HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Over 15 years' experience in both finance and healthcare, covering clinic operations, investment and equity research in both China and overseas.

Pre-IPO PegBio Co., Ltd. (PHIP Updates) - Some Points Worth the Attention

Pre-IPO Foshan Haitian Flavouring & Food Company - The Challenges Ahead and the Outlook

Pre-IPO Huge Dental Limited - The Business and the Concerns Behind

China Healthcare Weekly (Mar.1) - Prioritize Big Pharma, Real Ownership of Pricing Power, Hengrui

Jiangsu Hengrui Medicine (600276.CH) - Share Price Is at Risk of Correction

Jiangsu Hengrui Medicine (600276.CH) - More Downside Ahead; The Long Logic Doesn't Exist

BeiGene (6160.HK/BGNE.US) 24Q2 - It Is Time to Open a New Chapter in China's Pharmaceutical Industry

Equity Capital Markets

Jiangsu Hengrui Medicine / Equity Capital Markets

<ul>
<li>Hengrui plans to IPO in Hong Kong, but it hasn't yet completed the business transformation from generic drugs to innovative drugs, and is still facing the negative impact of VBP.</li>
<li>The key point is whether the innovative drug business has sustained high enough growth rate to offset the decline in generic drug business so as to support the high valuation.</li>
<li>Hengrui is overvalued in A-Share. We think Hengrui’s valuation should be lower than that of <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene (6160 HK)</a> and <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group-co" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical Group (3692 HK)</a> in Hong Kong stock market.</li>
</ul>


Hengrui plans to IPO in Hong Kong, but it hasn't yet completed the business transformation from generic drugs to innovative drugs, and is still facing the negative impact of VBP.
The key point is whether the innovative drug business has sustained high enough growth rate to offset the decline in generic drug business so as to support the high valuation.
Hengrui is overvalued in A-Share. We think Hengrui’s valuation should be lower than that of BeiGene (6160 HK) and Hansoh Pharmaceutical Group (3692 HK) in Hong Kong stock market.


Pre-IPO Jiangsu Hengrui Medicine - High Valuation Cannot Be Justified