HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The market is clearly satisfied with WuXi Bio’s interim results. Growth of both non-COVID revenue and new projects were beyond expectations. This makes us look forward to 2023 full-year result.</li>
<li>There’s a significant strength gap between WuXi Bio and Lonza/Samsung Biologics in undertaking commercial-stage orders, which puts WuXi Bio at a disadvantage in competition,making it more vulnerable to financing environment.</li>
<li>It’s not impossible to restore the high growth before COVID,but WuXi Bio needs to meet two conditions.Instead of betting on a V-shaped reversal, it's wiser to take profits in time.</li>
</ul>


The market is clearly satisfied with WuXi Bio’s interim results. Growth of both non-COVID revenue and new projects were beyond expectations. This makes us look forward to 2023 full-year result.
There’s a significant strength gap between WuXi Bio and Lonza/Samsung Biologics in undertaking commercial-stage orders, which puts WuXi Bio at a disadvantage in competition,making it more vulnerable to financing environment.
It’s not impossible to restore the high growth before COVID,but WuXi Bio needs to meet two conditions.Instead of betting on a V-shaped reversal, it's wiser to take profits in time.


Wuxi Biologics (2269.HK) 23H1 - The Positives, the Negatives and the Outlook

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.</li>
<li>Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.</li>
<li>Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.</li>
</ul>


Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.
Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.
Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.


<ul>
<li>Recent business updates of WuXi Bio led to a decline in WuXi AppTec's share price and changed investors' expectations for CXO. Now is the time to adjust forecasts.</li>
<li>We analyzed the growth rate of various business of WuXi AppTec in 2024. In a neutral scenario, growth next year could fall short of management's guidance.Reversal in 2025 is uncertain.</li>
<li>If WuXi AppTec "unexpectedly" receives blockbuster orders, which are large enough to hedge against the downward trend of WuXi AppTec’s other businesses, then it will help to change performance expectations.</li>
</ul>


Recent business updates of WuXi Bio led to a decline in WuXi AppTec's share price and changed investors' expectations for CXO. Now is the time to adjust forecasts.
We analyzed the growth rate of various business of WuXi AppTec in 2024. In a neutral scenario, growth next year could fall short of management's guidance.Reversal in 2025 is uncertain.
If WuXi AppTec "unexpectedly" receives blockbuster orders, which are large enough to hedge against the downward trend of WuXi AppTec’s other businesses, then it will help to change performance expectations.


WuXi AppTec (2359.HK/603259.CH) - How Bad Things Could Be?

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mankind-pharma-ltd" target="_blank" data-smartkarma-citation="entities:36389:1" rel="noopener">Mankind Pharma</a> is looking to raise about US$1bn in its upcoming India IPO.</li>
<li>MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.</li>
<li>In this note, we will undertake a peer comparison with some of the India listed and domestically focussed pharmaceutical firms.</li>
</ul>



Mankind Pharma is looking to raise about US$1bn in its upcoming India IPO.
MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
In this note, we will undertake a peer comparison with some of the India listed and domestically focussed pharmaceutical firms.


Mankind Pharma Pre-IPO - Peer Comparison - One of the Largest, with Better Growth and Margins

Thematic (Sector/Industry)

<ul>
<li>The rebounds in healthcare sector is more due to oversold. Unfriendly macro environment could make stock price fluctuate largely.Investors would find better places to long than the current valuation level.</li>
<li>The new document about payment management measures for new technology out of CHS-DRG payment scope is an important “policy correction” signal, but there are still problems remain to be solved.</li>
<li>We analyzed our top picks and investment logic in CXO, pharmaceuticals and medical device industry. Overall, as a “defensive sector”, China healthcare has investment value in such complicated external environment.</li>
</ul>


The rebounds in healthcare sector is more due to oversold. Unfriendly macro environment could make stock price fluctuate largely.Investors would find better places to long than the current valuation level.
The new document about payment management measures for new technology out of CHS-DRG payment scope is an important “policy correction” signal, but there are still problems remain to be solved.
We analyzed our top picks and investment logic in CXO, pharmaceuticals and medical device industry. Overall, as a “defensive sector”, China healthcare has investment value in such complicated external environment.


2022H2 China Healthcare Investment Strategy and Top Picks

China

WuXi Biologics (Cayman) Inc. is a leading open-access R&D capability and technology platform company serving the pharmaceutical, biotechnology, and medical device industries, with operations in China, U.S., and Iceland.  We provide a broad and integrated portfolio of laboratory and manufacturing services throughout the drug and medical device R&D process.  Our services are designed to help our global partners in shortening the cycle and lowering the cost of drug and medical device R&D through cost-effective and efficient solutions. 

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Wuxi Biologics (2269 HK)