HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Hangzhou Tigermed Consulting C / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-co-ltd-1008d609-73bd-4d76-8315-b29502a448ff" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK)</a> has released its 2021Q3 results, which indicated strong growth. However, if seen from the prior years, it may not be the case.</li>
<li>Tigermed seems to be more interested in investment business and M&amp;A, but the potential risks should be aware of by investors.</li>
<li>Compared with peers (<a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK) </a>and <a href="https://www.smartkarma.com/entities/pharmaron-beijing-co-ltd" target="_blank" data-smartkarma-citation="entities:28428:1" rel="noopener">Pharmaron Beijing Co Ltd-H (3759 HK)</a>), Tigermed is lagging behind in terms of CDMO business, integration and overseas business layout.</li>
<li>We are conservative about Tigermed’s outlook based on our analysis.</li>
</ul>



Hangzhou Tigermed Consulting (H) (3347 HK) has released its 2021Q3 results, which indicated strong growth. However, if seen from the prior years, it may not be the case.
Tigermed seems to be more interested in investment business and M&amp;A, but the potential risks should be aware of by investors.
Compared with peers (WuXi AppTec Co. Ltd. (2359 HK) and Pharmaron Beijing Co Ltd-H (3759 HK)), Tigermed is lagging behind in terms of CDMO business, integration and overseas business layout.
We are conservative about Tigermed’s outlook based on our analysis.


Hangzhou Tigermed Consulting (3347.HK/300347.CH) - More of an Investment Company than a CRO

<ul>
<li>Recently, <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a> released its 2021Q3 results, and the Company maintained strong growth. </li>
<li>The “reflection arc” of domestic negative policy impact as well as the increasing labor cost have begun to slowly reflect.</li>
<li>Together with other concerns that could also cast doubts on Wuxi AppTec’s outlook, investors are advised to get prepared in advance. </li>
</ul>


Recently, WuXi AppTec Co. Ltd. (2359 HK) released its 2021Q3 results, and the Company maintained strong growth. 
The “reflection arc” of domestic negative policy impact as well as the increasing labor cost have begun to slowly reflect.
Together with other concerns that could also cast doubts on Wuxi AppTec’s outlook, investors are advised to get prepared in advance. 


WuXi AppTec (2359.HK/603259.CH) 2021Q3 - Logic Change?

In October 2021, <a href="https://www.smartkarma.com/entities/pharmaron-beijing-co-ltd" target="_blank" data-smartkarma-citation="entities:28428:1" rel="noopener">Pharmaron Beijing Co Ltd-H (3759 HK) </a>completed the new investment in Zhongke Lingrui (Zhanjiang) Biotechnology. In the CRO industry, companies such as <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>, Pharmaron, <a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-co-ltd-1008d609-73bd-4d76-8315-b29502a448ff" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK) </a>and others are all on the hunt for acquisitions. However, investors seems to be more interested in when Pharmaron would truly achieve " integration". On the other hand, Pharmaron just released its 2021Q3 results. The revenue was RMB5.3 billion, up 47.84% YoY, and the net profit was RMB1 billion, up 31.02% YoY. This insight mainly analyzed the business and the concerns of the Company when it is compared with WuXi AppTec.

In October 2021, Pharmaron Beijing Co Ltd-H (3759 HK) completed the new investment in Zhongke Lingrui (Zhanjiang) Biotechnology. In the CRO industry, companies such as WuXi AppTec Co. Ltd. (2359 HK), Pharmaron, Hangzhou Tigermed Consulting (H) (3347 HK) and others are all on the hunt for acquisitions. However, investors seems to be more interested in when Pharmaron would truly achieve " integration". On the other hand, Pharmaron just released its 2021Q3 results. The revenue was RMB5.3 billion, up 47.84% YoY, and the net profit was RMB1 billion, up 31.02% YoY. This insight mainly analyzed the business and the concerns of the Company when it is compared with WuXi AppTec.

Pharmaron Beijing Co Ltd (3759.HK) 2021Q3 - Still Takes Time to Challenge Wuxi AppTec

Since <a href="https://www.smartkarma.com/entities/shanghai-medicilon-inc" target="_blank" data-smartkarma-citation="entities:30368:1" rel="noopener">Shanghai Medicilon Inc (688202 CH)</a> was listed on the SSE STAR Market in November 2019, in less than two years, its share price has been up about 1535%, the highest among all CRO companies in A-share. By the end of October 18, 2021, its market value was RMB42.9 billion. So, what is so special about this CRO company that its stock is rising so sharply? This insight mainly analyzed the business, the financial performance, the outlook and the concerns of the Company.

Since Shanghai Medicilon Inc (688202 CH) was listed on the SSE STAR Market in November 2019, in less than two years, its share price has been up about 1535%, the highest among all CRO companies in A-share. By the end of October 18, 2021, its market value was RMB42.9 billion. So, what is so special about this CRO company that its stock is rising so sharply? This insight mainly analyzed the business, the financial performance, the outlook and the concerns of the Company. 

Shanghai Medicilon (688202.CH)- Concerns on Long-Term Outlook Despite Amazing Short Term Performance

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

Hong Kong SFC reported aggregate short position as of Sep 30. The aggregate short value for equities increased by $634m (+1.0%) WoW but decreased by $2,946m (-4.3%) over the preceding four weeks. Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($3,222m, +1.6% WoW), China Merchants Bank Co., Ltd./3968 HK($1,958m, -2.9% WoW), Meituan/3690 HK($1,866m, +12.4% WoW), Zhongsheng Group Holdings Limited/881 HK($1,844m, +0.4% WoW), Tencent Holdings Limited/700 HK($1,456m, +10.0% WoW).<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/354/original/Hong_Kong_Market_Short_Position_Value_%28line%29_and_1W_Changes_%28bar%29_%28%24m%292021-10-09+17_49_30.png?1633834880" class="editor-image img-responsive" data-smartkarma-image-id="234354"></figure></section>

Hong Kong SFC reported aggregate short position as of Sep 30. The aggregate short value for equities increased by $634m (+1.0%) WoW but decreased by $2,946m (-4.3%) over the preceding four weeks.  Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($3,222m, +1.6% WoW), China Merchants Bank Co., Ltd./3968 HK($1,958m, -2.9% WoW), Meituan/3690 HK($1,866m, +12.4% WoW), Zhongsheng Group Holdings Limited/881 HK($1,844m, +0.4% WoW), Tencent Holdings Limited/700 HK($1,456m, +10.0% WoW).

HK Short Interest: Wuxi Apptec, China Resource Power Short Spiked in September

China

Hangzhou Tigermed Consulting Company Limited provides professional clinical research services for domestic and foreign pharmaceutical and health-related research and development. The Company's main services include clinical trial technology services, data management, and statistical analysis.

Hangzhou Tigermed Consulting (A) (300347 CH)

Pharmaron Beijing Co., Ltd. engages in discovery, development, and manufacturing spectrum for small molecule drugs, cell therapies, and gene therapies as well as providing testing services for medical devices and clinic research. The Company offers laboratory, clinical development, chemistry manufactory and control, and other services. Pharmaron Beijing conducts businesses based in China.

Joinn Laboratories (China) Co., Ltd. operates as a medicines development company. The Company offers drug development, pharmaceutical analysis, pharmacologic testing, and other related services. Joinn Laboratories (China) also provides pesticide and medical device safety evaluation services.

Maccura Biotechnology Co., Ltd. specializes in the research, development, manufacturing, sales, and service of in-vitro diagnostic products. The Company provides biochemistry, immunity, rapid detection, blood, molecular diagnosis, pathology, raw materials, and more. Maccura Biotechnology conducts business in China.

Guangzhou Boji Medical & Biotechnological Co., Ltd. is an outsourcing drug research and development company. The Company provides pharmaceutical companies the ability to conduct its researches and developments at lower cost levels and offers support to bring drugs and devices to the Chinese market quicker.

CSPC Pharmaceutical Group Limited, through its subsidiaries, manufactures and sells pharmaceutical products.  The Company's products include vitamin C, antibiotics and common generic drugs. The Company is also engages in the development of innovative drugs and antibiotics.

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. manufactures and markets Chinese traditional medicines, including Pientzehuang, Pientzehuang capsules, Pientzehuang lozenge, cough syrup, and other related products.

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd.

Guangzhou Improve Medical Instruments Co., Ltd. researches, develops, and manufactures medical instruments. The Company's products include evacuated blood collection system, microbe specimen collection and transport, clinical testing reagent, equipment for clinical specimen testing & processing, etc.

Yunnan Baiyao Group Co., Ltd. manufactures and markets traditional Chinese medicines.  The Company also operates in pharmaceutical wholesale and retail trading, empty capsules manufacturing, and hotel operation.

Divi's Laboratories Ltd. manufactures pharmaceutical products which include generic drugs and their intermediates. The Company also undertakes contract research activities for other pharmaceutical companies.

Charles River Laboratories International, Inc. provides research tools and support services that enable drug discovery and development.  The Company provides the animal research models required in research and development for new drugs, devices, and therapies.  Charles River's customers include pharmaceutical and biotechnology companies, hospitals, and academic institutions.

Illumina, Inc. develops, manufactures and markets integrated systems for the large scale analysis of genetic variation and biological function. The Company provides a comprehensive line of products and services that currently serve the sequencing, genotyping and gene expression markets for genomic research centers, pharmaceutical companies, academic institutions and biotechnology companies.

Bio-Techne Corp develops, manufactures and sells biotechnology products and clinical diagnostic controls. The Company specializes in proteins, cytokines, growth factors, immunoassays and small molecules.

Bruker Corporation designs, manufactures, and markets proprietary  life science systems based on spectrometry technology platforms.  The Company  also sells a range of field analytical systems for substance detection and  pathogen identification.  Bruker develops life science and advanced materials  research tools based on X-ray technology.

QIAGEN N.V. is a global provider of Sample to Insight solutions to transform biological materials into valuable molecular insights. The Company provides its workflows to customers in Molecular Diagnostics (human healthcare), Applied Testing (forensics, veterinary testing and food safety), Pharma (pharmaceutical and biotechnology companies) and Academia (life sciences research).

Medpace Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides cardiovascular, hematology, oncology, neurology, pediatrics, nephrology, and diagnostic services. Medpace Holdings serves patients worldwide.

Avantor, Inc. manufactures and distributes chemicals, reagents, and laboratory supplies. The Company offers amino acids, silicones, bioreagents, denaturants, gas, solvents, stains, dyes, and minerals. Avantor serves biopharma, healthcare, education and government, advanced technologies, life sciences, and applied materials industries worldwide.

Bio-Rad Laboratories, Inc. is a multinational manufacturer and distributor of life science research products, clinical diagnostics, and analytical instrumentation.  The Company's products and systems separate complex chemical and biological materials, as well as identify, analyze, and purify their components.

Bachem Holding AG specializes in the development and manufacture of peptides and oligonucleotides. The Company provides products for research, clinical development and commercial application to pharmaceutical and biotechnology companies. Bachem Holding serves customers worldwide.

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (603259 CH)

Hangzhou Tigermed Consulting (3347.HK/300347.CH) - More of an Investment Company than a CRO

The article analyzed Tigermed in terms of its 2021Q3 results, business model (investment business +M&A+CRO), the weakness in CDMO and global...

Xinyao (Criss) Wang

WuXi AppTec (2359.HK/603259.CH) 2021Q3 - Logic Change?

This article analyzed WuXi AppTec about its 2021Q3 results, the concerns on negative policy impact, increasing labor cost, financing capacity of...

Xinyao (Criss) Wang

Pharmaron Beijing Co Ltd (3759.HK) 2021Q3 - Still Takes Time to Challenge Wuxi AppTec

The insight analyzed Pharmaron from a different angle after it released the 2021Q3 results,which included the key bottleneck and concerns in terms...

Xinyao (Criss) Wang

Shanghai Medicilon (688202.CH)- Concerns on Long-Term Outlook Despite Amazing Short Term Performance

The insight mainly analyzed Medicilon in terms of the business, the financial performance, the comparison with peers, the outlook, the concerns and...

Xinyao (Criss) Wang

HK Short Interest: Wuxi Apptec, China Resource Power Short Spiked in September

We highlighted significant increase in short interest in Wuxi Apptec (2359 HK) and China Resource Power (836 HK) in September based on the latest...

Ke Yan, CFA, FRM

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