HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>WuXi Bio announced the placing of existing shares by substantial shareholder. Obviously, the share price was in  “comfortable position” for the management, so they think it’s time to take action.</li>
<li>WuXi Bio faces the uncertainty of future high growth.GSK deal/AD drug orders cannot offset the loss of COVID-19 orders.We advised to invest when it’s in “sector resonance” with “difference in expectations”.</li>
<li>What we’re most worried about this year isn’t recession/depression but Taiwan, which is the last card the US hasn’t yet played. If situation’s really bad,something may happen in Taiwan Strait.</li>
</ul>


WuXi Bio announced the placing of existing shares by substantial shareholder. Obviously, the share price was in  “comfortable position” for the management, so they think it’s time to take action.
WuXi Bio faces the uncertainty of future high growth.GSK deal/AD drug orders cannot offset the loss of COVID-19 orders.We advised to invest when it’s in “sector resonance” with “difference in expectations”.
What we’re most worried about this year isn’t recession/depression but Taiwan, which is the last card the US hasn’t yet played. If situation’s really bad,something may happen in Taiwan Strait.


Wuxi Biologics Placement (2269 HK) - Things Are No Longer Easy When the Magic of CXO Wears Off

Medbanks Network Technology / Equity Capital Markets

<ul>
<li>Specialty Pharmacy Business is the main revenue contributor,but it’s hard for Medbanks to achieve breakeven or turn loss into profits by relying on this business due to its low margin.</li>
<li>Physician Research Assistance and Health Insurance Services have higher margin, but they have to face different challenges based on our analysis. They are hard to turn things around.</li>
<li>In fact, Medbanks does not control the core resources or establish high barriers in front of competition. Whether its ecological story would finally work still needs time to verify. </li>
</ul>


Specialty Pharmacy Business is the main revenue contributor,but it’s hard for Medbanks to achieve breakeven or turn loss into profits by relying on this business due to its low margin.
Physician Research Assistance and Health Insurance Services have higher margin, but they have to face different challenges based on our analysis. They are hard to turn things around.
In fact, Medbanks does not control the core resources or establish high barriers in front of competition. Whether its ecological story would finally work still needs time to verify. 


Pre-IPO Medbanks Network Technology - PHIP Updates: The Business Model Has yet to Be Verified

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of December 2nd.</li>
<li>We estimate the weekly inflows to be US$3,984.1 million, led by information technology, consumer discretionary, industrials sectors, and offset by utilities, energy.</li>
<li>We highlight flows for Wuliangye, CATL, Shenzhen Mindray, Longi Green.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of December 2nd.
We estimate the weekly inflows to be US$3,984.1 million, led by information technology, consumer discretionary, industrials sectors, and offset by utilities, energy.
We highlight flows for Wuliangye, CATL, Shenzhen Mindray, Longi Green.


Northbound Flows (Dec 2nd): Wuliangye, CATL, Mindray, Longi Green

Equity Bottom-Up

<ul>
<li>The renewal results of coronary stent centralized procurement reflected that the government's attitude towards the price reduction in VBP has changed, who tend to correct the excessively low price.</li>
<li>Investors’d better not to have such a misconception that they only attach importance to R&amp;D rather than commercialization. Only if sales ability is verified can enterprises have better valuation premium.</li>
<li>Investors are advised to find the targets that are in “sector resonance” but also has “difference in expectations”. Ecology of innovative drug has changed, such as <a href="https://www.smartkarma.com/entities/remegen-co-ltd-4d320f25-a993-45c0-80da-db6b4e1129f9" target="_blank" data-smartkarma-citation="entities:36086:1" rel="noopener">Remegen (688331 CH).</a>
</li>
</ul>


The renewal results of coronary stent centralized procurement reflected that the government's attitude towards the price reduction in VBP has changed, who tend to correct the excessively low price.
Investors’d better not to have such a misconception that they only attach importance to R&amp;D rather than commercialization. Only if sales ability is verified can enterprises have better valuation premium.
Investors are advised to find the targets that are in “sector resonance” but also has “difference in expectations”. Ecology of innovative drug has changed, such as Remegen (688331 CH).



China Healthcare Weekly (Dec.2)- VBP Correction, Sales Ability Overweigh R&D, Expectation Difference

<ul>
<li>WuXi AppTec announced its proposed disposal of A Shares again. Investors're worried about the signal behind - Performance growth has reached certain limit. There’s the possibility of a turning point.</li>
<li>Such proposed disposal (regardless of share price) could continue to weigh on the valuation performance of the whole CXO sector - There is still “bubble” in share price.</li>
<li>In fact, Li Ge (Founder of WuXi AppTec) knows CXO industry much better than anyone, when he decides to resolutely reduce his shareholding, it is very telling. </li>
</ul>


WuXi AppTec announced its proposed disposal of A Shares again. Investors're worried about the signal behind - Performance growth has reached certain limit. There’s the possibility of a turning point.
Such proposed disposal (regardless of share price) could continue to weigh on the valuation performance of the whole CXO sector - There is still “bubble” in share price.
In fact, Li Ge (Founder of WuXi AppTec) knows CXO industry much better than anyone, when he decides to resolutely reduce his shareholding, it is very telling. 


WuXi AppTec (603259.CH/2359.HK) - Interpretation of the Recent Proposed Disposal of A Shares

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 Biologics Placement (2269 HK) - Things Are No Longer Easy When the Magic of CXO Wears Off

Things are not easy when the peak of CXO has gone. WuXi Bio can be invested only when there's sector resonance with difference in expectations....

Xinyao (Criss) Wang

Pre-IPO Medbanks Network Technology - PHIP Updates: The Business Model Has yet to Be Verified

Medbanks can't turn loss into profit by relying on Specialty Pharmacy Business due to its low margin.Without core resource/high barrier, whether...

Xinyao (Criss) Wang

Northbound Flows (Dec 2nd): Wuliangye, CATL, Mindray, Longi Green

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Wuliangye, CATL, Mindray, Longi Green.

Ke Yan, CFA, FRM

China Healthcare Weekly (Dec.2)- VBP Correction, Sales Ability Overweigh R&D, Expectation Difference

VBP renewal of coronary stents shows the government will correct the underpricing;Only if sales ability is verified can biotech has better...

Xinyao (Criss) Wang

WuXi AppTec (603259.CH/2359.HK) - Interpretation of the Recent Proposed Disposal of A Shares

Investors're worried about the signal behind WuXi AppTec's proposed disposal - Performance growth has reached certain limit. When Li Ge decides to...

Xinyao (Criss) Wang

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