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 Hong Kong Connect flows with our data engine for holding position as of February 3rd.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Meituan, Sensetime, Tencent, China Construction Bank, Hong Kong Exchanges And Clearing.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of February 3rd.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Meituan, Sensetime, Tencent, China Construction Bank, Hong Kong Exchanges And Clearing.


Hong Kong Connect Flows (Feb 3rd): Meituan, Sensetime, Tencent, CCB, HKEx

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>This year's NRDL negotiations could be a turnaround. If the final result really shows a moderate price decline, it will be “a landmark event” for the innovative drug industry.</li>
<li>Starting from 23Q2, with the peak of respiratory disease/COVID-19 outbreak past, the demand for related TCM would weaken. Then, the pullback of TCM would really begin.</li>
<li>Even if biotech initially tells the story of becoming a biopharma to obtain financing, it will not be realized in the end.</li>
</ul>


This year's NRDL negotiations could be a turnaround. If the final result really shows a moderate price decline, it will be “a landmark event” for the innovative drug industry.
Starting from 23Q2, with the peak of respiratory disease/COVID-19 outbreak past, the demand for related TCM would weaken. Then, the pullback of TCM would really begin.
Even if biotech initially tells the story of becoming a biopharma to obtain financing, it will not be realized in the end.


China Healthcare Weekly (Jan.1) - NRDL Negotiation Turnaround, Pullback of TCM, Biotech Sales System

<ul>
<li>The government issued a central infrastructure investment budget of RMB26.52 billion in healthcare sector for 2022. Related leading domestic manufacturers would maintain relatively stable growth in the next 2-3 years.</li>
<li>Behind the wave of import substitution of endoscopes, the demand for anesthetic drugs would also increase, which are not affected by VBP. We think this market deserves investors’ attention.</li>
<li>Considering the large number of insomniacs, the resulting demand for treatment makes the insomniacs market show a good growth prospect.</li>
</ul>


The government issued a central infrastructure investment budget of RMB26.52 billion in healthcare sector for 2022. Related leading domestic manufacturers would maintain relatively stable growth in the next 2-3 years.
Behind the wave of import substitution of endoscopes, the demand for anesthetic drugs would also increase, which are not affected by VBP. We think this market deserves investors’ attention.
Considering the large number of insomniacs, the resulting demand for treatment makes the insomniacs market show a good growth prospect.


China Healthcare Weekly (Nov.18) - Central Investment Budget, Anesthetic Drugs, Insomniacs Demand

Equity Bottom-Up

Hutchison China MediTech Ltd / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hutchison-china-meditech-ltd-7c2c4b58-ca71-4ac4-befb-345e8d0f10ca" target="_blank" data-smartkarma-citation="entities:27342:1" rel="noopener">Hutchison China MediTech Ltd (HCM US)</a> (Hutchmed) didn’t perform well. Its cash holdings could last about two and a half years considering the cash burn rate.</li>
<li>Hutchmed’s three major commercialized products would all face different challenges. Feedbacks from FDA/MAA cast a shadow on the Company's internationalization prospects. </li>
<li>According to the current speed of pharmaceutical innovation, Hutchmed’s R&amp;D efficiency/productivity is not satisfactory. The current pipeline does not have core competitiveness. Bearish on outlook.</li>
</ul>



Hutchison China MediTech Ltd (HCM US) (Hutchmed) didn’t perform well. Its cash holdings could last about two and a half years considering the cash burn rate.
Hutchmed’s three major commercialized products would all face different challenges. Feedbacks from FDA/MAA cast a shadow on the Company's internationalization prospects. 
According to the current speed of pharmaceutical innovation, Hutchmed’s R&amp;D efficiency/productivity is not satisfactory. The current pipeline does not have core competitiveness. Bearish on outlook.


Hutchison China MediTech (HCM.US/13.HK) - The Pain Points Become More Pronounced

<ul>
<li>If excluding the contribution from COVID-19 related products, Pfizer’s performance growth could have been quite pessimistic. In terms of BD, Pfizer is “a big buyer” but the return is questionable. </li>
<li>We haven't seen any blockbuster new products in Pfizer’s pipeline that can make up for the losses caused by VBP/NRDL negotiation in China. Price reduction seems the only way out.</li>
<li>We cannot rule out that Pfizer may lose the China market in the event of further deterioration of Sino-US relations. This is a problem investors need to consider in advance.</li>
</ul>


If excluding the contribution from COVID-19 related products, Pfizer’s performance growth could have been quite pessimistic. In terms of BD, Pfizer is “a big buyer” but the return is questionable. 
We haven't seen any blockbuster new products in Pfizer’s pipeline that can make up for the losses caused by VBP/NRDL negotiation in China. Price reduction seems the only way out.
We cannot rule out that Pfizer may lose the China market in the event of further deterioration of Sino-US relations. This is a problem investors need to consider in advance.


Pfizer Inc (PFE.US) - What if Pfizer Loses the China Market in the Future?

China

Hansoh Pharmaceutical Group Company Limited operates as a pharmaceutical company. The Company manufactures and sells anti-infectives, anti-neoplastic agents, diabetes drugs, and other products. Hansoh Pharmaceutical Group markets its products throughout China.

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Hansoh Pharmaceutical Group (3692 HK)

Hong Kong Connect Flows (Feb 3rd): Meituan, Sensetime, Tencent, CCB, HKEx

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Meituan, Sensetime, Tencent, China Construction Bank, Hong...

Ke Yan, CFA, FRM

China Healthcare Weekly (Jan.1) - NRDL Negotiation Turnaround, Pullback of TCM, Biotech Sales System

This year's NRDL negotiation could be “a landmark event” for innovative drug industry.Pullback of TCM may really begin from 23Q2.We analyzed...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov.18) - Central Investment Budget, Anesthetic Drugs, Insomniacs Demand

New central infrastructure investment budget means stable growth of medical devices; Anesthetic drugs are not affected by VBP, which deserves...

Xinyao (Criss) Wang

Hutchison China MediTech (HCM.US/13.HK) - The Pain Points Become More Pronounced

Hutchmed's position in the industry isn't in the first echelon. Its commercialized products face different challenges, with...

Xinyao (Criss) Wang

Pfizer Inc (PFE.US) - What if Pfizer Loses the China Market in the Future?

Pfizer’s China business faces challenges due to VBP/NRDL negotiation and potential further deterioration of Sino-US relations. Together with...

Xinyao (Criss) Wang

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52-week Range

Market Cap (USDm)

P/E

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