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

Thematic (Sector/Industry)

<ul>
<li>700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes released by NPPA, positive to gaming companies(+)</li>
<li>BGNE/9995HK：Daiichi and Zymeworks end antibody pact after seven years (-)</li>
<li>ZLAB：ZaiLab's partner Karua's Schizophrenia drug obtained positive Phase 3 data (+)</li>
</ul>


700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes released by NPPA, positive to gaming companies(+)
BGNE/9995HK：Daiichi and Zymeworks end antibody pact after seven years (-)
ZLAB：ZaiLab's partner Karua's Schizophrenia drug obtained positive Phase 3 data (+)


China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB - Foreign Game Codes(+)

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>SVB has special institutions in China and its business mode is Venture Lending. The closure of SVB could make it harder for Chinese startups to raise money from US investors/banks.</li>
<li>The scale of SVB is small, but it cannot be said that it has no impact on the fundamentals of China healthcare companies. Investors need to reassess the potential risks.</li>
<li>SVB’s woes would not be a serious blow to the US if government takes timely action. However, if BRICS currency is established, it would be real fatal for the dollar.</li>
</ul>


SVB has special institutions in China and its business mode is Venture Lending. The closure of SVB could make it harder for Chinese startups to raise money from US investors/banks.
The scale of SVB is small, but it cannot be said that it has no impact on the fundamentals of China healthcare companies. Investors need to reassess the potential risks.
SVB’s woes would not be a serious blow to the US if government takes timely action. However, if BRICS currency is established, it would be real fatal for the dollar.


“Sudden Death” of Silicon Valley Bank (SVB) - The Impact on China Healthcare

<ul>
<li>9926HK：Summit Therapeutics completed US$500mn rights offering to pay for Akeso's AK112 (+)</li>
<li>3690HK：Meituan closure of self-operated taxi business may have 6% benefit to net profit in 2023 (+)</li>
<li>ZLAB：HBM announced Phase III success of FcRn drug treating MG, about to compete against ZLAB's Efgartigimod(-)</li>
</ul>


9926HK：Summit Therapeutics completed US$500mn rights offering to pay for Akeso's AK112 (+)
3690HK：Meituan closure of self-operated taxi business may have 6% benefit to net profit in 2023 (+)
ZLAB：HBM announced Phase III success of FcRn drug treating MG, about to compete against ZLAB's Efgartigimod(-)


China TMT Update(Mar.8): 9926HK,ZLAB,3690HK: Meituan Closure of Self-Operated Taxi Business (+)

Equity Bottom-Up

<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>ZLAB: Merck's Keytruda received repeated setbacks on treating prostate cancer, but the result cannot benefit ZLAB(/)</li>
<li>9995HK: RemeGen preannounced 2022 results, which is slightly better than our estimate</li>
<li>1877HK: JUNSHI preannounced 2022 result, which was worse than we expected</li>
</ul>


ZLAB: Merck's Keytruda received repeated setbacks on treating prostate cancer, but the result cannot benefit ZLAB(/)
9995HK: RemeGen preannounced 2022 results, which is slightly better than our estimate
1877HK: JUNSHI preannounced 2022 result, which was worse than we expected


China TME Update (Mar.2) - ZLAB; 9995HK;1877HK

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)

China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB - Foreign Game Codes(+)

700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes; BGNE/9995HK：Daiichi and Zymeworks end antibody pact (-) ; ZLAB：ZaiLab's partner Karua's...

Blue Lotus Research Institute

“Sudden Death” of Silicon Valley Bank (SVB) - The Impact on China Healthcare

SVB's "sudden death" would affect Chinese healthcare companies. Investors need to reassess the risks of related companies.We don't think SVB’s woes...

Xinyao (Criss) Wang

China TMT Update(Mar.8): 9926HK,ZLAB,3690HK: Meituan Closure of Self-Operated Taxi Business (+)

ZLAB：HBM announced Phase III success of FcRn drug treating MG(-) 3690HK：Meituan closure of self-operated taxi business may have 6% benefit to net...

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

China TME Update (Mar.2) - ZLAB; 9995HK;1877HK

ZLAB: Merck's Keytruda received repeated setbacks on treating prostate cancer, but the result cannot benefit ZLAB(/); 9995HK: RemeGen preannounced...

Blue Lotus Research Institute

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