-revenue pharmaceutical company focused a combinatory (drug combinations) to treat cancer. The company's pipeline primarily features late-stage, in-licensed products (one approved in the US) supplemented by several internally-developed, pre-clinical compounds. The management team comes from Celgene Corp (CELG US) and other MNCs and has experience developing oncology products. The venture investors are credible; and the patent estate has a long life.


This Insight provides an overview of the business, including some initial thoughts on valuation (US$1-1.5 billion), and a list of questions for management. We will provide an update in a future Insight.


HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Hangzhou Tigermed Consulting C / Equity Bottom-Up

<p style="text-align: justify;"><a target="_blank"></a><a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-h" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK)</a> released the third quarter report of 2020. In the first three quarters of 2020, Q1-Q3 accumulated revenue reached RMB2.33 billion, with a YoY growth rate of 13.27%. Net income attributed to shareholders in the first three quarters reached RMB1.318 billion, up 149.57% YoY. Net income after deducting non-recurring gains and losses in Q1-Q3 was RMB498 million, up 13.57% YoY. The company's Q3 single quarter revenue reached RMB848 million, up 22.31% YoY. Net income attributed to shareholders in Q3 was RMB319 million, up 81.37% YoY. Net income after deducting non-recurring gains and losses in Q3 reached RMB195 million, up 29.35% YoY. Tigermed has gradually recovered from the epidemic with strong performance in Q3. </p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/169/276/original/image_94552562551604465156309.png?1604465157" class="editor-image img-responsive" data-smartkarma-image-id="169276"></figure>
<p style="text-align: justify;"><em>Source: WIND</em></p>

Hangzhou Tigermed Consulting (H) (3347 HK) released the third quarter report of 2020. In the first three quarters of 2020, Q1-Q3 accumulated revenue reached RMB2.33 billion, with a YoY growth rate of 13.27%. Net income attributed to shareholders in the first three quarters reached RMB1.318 billion, up 149.57% YoY. Net income after deducting non-recurring gains and losses in Q1-Q3 was RMB498 million, up 13.57% YoY. The company's Q3 single quarter revenue reached RMB848 million, up 22.31% YoY. Net income attributed to shareholders in Q3 was RMB319 million, up 81.37% YoY. Net income after deducting non-recurring gains and losses in Q3 reached RMB195 million, up 29.35% YoY. Tigermed has gradually recovered from the epidemic with strong performance in Q3. 

Source: WIND

Tigermed (300347.CN/03347.HK) - Q3 Performance Recovered with Optimistic Future Development

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.

<p><a href="https://www.smartkarma.com/entities/antengene-corporation-limited" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (ANGENE HK)</a> is a biopharmaceutical company with a focus on discovering, developing and commercialising global first-in-class, only-in-class and/or best-in-class therapies. Antengene is seeking to raise $300 million through a Hong Kong IPO. Antengene is backed by several blue-chip investors including Celgene, <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>, <a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-h" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK)</a>, Fidelity, Blackrock, GIC, Hillhouse, Boyu Capital, FountainVest Partners and Qiming Venture Partners. The Series C round in July 2020 raised $97 million at a post-money valuation of $726 million. </p><div class="content-highlight"><p>Antegene was founded by Jay Mei who has involved in clinical development of multiple blockbuster drugs, including <em>REVLIMID</em>, a global best-selling oncology therapy. Leveraging the management team’s expertise, Antegene focuses on the haematology and oncology therapeutic areas. Overall, we believe that Antegene’s clinical assets are attractive. </p></div>

Antengene (ANGENE HK) is a biopharmaceutical company with a focus on discovering, developing and commercialising global first-in-class, only-in-class and/or best-in-class therapies. Antengene is seeking to raise $300 million through a Hong Kong IPO. Antengene is backed by several blue-chip investors including Celgene, WuXi AppTec Co. Ltd. (2359 HK), Hangzhou Tigermed Consulting (H) (3347 HK), Fidelity, Blackrock, GIC, Hillhouse, Boyu Capital, FountainVest Partners and Qiming Venture Partners. The Series C round in July 2020 raised $97 million at a post-money valuation of $726 million. Antegene was founded by Jay Mei who has involved in clinical development of multiple blockbuster drugs, including REVLIMID, a global best-selling oncology therapy. Leveraging the management team’s expertise, Antegene focuses on the haematology and oncology therapeutic areas. Overall, we believe that Antegene’s clinical assets are attractive. 

Antengene IPO Initiation: Hunting for a Cure

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Quantitative Analysis

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<p>The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...</p>
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<ul style="list-style-type: disc;">
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. </li>
</ul>
<p>On average, </p>
<p>The first sector is <strong>Consumer</strong>, where H/A spreads widened on average 2.7% for the week, more than cancelling out the average 1.7% spread narrowing last week. With the exception of <a href="https://www.smartkarma.com/entities/hisense-home-appliances-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20107:1" rel="noopener">Hisense Home Appliances Group Co., Ltd. H (921 HK)</a>, this happened as the H-shares rose strongly and the A-Shares rose even more strongly.  </p>
<p>Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were significant net sellers during the week in both <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a> and <a href="https://www.smartkarma.com/entities/hisense-home-appliances-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20107:1" rel="noopener">Hisense Home Appliances Group Co., Ltd. H (921 HK)</a> where the net selling activity amounted to 15.5% and 22% of volume respectively. </p>
<p>Hisense remains at the overbought end of the 52-week range. <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a> and <a href="https://www.smartkarma.com/entities/guangzhou-automobile-group-co-ltd" target="_blank" data-smartkarma-citation="entities:11082:1" rel="noopener">Guangzhou Automobile Group (2238 HK)</a> are now at 52-week wides. </p>
<div class="content-highlight">
<p>Last week's recommendation was to take off Hisense and the H-share fell 7.3% while the spread widened 0.7%. It is still probably worth unwinding. At this point, Great Wall and Guangzhou are worth a buy on a spread basis.</p>
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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/167/062/original/Screenshot%202020-10-24%20at%202.45.56%20PM.png?1603521970" class="editor-image img-responsive" data-smartkarma-image-id="167062"></figure>
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<p>For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.</p>
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The H-Share/A-Share monitor is published every weekend for the data ending the last trading day of the previous week. It includes all H-Share/A-Share pairs where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...



H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the average sector spread and the individual spreads within each sector over the last three years. 

On average, 
The first sector is Consumer, where H/A spreads widened on average 2.7% for the week, more than cancelling out the average 1.7% spread narrowing last week. With the exception of Hisense Home Appliances Group Co., Ltd. H (921 HK), this happened as the H-shares rose strongly and the A-Shares rose even more strongly.  
Southbound investors through the Shenzhen-HK and Shanghai-HK Connect were significant net sellers during the week in both Tsingtao Brewery Co Ltd H (168 HK) and Hisense Home Appliances Group Co., Ltd. H (921 HK) where the net selling activity amounted to 15.5% and 22% of volume respectively. 
Hisense remains at the overbought end of the 52-week range. Great Wall Motor (2333 HK) and Guangzhou Automobile Group (2238 HK) are now at 52-week wides. 

Last week's recommendation was to take off Hisense and the H-share fell 7.3% while the spread widened 0.7%. It is still probably worth unwinding. At this point, Great Wall and Guangzhou are worth a buy on a spread basis.





For Energy, Financials &amp; Real Estate, Health Care, Tech, Industrials, Materials, and Utilities, please read on.


Quiddity Weekly H/​A: Share Spread Monitor 23 Oct 2020

<div><p><a href="https://www.smartkarma.com/entities/jw-therapeutics" target="_blank" data-smartkarma-citation="entities:29679:1" rel="noopener">JW Therapeutics (2126 HK)</a> is a leading clinical and pre-clinical stage cell therapy company in China. It was founded in 2016 by Juno, a <a href="https://www.smartkarma.com/entities/bristol-myers-squibb-co" target="_blank" data-smartkarma-citation="entities:1133:1" rel="noopener">Bristol Myers Squibb Co (BMY US)</a> company, and <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>. JW has launched a Hong Kong IPO to raise net proceeds of HK$2,017.6 million ($260 million) at the mid-point of the IPO price range of HK$20.00-23.80 per share.</p></div><div><p>Ten cornerstone investors have agreed to invest about $150 million in the IPO (54.33% of the offer shares at the mid-point of the IPO price range). Cornerstone investors include Rock Springs Capital, Oaktree Capital, Platinum Investment Management, Veritas Asset Management, RWC, Hillhouse Capital, Taiping Assets Management, AVICT Global, Loyal Valley Capitaland and Temasek. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jw-therapeutics-ipo-initiation-potent-medicine" target="_blank" rel="noopener">our initiation note</a>, we stated that JW’s core drug candidate’s competitive advantage in the CAR-T market in China is supported by its potential best-in-class safety profile with competitive efficacy, physicians’ familiarity due to a large number of clinical sites in China and manufacturing quality. Overall, a strong cornerstone investor lineup and our valuation analysis suggest that the IPO price range is attractive. </p></div></div></div>

JW Therapeutics (2126 HK) is a leading clinical and pre-clinical stage cell therapy company in China. It was founded in 2016 by Juno, a Bristol Myers Squibb Co (BMY US) company, and WuXi AppTec Co. Ltd. (2359 HK). JW has launched a Hong Kong IPO to raise net proceeds of HK$2,017.6 million ($260 million) at the mid-point of the IPO price range of HK$20.00-23.80 per share.Ten cornerstone investors have agreed to invest about $150 million in the IPO (54.33% of the offer shares at the mid-point of the IPO price range). Cornerstone investors include Rock Springs Capital, Oaktree Capital, Platinum Investment Management, Veritas Asset Management, RWC, Hillhouse Capital, Taiping Assets Management, AVICT Global, Loyal Valley Capitaland and Temasek. In our initiation note, we stated that JW’s core drug candidate’s competitive advantage in the CAR-T market in China is supported by its potential best-in-class safety profile with competitive efficacy, physicians’ familiarity due to a large number of clinical sites in China and manufacturing quality. Overall, a strong cornerstone investor lineup and our valuation analysis suggest that the IPO price range is attractive. 

China

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (603259 CH)

Antengene: Gunning To Move Up in Line

This Insight provides an in-depth review of pre-revenue biotechnology Antegene that plans to list on the HKEX. We discuss the pipeline, market...

Kemp Dolliver, CFA

Tigermed (300347.CN/03347.HK) - Q3 Performance Recovered with Optimistic Future Development

This article analyzed Tigermed's business, growth potential, global layout, equity investment and also made forecast and rating for this company.

Xinyao (Criss) Wang

Antengene IPO Initiation: Hunting for a Cure

Leveraging the management team’s expertise, Antegene focuses on the haematology and oncology therapeutic areas. Overall, we believe that Antegene’s...

Arun George

JW Therapeutics IPO: Valuation Insights

The core drug candidate’s competitive advantage in the China CAR-T market, a good cornerstone investor lineup and our valuation analysis suggest...

Arun George

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52-week Range

Market Cap (USDm)

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Antengene: Gunning To Move Up in Line

This Insight provides an in-depth review of pre-revenue biotechnology Antegene that plans to list on the HKEX. We discuss the pipeline, market...

Kemp Dolliver, CFA

Tigermed (300347.CN/03347.HK) - Q3 Performance Recovered with Optimistic Future Development

This article analyzed Tigermed's business, growth potential, global layout, equity investment and also made forecast and rating for this company.

Xinyao (Criss) Wang

Antengene IPO Initiation: Hunting for a Cure

Leveraging the management team’s expertise, Antegene focuses on the haematology and oncology therapeutic areas. Overall, we believe that Antegene’s...

Arun George

Quiddity Weekly H/​A: Share Spread Monitor 23 Oct 2020

Quiddity H/A Spread Monitor for the week ending 23 October 2020. Spreads widened in Consumer, narrowed in every other sector. Southbound were...

Travis Lundy

JW Therapeutics IPO: Valuation Insights

The core drug candidate’s competitive advantage in the China CAR-T market, a good cornerstone investor lineup and our valuation analysis suggest...

Arun George

Quiddity Weekly H/A: Share Spread Monitor 23 Oct 2020