HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The recent surge in Eurozone sovereign yields, particularly for France, has created pressure on the outlook for some HK-listed companies. </li>
<li>While the 100 largest companies generated an average of only 6% of revenue from Europe, 10 companies derived over 20%.</li>
<li>
<a href="https://www.smartkarma.com/entities/ck-hutchison-holdings-ltd" target="_blank" data-smartkarma-citation="entities:132:1" rel="noopener">CK Hutchison (1 HK)</a> group, <a href="https://www.smartkarma.com/entities/shein-global-holdings-limited" target="_blank" data-smartkarma-citation="entities:55372:1" rel="noopener">SHEIN Global (625 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corporation-class-b" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/lenovo-group-limited" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-biologics-cayman-inc" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> group, and <a href="https://www.smartkarma.com/entities/cosco-shipping-holdings-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:286:1" rel="noopener">COSCO SHIPPING Holdings (1919 HK)</a> are the top. </li>
</ul>


The recent surge in Eurozone sovereign yields, particularly for France, has created pressure on the outlook for some HK-listed companies. 
While the 100 largest companies generated an average of only 6% of revenue from Europe, 10 companies derived over 20%.

CK Hutchison (1 HK) group, SHEIN Global (625 HK), Xiaomi (1810 HK), Lenovo (992 HK), Wuxi Biologics (2269 HK) group, and COSCO SHIPPING Holdings (1919 HK) are the top. 


HK Strategy: Exposure to Europe - Who Are at Risk?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec (2359 HK)</a> is looking to raise around US$300m via selling some of its stake in <a href="https://www.smartkarma.com/entities/wuxi-xdc-cayman-inc" target="_blank" data-smartkarma-citation="entities:39917:1" rel="noopener">WuXi XDC (2268 HK)</a>.</li>
<li>Wuxi AppTec has sold a number of times before, although all the past secondary deals since 2025 haven’t done much.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>



WuXi AppTec (2359 HK) is looking to raise around US$300m via selling some of its stake in WuXi XDC (2268 HK).
Wuxi AppTec has sold a number of times before, although all the past secondary deals since 2025 haven’t done much.
In this note, we will talk about the placement and run the deal through our ECM framework.


Aequitas: WuXi XDC Placement - Past Deals Have Been Mixed but Has Strong Momentum

Healthcare Analyst

Wilfred Yuen

Equity Bottom-Up

<ul>
<li>
1H26 revenue up 37% YoY to RMB3.7bn and adjusted net profit was up 37% YoY to RMB1.0bn. Revenue mix (Pre/Post-IND) remained stable. 51 newly signed iCMC projects (record-high).
</li>
<li>
1H26 results call: management takeaways focus on 1) GPM outlook, 2) Singapore site utilisation ramp-up, 3) BioDlink integration, 4) commentary on project funnel, backlog growth, and 2026 guidance.</li>
<li>
At ~HK$78, the stock is currently trading at ~45/37x 2026E P/E (per our back-of-envelop estimates on IFRS and adjusted EPS basis). See inside for call takeaways and financial analysis.</li>
</ul>



1H26 revenue up 37% YoY to RMB3.7bn and adjusted net profit was up 37% YoY to RMB1.0bn. Revenue mix (Pre/Post-IND) remained stable. 51 newly signed iCMC projects (record-high).


1H26 results call: management takeaways focus on 1) GPM outlook, 2) Singapore site utilisation ramp-up, 3) BioDlink integration, 4) commentary on project funnel, backlog growth, and 2026 guidance.

At ~HK$78, the stock is currently trading at ~45/37x 2026E P/E (per our back-of-envelop estimates on IFRS and adjusted EPS basis). See inside for call takeaways and financial analysis.


WuXi XDC (2268.HK): 1H26 Results Call Takeaways: GPM Outlook, Singapore Site, BioDlink Integration

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>HK Alpha portfolio gained 2.22% in September, outperforming its benchmark by 5.36%. Since inception, the portfolio has outperformed HK indexes by 66% to 93%. HK ALPHA is up 14.35% YTD.</li>
<li>The Sharpe ratio stands at 1.22, compared with a benchmark of 0.56 since inception. This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.</li>
<li>The portfolio gained in the healthcare and energy sectors in August, while exposure to materials and communication services dragged on performance.</li>
</ul>


HK Alpha portfolio gained 2.22% in September, outperforming its benchmark by 5.36%. Since inception, the portfolio has outperformed HK indexes by 66% to 93%. HK ALPHA is up 14.35% YTD.
The Sharpe ratio stands at 1.22, compared with a benchmark of 0.56 since inception. This higher Sharpe ratio is driven by excess alpha, which represents more than 50% of returns.
The portfolio gained in the healthcare and energy sectors in August, while exposure to materials and communication services dragged on performance.


HONG KONG ALPHA PORTFOLIO: (September 2026)

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>Hansoh Pharmaceutical’s risvutatug rezetecan has been included in the Priority Review and Approval Procedure of NMPA. Innocare entered research collaboration and license agreement with Eli Lilly to develop new medicines.</li>
<li>Astellas Pharma initiated Phase 3 trial evaluating setidegrasib for NSCLC. Otsuka announced positive topline results from the Phase 3 trial evaluating ulefnersen in a genetic subtype of amyotrophic lateral sclerosis.</li>
<li>Elevar Therapeutics won FDA approval for Lyrfigtu for bile duct cancer. Telix Pharmaceuticals will acquire ITM Isotope Technologies, a global leader in radioisotope production and radiopharmaceutical development, for $1.65B upfront.</li>
</ul>


Hansoh Pharmaceutical’s risvutatug rezetecan has been included in the Priority Review and Approval Procedure of NMPA. Innocare entered research collaboration and license agreement with Eli Lilly to develop new medicines.
Astellas Pharma initiated Phase 3 trial evaluating setidegrasib for NSCLC. Otsuka announced positive topline results from the Phase 3 trial evaluating ulefnersen in a genetic subtype of amyotrophic lateral sclerosis.
Elevar Therapeutics won FDA approval for Lyrfigtu for bile duct cancer. Telix Pharmaceuticals will acquire ITM Isotope Technologies, a global leader in radioisotope production and radiopharmaceutical development, for $1.65B upfront.


APAC Healthcare Weekly (Sept 27) – Hansoh Pharma, Innocare, Astellas, Otsuka, Telix Pharmaceuticals

China

WuXi XDC is a leading global Contract Research, Development, and Manufacturing Organization (CRDMO) specializing in antibody-drug conjugates (ADCs) and other bioconjugates. The company offers integrated, end-to-end services for the discovery, process development, and GMP manufacturing of bioconjugates, monoclonal antibody intermediates, and payload-linkers. WuXi XDC was founded in 2013 and is headquartered in Wuxi, China.

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WuXi XDC (2268 HK)

HK Strategy: Exposure to Europe - Who Are at Risk?

A recent surge in Eurozone sovereign yields will put pressure on some companies. The 100 largest HK companies have only 6% of their revenue from...

Osbert Tang, CFA

Aequitas: WuXi XDC Placement - Past Deals Have Been Mixed but Has Strong Momentum

WuXi AppTec (2359 HK) is looking to raise around US$300m via selling some of its stake in WuXi XDC (2268 HK). In this note, we talk about the deal...

Sumeet Singh

WuXi XDC (2268.HK): 1H26 Results Call Takeaways: GPM Outlook, Singapore Site, BioDlink Integration

1H26 adjusted net profit +37% YoY. 51 newly signed iCMC projects (record-high); 1H26 call focus: 1) GPM outlook, 2) Singapore site ramp-up, 3)...

Wilfred Yuen

HONG KONG ALPHA PORTFOLIO: (September 2026)

HK Alpha portfolio gained 2.22% in September, outperforming its benchmark by 5.36%. Since inception, the portfolio has outperformed HK indexes by...

David Mudd

APAC Healthcare Weekly (Sept 27) – Hansoh Pharma, Innocare, Astellas, Otsuka, Telix Pharmaceuticals

Hansoh’s risvutatug rezetecan has been included in NMPA’s Priority Review list. Elevar Therapeutics won FDA approval for Lyrfigtu for bile duct...

Tina Banerjee

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