HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>NRDL negotiation has completely changed the pricing method/valuation logic of innovative drugs. Even if price reduction could be milder this year, it’s hard to reverse the shrinking market size/slowing growth.</li>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> has successively acquired several factories/production facilities built by domestic biotech companies at low cost. However, we have several concerns.</li>
<li>The industry is in the process of understanding and adapting to various changes. The model capital envisioned for biotech to both develop and then commercialize drugs successfully doesn’t work anymore.</li>
</ul>


NRDL negotiation has completely changed the pricing method/valuation logic of innovative drugs. Even if price reduction could be milder this year, it’s hard to reverse the shrinking market size/slowing growth.

Wuxi Biologics (2269 HK) has successively acquired several factories/production facilities built by domestic biotech companies at low cost. However, we have several concerns.
The industry is in the process of understanding and adapting to various changes. The model capital envisioned for biotech to both develop and then commercialize drugs successfully doesn’t work anymore.


China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails

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 statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 25th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Great Wall Motor (2333 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Tencent (700 HK), China Petroleum &amp; Chemical (386 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 25th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Great Wall Motor (2333 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Tencent (700 HK), China Petroleum &amp; Chemical (386 HK).


Hong Kong Buybacks Weekly (Nov 25th): Tencent, AIA, Great Wall Motor

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.

Thematic (Sector/Industry)

<ul><li>In our last report dated 17 October, we highlighted a list of 21 long ideas.</li><li>The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).</li><li>China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.</li></ul>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.

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI China index by 5.4ppt, delivering 0.2% return (vs MSCI China 5.6%).China Meidong Auto and Innovent Biologics delivered over 20% of return, and 4 of our 21 long ideas outperformed the benchmark.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.

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.</li>
<li>Overall, the net outflow over the past week was ~HK$0.14bn, split (-HK$0.47bn) for Shanghai and (+HK$0.32bn) for Shenzhen.</li>
<li>The largest inflows were in <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> and <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share (2828 HK)</a>. The largest outflows were in<a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of HK (2800 HK)</a>.</li>
</ul>


Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
Overall, the net outflow over the past week was ~HK$0.14bn, split (-HK$0.47bn) for Shanghai and (+HK$0.32bn) for Shenzhen.
The largest inflows were in Tencent (700 HK) and Hang Seng H Share (2828 HK). The largest outflows were inMeituan (3690 HK) and Tracker Fund of HK (2800 HK).


Shanghai/​​​​​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (18 November 2022)

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 18th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), PetroChina (386 HK), Swire Pacific (19 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), PetroChina (386 HK), Wuxi Biologics (2269 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Nov 18th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), PetroChina (386 HK), Swire Pacific (19 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), PetroChina (386 HK), Wuxi Biologics (2269 HK).


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)

China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails

NRDL negotiation completely changes the valuation logic of innovative drug. We've some concerns about WuXi Bio's new business updates. The model...

Xinyao (Criss) Wang

Hong Kong Buybacks Weekly (Nov 25th): Tencent, AIA, Great Wall Motor

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI...

CMB International

Shanghai/Shenzhen Southbound Connect: Weekly Moves (18 November 2022)

Inside is a recap of movements in the Shanghai/Shenzhen-HK Connect. Overall, the net outflow over the past week was ~HK$0.14bn, split (-HK$0.47bn)...

David Blennerhassett

Hong Kong Buybacks Weekly (Nov 18th):

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Aia (1299 HK),...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Healthcare Weekly (Nov25)-Wuxi Biologics, Valuation Logic Changed by NRDL, Biotech Model Fails

NRDL negotiation completely changes the valuation logic of innovative drug. We've some concerns about WuXi Bio's new business updates. The model...

Xinyao (Criss) Wang

Hong Kong Buybacks Weekly (Nov 25th): Tencent, AIA, Great Wall Motor

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

CMBI Research Focus List (November Edition) – Our best high conviction stock ideas

In our last report dated 17 October, we highlighted a list of 21 long ideas.The basket (equal weighted) of these 21 stocks underperformed MSCI...

CMB International

Shanghai/​​​​​​​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (18 November 2022)

Inside is a recap of movements in the Shanghai/Shenzhen-HK Connect. Overall, the net outflow over the past week was ~HK$0.14bn, split (-HK$0.47bn)...

David Blennerhassett

Hong Kong Buybacks Weekly (Nov 18th):

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Aia (1299 HK),...

Ke Yan, CFA, FRM

Shanghai/Shenzhen Southbound Connect: Weekly Moves (18 November 2022)