HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The NHSA has issued clear instructions for VBP in 2025, including two batches of national VBP of drugs and one batch of medical consumables VBP. TCM will also be included.</li>
<li>The sales growth of GLP-1s has entered a turning point, it will be far from the previously high expectations. The actual market size of GLP-1s could be only US$100 billion.</li>
<li>Rapid sales growth of Efgartigimod is the key factor for Zai Lab to narrow the losses.But whether it can be breakeven relies on the decline of cost/expenses, not revenue growth.</li>
</ul>


The NHSA has issued clear instructions for VBP in 2025, including two batches of national VBP of drugs and one batch of medical consumables VBP. TCM will also be included.
The sales growth of GLP-1s has entered a turning point, it will be far from the previously high expectations. The actual market size of GLP-1s could be only US$100 billion.
Rapid sales growth of Efgartigimod is the key factor for Zai Lab to narrow the losses.But whether it can be breakeven relies on the decline of cost/expenses, not revenue growth.


China Healtchare Weely (Mar.16) - 2025 VBP Instructions, GLP-1s Cooling Down, Zai Lab's Headwinds

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Equity Capital Markets

Duality Biotherapeutics / Equity Capital Markets

<ul>
<li>Duality Biotherapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$300m via a Hong Kong listing.</li>
<li>The company has passed the hearing for the listing and filed a new version of the prospectus.</li>
<li>We look at the difference between previous filing and current filing.</li>
</ul>


Duality Biotherapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$300m via a Hong Kong listing.
The company has passed the hearing for the listing and filed a new version of the prospectus.
We look at the difference between previous filing and current filing.


Duality Biotherapeutics (映恩生物) Pre-IPO: PHIP Updates Show Slight Improvements

China Resources Sanjiu Medical & Pharma / Equity Bottom-Up

China Resources Sanjiu Medical & Pharma (000999 CH)

<ul>
<li>If product sales cannot continue to climb rapidly and dilute the costs, the final profit will gradually fade away. Therefore, Chinese biotech companies need new blockbuster products to drive growth.</li>
<li>The decline in the number of biotech companies in the future is actually “a supply side reform” that fundamentally reduces market competition, which obviously benefit those first-tier companies.</li>
<li>The acquisition of Tasly by <a href="https://www.smartkarma.com/entities/china-resources-sanju-mdcl-phrm-co-ltd" target="_blank" data-smartkarma-citation="entities:6218:1" rel="noopener">China Resources Sanjiu Medical &amp; Pharma </a>is still in progress. The deal may not be completed until 25H1 if the approval time is not enough.</li>
</ul>


If product sales cannot continue to climb rapidly and dilute the costs, the final profit will gradually fade away. Therefore, Chinese biotech companies need new blockbuster products to drive growth.
The decline in the number of biotech companies in the future is actually “a supply side reform” that fundamentally reduces market competition, which obviously benefit those first-tier companies.
The acquisition of Tasly by China Resources Sanjiu Medical &amp; Pharma is still in progress. The deal may not be completed until 25H1 if the approval time is not enough.


China Healthcare Weekly (Feb.2)- Update on CR Sanjiu's Acquisition of Tasly, China Biotech's Outlook

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>Mainland China investors continued to increase their purchases of Hong Kong shares through the southbound connect platform after Trump's win. Mainland investors bought a record HK$800B of HK shares in 2024.</li>
<li>
<a href="https://www.smartkarma.com/entities/weimob-inc" target="_blank" data-smartkarma-citation="entities:27394:1" rel="noopener">Weimob Inc. (2013 HK)</a> announced it is connecting its Weimob mini-programs to Tencent's (700 HK) WeChat mini-shop. This move further integrates the SaaS company into Tencent's ecosystem.
</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> announced a license agreement with US-based <a href="https://www.smartkarma.com/entities/aadi-bioscience-inc" target="_blank" data-smartkarma-citation="entities:37488:1" rel="noopener">Aadi Bioscience (AADI US)</a>.  Also, Wuxi was not included in the Senate version of the BioSecure legislation improving investor sentiment.
</li>
</ul>


Mainland China investors continued to increase their purchases of Hong Kong shares through the southbound connect platform after Trump's win. Mainland investors bought a record HK$800B of HK shares in 2024.

Weimob Inc. (2013 HK) announced it is connecting its Weimob mini-programs to Tencent's (700 HK) WeChat mini-shop. This move further integrates the SaaS company into Tencent's ecosystem.


Wuxi Biologics (2269 HK) announced a license agreement with US-based Aadi Bioscience (AADI US).  Also, Wuxi was not included in the Senate version of the BioSecure legislation improving investor sentiment.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (December 26)

Event-Driven

Ping An Healthcare and Technology / Event-Driven

Ping An Healthcare and Technology (1833 HK)

<ul>
<li>Increasing revenue without increasing profits is “a big denial” of a company's business model. Unless Zai Lab significantly reduces costs and maintains revenue high growth, its investment value is low.</li>
<li>Junshi's 2024 revenue is likely to return to over RMB1.5 billion due to market share expansion in PD-1. Strict cost control will be the main theme for the future.</li>
<li>If PAGD’s share price is higher than HK$6.12, there would be arbitrage opportunity. If Ping An hopes other shareholders to choose cash dividend, future stock price may fall below HK$6.12.</li>
</ul>


Increasing revenue without increasing profits is “a big denial” of a company's business model. Unless Zai Lab significantly reduces costs and maintains revenue high growth, its investment value is low.
Junshi's 2024 revenue is likely to return to over RMB1.5 billion due to market share expansion in PD-1. Strict cost control will be the main theme for the future.
If PAGD’s share price is higher than HK$6.12, there would be arbitrage opportunity. If Ping An hopes other shareholders to choose cash dividend, future stock price may fall below HK$6.12.


China Healthcare Weekly (Dec.22) - Zai Lab, Junshi, How to Choose PA Good Doctor's Special Dividend?

China

Zai Lab is an innovative, research-based, commercial-stage biopharmaceutical company focused on discovering, developing, and commercializing innovative products for oncology, immunology, neuroscience, and infectious diseases. The company has commercialized products such as Zejula, Optune, Qinlock, Nuzyra, and Vyvgart in China. Zai Lab was founded in 2014 and is headquartered in Shanghai, China, and Cambridge, Massachusetts, USA.

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Zai Lab (9688 HK)

China Healtchare Weely (Mar.16) - 2025 VBP Instructions, GLP-1s Cooling Down, Zai Lab's Headwinds

NHSA sets VBP guideline for 2025, including TCM. GLP-1 sales growth slowing, market size may be US$100 billion. Efgartigimod sales crucial for Zai...

Xinyao (Criss) Wang

Duality Biotherapeutics (映恩生物) Pre-IPO: PHIP Updates Show Slight Improvements

China's Duality Biotherapeutics aims to raise $300m through a Hong Kong listing. We looked at the changes between previous filing and the PHIP...

Ke Yan, CFA, FRM

China Healthcare Weekly (Feb.2)- Update on CR Sanjiu's Acquisition of Tasly, China Biotech's Outlook

Chinese biotech companies need to develop new blockbuster products to sustain growth. A "supply side reform” benefits first-tier Biotech. The...

Xinyao (Criss) Wang

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (December 26)

Mainland investors are increasing their buying of HK shares after Trump's election win. Mainlanders bought a record HK$800B of shares this year and...

David Mudd

China Healthcare Weekly (Dec.22) - Zai Lab, Junshi, How to Choose PA Good Doctor's Special Dividend?

Increasing revenue without increasing profits is a big denial of Zai Lab's business model. Junshi will rebound with strict cost control.There's...

Xinyao (Criss) Wang

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China Healtchare Weely (Mar.16) - 2025 VBP Instructions, GLP-1s Cooling Down, Zai Lab's Headwinds

​NHSA sets VBP guideline for 2025, including TCM. GLP-1 sales growth slowing, market size may be US$100 billion. Efgartigimod sales crucial for Zai...

Xinyao (Criss) Wang

Duality Biotherapeutics (映恩生物) Pre-IPO: PHIP Updates Show Slight Improvements

​China's Duality Biotherapeutics aims to raise $300m through a Hong Kong listing. We looked at the changes between previous filing and the PHIP...

Ke Yan, CFA, FRM

China Healthcare Weekly (Feb.2)- Update on CR Sanjiu's Acquisition of Tasly, China Biotech's Outlook

​Chinese biotech companies need to develop new blockbuster products to sustain growth. A "supply side reform” benefits first-tier Biotech. The...

Xinyao (Criss) Wang

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (December 26)

Mainland investors are increasing their buying of HK shares after Trump's election win. Mainlanders bought a record HK$800B of shares this year and...

David Mudd

China Healthcare Weekly (Dec.22) - Zai Lab, Junshi, How to Choose PA Good Doctor's Special Dividend?

Increasing revenue without increasing profits is a big denial of Zai Lab's business model. Junshi will rebound with strict cost control.There's...

Xinyao (Criss) Wang

NHSA sets VBP guideline for 2025, including TCM. GLP-1 sales growth slowing, market size may be US$100 billion. Efgartigimod sales crucial for Zai...

China's Duality Biotherapeutics aims to raise $300m through a Hong Kong listing. We looked at the changes between previous filing and the PHIP...

Chinese biotech companies need to develop new blockbuster products to sustain growth. A "supply side reform” benefits first-tier Biotech. The...