HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Porton Pharma Solutions / Equity Bottom-Up

<ul>
<li>Porton’s performance declined significantly in 23H1 compared with high base last year, because most of Pfizer’s COVID-19 big orders have been completed. Porton's performance in 2023 would be under pressure.</li>
<li>Porton isn’t a first-tier CXO and lags behind industry leaders in terms of new businesses (CGT/ADC CXO). Valuation of entire CXO sector and Porton hasn’t yet reached an inflection point.</li>
<li>Market's expectation for CXO would decrease and then bottom out in 2023H2. Whether CXO's performance would rebound in 2024 still needs to wait for the turnaround in macro environment.</li>
</ul>


Porton’s performance declined significantly in 23H1 compared with high base last year, because most of Pfizer’s COVID-19 big orders have been completed. Porton's performance in 2023 would be under pressure.
Porton isn’t a first-tier CXO and lags behind industry leaders in terms of new businesses (CGT/ADC CXO). Valuation of entire CXO sector and Porton hasn’t yet reached an inflection point.
Market's expectation for CXO would decrease and then bottom out in 2023H2. Whether CXO's performance would rebound in 2024 still needs to wait for the turnaround in macro environment.


Porton Pharma Solutions (300363.CH) 23H1 - Performance Pressure Would Remain in 2023

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

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.

Equity Capital Markets

WuXi XDC Cayman  / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-xdc-cayman-inc" target="_blank" data-smartkarma-citation="entities:39917:1" rel="noopener">WuXi XDC Cayman Inc (1877628D HK)</a> is looking to raise &gt;US$100m in its upcoming Hong Kong IPO. The bookrunners on the deal are Morgan Stanley, Goldman Sachs, and JP Morgan.</li>
<li>WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.</li>
<li>As per Frost &amp; Sullivan (F&amp;S), the firm was the second largest CRDMO for ADCs and other bioconjugates globally in terms of FY22 sales.</li>
</ul>



WuXi XDC Cayman Inc (1877628D HK) is looking to raise &gt;US$100m in its upcoming Hong Kong IPO. The bookrunners on the deal are Morgan Stanley, Goldman Sachs, and JP Morgan.
WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
As per Frost &amp; Sullivan (F&amp;S), the firm was the second largest CRDMO for ADCs and other bioconjugates globally in terms of FY22 sales.


<ul>
<li>Although WuXi XDC has financing needs, we’re more inclined to view this spin-off listing as another capital operation of WuXi AppTec/WuXi Bio, who may not want to take risks alone.</li>
<li>Global ADC/broader bioconjugate market is at a nascent stage of development, with high R&amp;D risks/commercialization uncertainties. We cannot guarantee whether WuXi XDC will maintain its industry-leading position in the future.</li>
<li>Although high growth can bring good stories, we're not sure how much actual market space WuXi XDC will have in the future,which is the key to determining the valuation ceiling.</li>
</ul>


Although WuXi XDC has financing needs, we’re more inclined to view this spin-off listing as another capital operation of WuXi AppTec/WuXi Bio, who may not want to take risks alone.
Global ADC/broader bioconjugate market is at a nascent stage of development, with high R&amp;D risks/commercialization uncertainties. We cannot guarantee whether WuXi XDC will maintain its industry-leading position in the future.
Although high growth can bring good stories, we're not sure how much actual market space WuXi XDC will have in the future,which is the key to determining the valuation ceiling.


Pre-IPO WuXi XDC - The Beautiful Story and the Truth Behind

Thematic (Sector/Industry)

<ul>
<li>Investors appear to have lost faith in China healthcare following a plunge in CXO shares.But seeing the decline in CXO orders as indicator of industry's prosperity is a lagging view.</li>
<li>The logic of CXO is tied to biotech on the one hand and to overseas relationships on the other. But Biotech remains the cornerstone of the overall logical chain. </li>
<li>According to the primary market situation, we’re not optimistic about CXO's domestic business to achieve a significant recovery next year, but the overseas recovery/financing situation may improve a bit faster.</li>
</ul>


Investors appear to have lost faith in China healthcare following a plunge in CXO shares.But seeing the decline in CXO orders as indicator of industry's prosperity is a lagging view.
The logic of CXO is tied to biotech on the one hand and to overseas relationships on the other. But Biotech remains the cornerstone of the overall logical chain. 
According to the primary market situation, we’re not optimistic about CXO's domestic business to achieve a significant recovery next year, but the overseas recovery/financing situation may improve a bit faster.


China CXO Has Reached a Crossroads - Time to Reconsider

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>We expect WuXi Bio’s revenue to grow by 11% YoY in 1H23E and attributable adjusted net income to stay flat in 1H23E, mainly due to the relatively high base in 1H22 and the reduced revenue from COVID-related projects.</li><li>In 5M23, the Company added 25 new projects into its pipeline, including 8 external projects under its “Win-the-Molecule” strategy. Despite the sizable capacity additions in 2022 (i.e., MFG7 in Ireland and MFG8 in Shijiazhuang, each with a capacity of 48k L), we forecast WuXi Bio to maintain a satisfying margin level thanks to effective cost controls through the continuous execution of WBS (WuXi Biologics Business System) which targets to improve gross profit margin (GMP) by 300bps in 2023.</li><li>WuXi Bio management maintained its full-year guidance unchanged with revenue growth of 30% YoY and attributable adjusted net income of 26% YoY for 2023E. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

We expect WuXi Bio’s revenue to grow by 11% YoY in 1H23E and attributable adjusted net income to stay flat in 1H23E, mainly due to the relatively high base in 1H22 and the reduced revenue from COVID-related projects.In 5M23, the Company added 25 new projects into its pipeline, including 8 external projects under its “Win-the-Molecule” strategy. Despite the sizable capacity additions in 2022 (i.e., MFG7 in Ireland and MFG8 in Shijiazhuang, each with a capacity of 48k L), we forecast WuXi Bio to maintain a satisfying margin level thanks to effective cost controls through the continuous execution of WBS (WuXi Biologics Business System) which targets to improve gross profit margin (GMP) by 300bps in 2023.WuXi Bio management maintained its full-year guidance unchanged with revenue growth of 30% YoY and attributable adjusted net income of 26% YoY for 2023E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

WuXi Biologics (2269 HK) – 2023E growth outlook remains intact

China

WuXi Biologics (Cayman) Inc. is a leading open-access R&D capability and technology platform company serving the pharmaceutical, biotechnology, and medical device industries, with operations in China, U.S., and Iceland.  We provide a broad and integrated portfolio of laboratory and manufacturing services throughout the drug and medical device R&D process.  Our services are designed to help our global partners in shortening the cycle and lowering the cost of drug and medical device R&D through cost-effective and efficient solutions. 

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Wuxi Biologics (2269 HK)

Porton Pharma Solutions (300363.CH) 23H1 - Performance Pressure Would Remain in 2023

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Xinyao (Criss) Wang

WuXi XDC Cayman Pre-IPO Tearsheet

WuXi XDC Cayman Inc (1877628D HK) is looking to raise >US$100m in its upcoming Hong Kong IPO. The bookrunners on the deal are Morgan Stanley,...

Clarence Chu

Pre-IPO WuXi XDC - The Beautiful Story and the Truth Behind

How far WuXi XDC can go in the future depends on the real market space of ADC and the company's performance. But as a capital operation, good story...

Xinyao (Criss) Wang

China CXO Has Reached a Crossroads - Time to Reconsider

Investors seem to have lost faith in China healthcare due to a plunge in CXO shares. This view is biased. It's time to clarify key logical points...

Xinyao (Criss) Wang

WuXi Biologics (2269 HK) – 2023E growth outlook remains intact

WuXi Bio management maintained its full-year guidance unchanged with revenue growth of 30% YoY and attributable adjusted net income of 26% YoY for...

CMB International

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