HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>WuXi XDC’s YoY revenue growth rate fell to double-digit while it was kept triple-digit growth rate in previous periods. How much revenue generated from backlog isn’t within WuXi XDC’s control. </li>
<li>The significance of healthy growth of the global ADC market is that the good story of ADC CXO is able to continue. So, WuXi XDC’s short-term performance growth is guaranteed.</li>
<li>The establishment of an independent biopharmaceutical supply chain based on US national security concerns is inevitable. So, WuXi XDC’s stock price performance is more influenced by geopolitical conflicts than fundamentals. </li>
</ul>


WuXi XDC’s YoY revenue growth rate fell to double-digit while it was kept triple-digit growth rate in previous periods. How much revenue generated from backlog isn’t within WuXi XDC’s control. 
The significance of healthy growth of the global ADC market is that the good story of ADC CXO is able to continue. So, WuXi XDC’s short-term performance growth is guaranteed.
The establishment of an independent biopharmaceutical supply chain based on US national security concerns is inevitable. So, WuXi XDC’s stock price performance is more influenced by geopolitical conflicts than fundamentals. 


WuXi XDC Cayman (2268.HK) 24H1- High Growth of ADC Market Ensures Investment Logic, but Risks Remain

Equity Capital Markets

<ul>
<li>Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.</li>
<li>Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.</li>
<li>Medtide's business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.</li>
</ul>


Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.
Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.
Medtide's business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.


Pre-IPO Medtide - The Industry, the Business and the Concerns

Livzon Pharmaceutical Group In / Equity Bottom-Up

<ul>
<li>With rising COVID-19 cases, a pandemic outbreak in late 2024 is likely. Investors should focus on related sectors and stocks again.</li>
<li>Due to BIOSECURE Act, US companies are leaving Chinese partners.If Trump is elected, his sanctions on China's supply chain may intensify. So, there should be “valuation discount” for China CXOs.</li>
<li>Livzon may have negative YoY revenue growth in 24H1, but full-year revenue may have positive low single-digit YoY growth. Due to good dividend/repurchase policy, Livzon deserves more patience from investors.</li>
</ul>


With rising COVID-19 cases, a pandemic outbreak in late 2024 is likely. Investors should focus on related sectors and stocks again.
Due to BIOSECURE Act, US companies are leaving Chinese partners.If Trump is elected, his sanctions on China's supply chain may intensify. So, there should be “valuation discount” for China CXOs.
Livzon may have negative YoY revenue growth in 24H1, but full-year revenue may have positive low single-digit YoY growth. Due to good dividend/repurchase policy, Livzon deserves more patience from investors.


China Healthcare Weekly (Aug.18)- COVID Is Here, BIOSECURE Act Update, Livzon Deserves More Patience

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/midea-group-co-ltd-a" target="_blank" data-smartkarma-citation="entities:16185:1" rel="noopener">Midea Group Co Ltd A (000333 CH)</a> has got approval to list on the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> and reports are that the listing could be up to US$3bn.</li>
<li>That issue size is around half of the maximum that the company can issue. But it would still need cornerstone investors and a nice discount on the H-shares.</li>
<li>The stock will still get included in some indices even with the scaled down size, and inclusion in Southbound Stock Connect is a given.</li>
</ul>



Midea Group Co Ltd A (000333 CH) has got approval to list on the HKEX (388 HK) and reports are that the listing could be up to US$3bn.
That issue size is around half of the maximum that the company can issue. But it would still need cornerstone investors and a nice discount on the H-shares.
The stock will still get included in some indices even with the scaled down size, and inclusion in Southbound Stock Connect is a given.


Midea Group (000333 CH): Index Implications at US$3bn Issue Size

<ul>
<li>Post market close on Friday, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 6 September.</li>
<li>With no constituent changes in March and 1 add/1 delete in June, there could be more changes in September with Health Care stocks among the potential inclusions.</li>
<li>Changes to the Hang Seng Industry Classification System (HSICS) will be implemented from the September rebalance and that will alter industry coverage.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 September.
With no constituent changes in March and 1 add/1 delete in June, there could be more changes in September with Health Care stocks among the potential inclusions.
Changes to the Hang Seng Industry Classification System (HSICS) will be implemented from the September rebalance and that will alter industry coverage.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for September

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)

WuXi XDC Cayman (2268.HK) 24H1- High Growth of ADC Market Ensures Investment Logic, but Risks Remain

Global ADC market growth ensures short-term performance stability,but WuXi XDC faces challenges due to factors beyond its control.Geopolitical...

Xinyao (Criss) Wang

Pre-IPO Medtide - The Industry, the Business and the Concerns

Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.18)- COVID Is Here, BIOSECURE Act Update, Livzon Deserves More Patience

COVID is coming again. So investors can focus on related stocks. US companies leaving Chinese partners due to BIOSECURE Act. Livzon is still worth...

Xinyao (Criss) Wang

Midea Group (000333 CH): Index Implications at US$3bn Issue Size

The CSRC and HKEX have both approved Midea Group's H-share listing. Reports indicate an issue size of up to US$3bn. Index inclusion gets tougher at...

Brian Freitas

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for September

Announcement on Friday post market close. Health Care industry still underweight. Index committee has a lot of discretion in stock selection. We...

Brian Freitas

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WuXi XDC Cayman (2268.HK) 24H1- High Growth of ADC Market Ensures Investment Logic, but Risks Remain

​Global ADC market growth ensures short-term performance stability,but WuXi XDC faces challenges due to factors beyond its control.Geopolitical...

Xinyao (Criss) Wang

Pre-IPO Medtide - The Industry, the Business and the Concerns

​Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Xinyao (Criss) Wang

China Healthcare Weekly (Aug.18)- COVID Is Here, BIOSECURE Act Update, Livzon Deserves More Patience

COVID is coming again. So investors can focus on related stocks. US companies leaving Chinese partners due to BIOSECURE Act. Livzon is still worth...

Xinyao (Criss) Wang

Midea Group (000333 CH): Index Implications at US$3bn Issue Size

The CSRC and HKEX have both approved Midea Group's H-share listing. Reports indicate an issue size of up to US$3bn. Index inclusion gets tougher at...

Brian Freitas

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for September

Announcement on Friday post market close. Health Care industry still underweight. Index committee has a lot of discretion in stock selection. We...

Brian Freitas

Global ADC market growth ensures short-term performance stability,but WuXi XDC faces challenges due to factors beyond its control.Geopolitical...

Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...