HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Cutia Therapeutics / Equity Capital Markets

<ul>
<li>Majority of Cutia’s products are based on license-in/distribution agreements. Cutia’s independent R&amp;D capability has yet to be proven. Stock prices of companies that completely rely on license-in are unsatisfactory.</li>
<li>Cutia's pipelines have unique characteristics. So, the requirements on team's ability are comprehensive. Purely medical background of Cutia's team could be a “hindrance” and may fail to commercialize them well.</li>
<li>There is a real need in the fields Cutia is focusing on, so the story is compelling. However, with limited commercialized products, it’s difficult to prove anything at current stage.</li>
</ul>


Majority of Cutia’s products are based on license-in/distribution agreements. Cutia’s independent R&amp;D capability has yet to be proven. Stock prices of companies that completely rely on license-in are unsatisfactory.
Cutia's pipelines have unique characteristics. So, the requirements on team's ability are comprehensive. Purely medical background of Cutia's team could be a “hindrance” and may fail to commercialize them well.
There is a real need in the fields Cutia is focusing on, so the story is compelling. However, with limited commercialized products, it’s difficult to prove anything at current stage.


Pre-IPO Cutia Therapeutics (CUT HK) - Outlook Is Uncertain Due to Unique Pipeline Characteristics

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Zai Lab (ZLAB) reported C1Q23 top line in-line with our estimate but operating/net loss much smaller than our estimate due to cut in R&amp;D spending. </li>
<li>ZLAB’s narrower losses in C4Q22 and C1Q23, achieved through R&amp;D cut, do demonstrate the viability of the company achieving commercial breakeven by 2023 and full breakeven by 2025. </li>
<li>We still think these viabilities have difficulties to achieve and even achieved, hurt the LT value of the company; We raised our TP from US$25 to US$29 but maintain SELL.</li>
</ul>


Zai Lab (ZLAB) reported C1Q23 top line in-line with our estimate but operating/net loss much smaller than our estimate due to cut in R&amp;D spending. 
ZLAB’s narrower losses in C4Q22 and C1Q23, achieved through R&amp;D cut, do demonstrate the viability of the company achieving commercial breakeven by 2023 and full breakeven by 2025. 
We still think these viabilities have difficulties to achieve and even achieved, hurt the LT value of the company; We raised our TP from US$25 to US$29 but maintain SELL.


[Zai LAB (ZLAB US) Target Price Change]: Demonstrating Directionally Business Model to Profit

<ul>
<li>ZaiLab reported C4Q22 top line 3% above our estimate. Operating profit was worse than our estimate and consensus while net income was better mainly due to government grant; </li>
<li>We maintain ZLAB’s business model is inherently flawed because each blockbuster drug it signed needs comprehensive sales support.</li>
<li>As a result, ZLAB’s pipeline needs to be heavily discounted; We maintain our SELL and cut TP from US$30 to US$25.</li>
</ul>


ZaiLab reported C4Q22 top line 3% above our estimate. Operating profit was worse than our estimate and consensus while net income was better mainly due to government grant; 
We maintain ZLAB’s business model is inherently flawed because each blockbuster drug it signed needs comprehensive sales support.
As a result, ZLAB’s pipeline needs to be heavily discounted; We maintain our SELL and cut TP from US$30 to US$25.


[Zai LAB (ZLAB US) Earnings Review]: Pretty Much the Same…Maintain SELL

<ul>
<li>ZaiLab and NovoCure (NVCR US, NR) surged on positive readout of Optune’s Phase III on Non-Small-Cell-Lung Cancer (NSCLC), a major indication win after the smaller ones in Glioblastoma and Mesothelioma.</li>
<li>We, however, caution that the readout is largely expected and Optune faces uncertainty in commercialization both globally and in China;</li>
<li>We raise TP to US$35 to reflect possible readouts in other cancer types</li>
</ul>


ZaiLab and NovoCure (NVCR US, NR) surged on positive readout of Optune’s Phase III on Non-Small-Cell-Lung Cancer (NSCLC), a major indication win after the smaller ones in Glioblastoma and Mesothelioma.
We, however, caution that the readout is largely expected and Optune faces uncertainty in commercialization both globally and in China;
We raise TP to US$35 to reflect possible readouts in other cancer types


Zai LAB (ZLAB.US/9688.HK)：TTF Is Not a Done Deal, Both China and Globally

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.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

China

Zai Lab Limited operates as a bio-pharmaceutical company. The Company researches and develops therapeutic technology for antibody-based oncology, autoimmune, and infectious diseases treatments. Zai Lab also manufactures drugs in the form of capsules, injections, and liquids. Zai Lab serves patients worldwide.

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Zai Lab Ltd (ZLAB US)

Pre-IPO Cutia Therapeutics (CUT HK) - Outlook Is Uncertain Due to Unique Pipeline Characteristics

Cutia need to clarify whether its positioning is to sell drugs or consumer products,as their strategies will be different. Cutia has to strengthen...

Xinyao (Criss) Wang

[Zai LAB (ZLAB US) Target Price Change]: Demonstrating Directionally Business Model to Profit

Zai Lab (ZLAB) reported C1Q23 top line in-line with our estimate but operating/net loss much smaller than our estimate due to cut in R&D spending...

Blue Lotus Research Institute

[Zai LAB (ZLAB US) Earnings Review]: Pretty Much the Same…Maintain SELL

We maintain ZLAB’s business model is inherently flawed because each blockbuster drug it signed needs comprehensive sales support. As a result,...

Blue Lotus Research Institute

Zai LAB (ZLAB.US/9688.HK)：TTF Is Not a Done Deal, Both China and Globally

ZaiLab and NovoCure surged on positive readout of Optune’s Phase III on Non-Small-Cell-Lung Cancer (NSCLC). We, however, caution that Optune faces...

Blue Lotus Research Institute

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

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