HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>WuXi Bio’s performance growth is obviously decreasing. Based on customer structure/development trend, overseas biotech is the main growth point,which means WuXi Bio would be more vulnerable to the external financing environment.</li>
<li>WuXi Bio expands manufacturing capacity aggressively through new construction/acquisitions. An important assumption is WuXi Bio can continue receiving overseas orders, otherwise its CDMO production capacity would be considered excessive.</li>
<li>Due to IRA,whether US market would reflect a slowdown in growth of healthcare spending, thereby depressing the potential return on drug R&amp;D? This is a fatal blow to China CXO.</li>
</ul>


WuXi Bio’s performance growth is obviously decreasing. Based on customer structure/development trend, overseas biotech is the main growth point,which means WuXi Bio would be more vulnerable to the external financing environment.
WuXi Bio expands manufacturing capacity aggressively through new construction/acquisitions. An important assumption is WuXi Bio can continue receiving overseas orders, otherwise its CDMO production capacity would be considered excessive.
Due to IRA,whether US market would reflect a slowdown in growth of healthcare spending, thereby depressing the potential return on drug R&amp;D? This is a fatal blow to China CXO.


Wuxi Biologics (2269.HK) 2022 Results - Key Takeaways and the Outlook

Equity Capital Markets

Shanghai Duoning Biotechnology / Equity Capital Markets

<ul>
<li>The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.</li>
<li>Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.</li>
<li>A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns. </li>
</ul>


The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.
Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.
A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns. 


Pre-IPO Shanghai Duoning Biotechnology - The Industry, the Business and the Concerns

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 Hong Kong Connect flows with our data engine for holding position as of March 10th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for China Mobile, Tencent, China Vanke, ICBC, CCB.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of March 10th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for China Mobile, Tencent, China Vanke, ICBC, CCB.


Hong Kong Connect Flows (Mar 10th): China Mobile, Tencent, China Vanke, ICBC, CCB

<ul>
<li>We analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.</li>
<li>We highlight inflows into China Mobile, GWM, Sensetime, and outflows from Tencent, HKEx, CCB, Meituan, BYD.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.
We highlight inflows into China Mobile, GWM, Sensetime, and outflows from Tencent, HKEx, CCB, Meituan, BYD.


Hong Kong Connect Flows Monthly: First Monthly Outflows in 12 Months

<ul>
<li>Pharmaron’s disappointing 2022 performance is just a start.Its business layout has always been "one step behind". CGT cannot become the main cornerstone business supporting valuation growth for the next stage.</li>
<li>The overall environment of CXO is different from that of the past. Even if Pharmaron finally achieves end-to-end integration,whether the prosperity of CXO industry still exists is a question mark.</li>
<li>Pharmaron may have entered a vicious circle, so that it is very challenging to generate the expected results no matter which direction the Company tries to break through.  </li>
</ul>


Pharmaron’s disappointing 2022 performance is just a start.Its business layout has always been "one step behind". CGT cannot become the main cornerstone business supporting valuation growth for the next stage.
The overall environment of CXO is different from that of the past. Even if Pharmaron finally achieves end-to-end integration,whether the prosperity of CXO industry still exists is a question mark.
Pharmaron may have entered a vicious circle, so that it is very challenging to generate the expected results no matter which direction the Company tries to break through.  


Pharmaron Beijing Co Ltd (3759.HK/300759.CH) - Start to Enter a Vicious Circle

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)