HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Intco Medical Technology  Lt / Equity Bottom-Up

<ul>
<li>The 2023 NRDL negotiation has officially begun since Friday. Pharmaceutical enterprises predict the price reduction would be more reasonable. But some company representatives were dissatisfactory with first-day negotiation results. </li>
<li>Although there're many optimistic judgments about the improved financing environment in both China and overseas markets, this may not be the case. Based on the data, we remain cautious instead.</li>
<li>As the disposable glove market gradually shows a warming trend, we are optimistic that <a href="https://www.smartkarma.com/entities/intco-medical-technology-co-lt" target="_blank" data-smartkarma-citation="entities:29782:1" rel="noopener">Intco Medical </a>would achieve a performance reversal in the future. The current valuation has bottomed out.</li>
</ul>


The 2023 NRDL negotiation has officially begun since Friday. Pharmaceutical enterprises predict the price reduction would be more reasonable. But some company representatives were dissatisfactory with first-day negotiation results. 
Although there're many optimistic judgments about the improved financing environment in both China and overseas markets, this may not be the case. Based on the data, we remain cautious instead.
As the disposable glove market gradually shows a warming trend, we are optimistic that Intco Medical would achieve a performance reversal in the future. The current valuation has bottomed out.


China Healthcare Weekly (Nov.17) - 2023 NRDL Negotiation, Financing Data Won't Lie, Intco Medical

Thematic (Sector/Industry)

<ul>
<li>While we’re optimistic about weight loss drug business, we also need to recognize the "true colors" of relevant companies, which helps us realize "when to participate and when to exit".</li>
<li>We analyzed the negatives/"flaws" of popular companies that favored by capital: <a href="https://www.smartkarma.com/entities/brightgene-bio-medical-technol" target="_blank" data-smartkarma-citation="entities:30356:1" rel="noopener">BrightGene Bio-Medical Technol (688166 CH)</a>, <a href="https://www.smartkarma.com/entities/hybio-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:20966:1" rel="noopener">Hybio Pharmaceutical (300199 CH)</a>, <a href="https://www.smartkarma.com/entities/hainan-poly-pharm-co-ltd" target="_blank" data-smartkarma-citation="entities:29739:1" rel="noopener">Hainan Poly Pharm (300630 CH), </a>Sinopep-Allsino, Kawin Technology, Highfine Biotech,etc.</li>
<li>Short-Term stock price rally are mainly driven by sentiment, but future valuation still needs to be supported by performance and fundamentals. Some companies are just conceptual hype in our view.</li>
</ul>


While we’re optimistic about weight loss drug business, we also need to recognize the "true colors" of relevant companies, which helps us realize "when to participate and when to exit".
We analyzed the negatives/"flaws" of popular companies that favored by capital: BrightGene Bio-Medical Technol (688166 CH), Hybio Pharmaceutical (300199 CH), Hainan Poly Pharm (300630 CH), Sinopep-Allsino, Kawin Technology, Highfine Biotech,etc.
Short-Term stock price rally are mainly driven by sentiment, but future valuation still needs to be supported by performance and fundamentals. Some companies are just conceptual hype in our view.


China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 10th.</li>
<li>We estimate the weekly outflows to be US$1,078.3 million, led by information technology, industrials, and offset by consumer staples, communication services, real estate.</li>
<li>We highlight flows for BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of November 10th.
We estimate the weekly outflows to be US$1,078.3 million, led by information technology, industrials, and offset by consumer staples, communication services, real estate.
We highlight flows for BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight.


Northbound Flows (Nov 10th): BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight

Asymchem Laboratories Tianjin / Equity Bottom-Up

<ul>
<li>Results of 9th national VBP was released. The average price reduction was 58% and the maximum price reduction was over 90%. <a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Hengrui (600276 CH)</a>'s challenge in VBP has just begun.</li>
<li>The whole CXO sector is more like a cyclical industry than a high-barrier industry. There’re still some pressures/risks have not been fully released. Its future may be darker than before.</li>
<li>Asymchem’s stock price performance follows the entire CXO sector. Whether Asymchem can obtain large Tirzepatide orders and provide investors with high certainty of outlook is the key for valuation reversal.</li>
</ul>


Results of 9th national VBP was released. The average price reduction was 58% and the maximum price reduction was over 90%. Hengrui (600276 CH)'s challenge in VBP has just begun.
The whole CXO sector is more like a cyclical industry than a high-barrier industry. There’re still some pressures/risks have not been fully released. Its future may be darker than before.
Asymchem’s stock price performance follows the entire CXO sector. Whether Asymchem can obtain large Tirzepatide orders and provide investors with high certainty of outlook is the key for valuation reversal.


China Healthcare Weekly (Nov.10) - 9th National VBP, Cyclicity of CXO Sector, Asymchem, Hengrui

<ul>
<li>Globalization and innovation are two core paths for companies’ development, but with completely different effects.Instead of rushing to go global, it’s better to calm down to focus on R&amp;D first.</li>
<li>Many domestic companies choose Me-Too strategy, which is considered a “shortcut”. However, Me-Too strategy is not always successful. We analyzed different scenarios to help investors better distinguish valuable Me-Too strategies.</li>
<li>There could be a potential short-term correction in healthcare sector. Since trading opportunities remain, rebound would come next, but stock-picking would not be the same as in the past.</li>
</ul>


Globalization and innovation are two core paths for companies’ development, but with completely different effects.Instead of rushing to go global, it’s better to calm down to focus on R&amp;D first.
Many domestic companies choose Me-Too strategy, which is considered a “shortcut”. However, Me-Too strategy is not always successful. We analyzed different scenarios to help investors better distinguish valuable Me-Too strategies.
There could be a potential short-term correction in healthcare sector. Since trading opportunities remain, rebound would come next, but stock-picking would not be the same as in the past.


China Healthcare Weekly (Nov.3)-Share Price Correction,Valuable Shortcut,Globalization Vs Innovation

China

Jiangsu Hengrui Medicine Co., Ltd. develops, manufactures, and markets a variety of medicines and medicine packing materials. The Company's products include anti-tumor medicines, pain-killers, anti-infection medicines, aluminum foil, and other related products.

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Jiangsu Hengrui Medicine (600276 CH)

China Healthcare Weekly (Nov.17) - 2023 NRDL Negotiation, Financing Data Won't Lie, Intco Medical

The 2023 NRDL negotiation has officially begun since Friday. Based on 23Q3 data, financing environment in China and overseas markets is far from...

Xinyao (Criss) Wang

China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

Some popular companies are favored by capital on the back of enthusiasm for weight loss drugs, but sometimes it's just "conceptual hype". We need...

Xinyao (Criss) Wang

Northbound Flows (Nov 10th): BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for BYD, Ping An Insurance, Eoptolink Technology Inc.,...

Ke Yan, CFA, FRM

China Healthcare Weekly (Nov.10) - 9th National VBP, Cyclicity of CXO Sector, Asymchem, Hengrui

Results of 9th national VBP were tragic. Hengrui hasn't escaped. CXO's industry prosperity has continued downward pressure. Asymchem still follows...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Healthcare Weekly (Nov.17) - 2023 NRDL Negotiation, Financing Data Won't Lie, Intco Medical

The 2023 NRDL negotiation has officially begun since Friday. Based on 23Q3 data, financing environment in China and overseas markets is far from...

Xinyao (Criss) Wang

China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

Some popular companies are favored by capital on the back of enthusiasm for weight loss drugs, but sometimes it's just "conceptual hype". We need...

Xinyao (Criss) Wang

Northbound Flows (Nov 10th): BYD, Ping An Insurance, Eoptolink Technology, Zhongji Innolight

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for BYD, Ping An Insurance, Eoptolink Technology Inc.,...

Ke Yan, CFA, FRM

China Healthcare Weekly (Nov.10) - 9th National VBP, Cyclicity of CXO Sector, Asymchem, Hengrui

Results of 9th national VBP were tragic. Hengrui hasn't escaped. CXO's industry prosperity has continued downward pressure. Asymchem still follows...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.3)-Share Price Correction,Valuable Shortcut,Globalization Vs Innovation

Success of globalization ultimately relies on strong innovative capabilities. Here's how to distinguish valuable shortcuts - Me-Too strategy....

Xinyao (Criss) Wang