Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Hong Kong Stock Exchange has become the beneficiary of tightening listing requirements and accounting rules for foreign companies by the US regulatory authorities. Chinese companies that are listed in the US are forced to comply with US accounting standards and as a result, a large number of US-listed Chinese companies have sought secondary listings on the Hong Kong Stock Exchange over the last two years.Autohome, Baidu and Bilibili conducted secondary listings earlier this year and several other companies including <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> , <a href="https://www.smartkarma.com/entities/tencent-music-entertainment" target="_blank" data-smartkarma-citation="entities:27255:1" rel="noopener">Tencent Music (TME US)</a> and <a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a>  are said to be in the process of securing secondary listings in Hong Kong due to the fear of being delisted from the US Exchange.As these companies rush for secondary listings in Hong Kong, in a series of reports, we analyse 10 of the secondary listings on the Hong Kong Stock Exchange over the last 2-years. These 10 companies include <a href="https://www.smartkarma.com/entities/autohome-inc-adr" target="_blank" data-smartkarma-citation="entities:20234:1" rel="noopener">Autohome Inc (Adr) (ATHM US)</a> , <a href="https://www.smartkarma.com/entities/gds-holdings-adr" target="_blank" data-smartkarma-citation="entities:23649:1" rel="noopener">GDS Holdings (ADR) (GDS US)</a> , <a href="https://www.smartkarma.com/entities/zai-lab-ltd" target="_blank" data-smartkarma-citation="entities:25877:1" rel="noopener">Zai Lab Ltd (ZLAB US)</a> , <a href="https://www.smartkarma.com/entities/baozun-inc" target="_blank" data-smartkarma-citation="entities:24184:1" rel="noopener">Baozun Inc. (BZUN US)</a> , <a href="https://www.smartkarma.com/entities/zto-express" target="_blank" data-smartkarma-citation="entities:23628:1" rel="noopener">ZTO Express (ZTO US)</a> , <a href="https://www.smartkarma.com/entities/huazhu-group-ltd" target="_blank" data-smartkarma-citation="entities:17527:1" rel="noopener">Huazhu Group (HTHT US)</a> , <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> , <a href="https://www.smartkarma.com/entities/netease-inc-adr" target="_blank" data-smartkarma-citation="entities:17203:1" rel="noopener">NetEase Inc (NTES US)</a> , <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> and <a href="https://www.smartkarma.com/entities/beigene" target="_blank" data-smartkarma-citation="entities:23712:1" rel="noopener">BeiGene (BGNE US)</a> .

Hong Kong Stock Exchange has become the beneficiary of tightening listing requirements and accounting rules for foreign companies by the US regulatory authorities. Chinese companies that are listed in the US are forced to comply with US accounting standards and as a result, a large number of US-listed Chinese companies have sought secondary listings on the Hong Kong Stock Exchange over the last two years.Autohome, Baidu and Bilibili conducted secondary listings earlier this year and several other companies including Trip.com (TCOM US) , Tencent Music (TME US) and Vipshop Holdings (VIPS US)  are said to be in the process of securing secondary listings in Hong Kong due to the fear of being delisted from the US Exchange.As these companies rush for secondary listings in Hong Kong, in a series of reports, we analyse 10 of the secondary listings on the Hong Kong Stock Exchange over the last 2-years. These 10 companies include Autohome Inc (Adr) (ATHM US) , GDS Holdings (ADR) (GDS US) , Zai Lab Ltd (ZLAB US) , Baozun Inc. (BZUN US) , ZTO Express (ZTO US) , Huazhu Group (HTHT US) , JD.com Inc (ADR) (JD US) , NetEase Inc (NTES US) , Alibaba Group (BABA US) and BeiGene (BGNE US) .

ADR/HKEX Analysis: Lower Trading Volumes on HKEX Show Limited Liquidity Compared to the US

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

On February 24, 2021, <a href="https://www.smartkarma.com/entities/apollomics-inc" target="_blank" data-smartkarma-citation="entities:32186:1" rel="noopener">Apollomics Inc (1435488D US)</a> applied to be listed on the main board of the Hong Kong Stock Exchange. The Company is an innovative biotechnology company focusing on the discovery and development of oncology therapies. Apollomics intends to use the proceeds of this fundraising for R&amp;D activities, preparation for registration filings, commercial process development, manufacturing registrational trial material, expansion of business and other general corporate purposes. The following mainly provided insights on its major products in the pipeline.

On February 24, 2021, Apollomics Inc (1435488D US) applied to be listed on the main board of the Hong Kong Stock Exchange. The Company is an innovative biotechnology company focusing on the discovery and development of oncology therapies. Apollomics intends to use the proceeds of this fundraising for R&amp;D activities, preparation for registration filings, commercial process development, manufacturing registrational trial material, expansion of business and other general corporate purposes. The following mainly provided insights on its major products in the pipeline.

Pre-IPO Apollomics - Concerns on Competition and Commercialization Despite Some Promising Products

Equity Bottom-Up

Shanghai Junshi Biosciences  / Equity Bottom-Up

Last month, <a href="https://www.smartkarma.com/entities/shanghai-junshi-bioscience-a" target="_blank" data-smartkarma-citation="entities:31070:1" rel="noopener">Shanghai Junshi Bioscience (688180 CH)</a> released the performance announcement in 2020. Junshi is expected to achieve the revenue in 2020 of RMB1.595 billion, up 105.77% YoY. The Company's net loss attributed to shareholders could reach RMB1.672 billion, up 123.8% YoY. Meanwhile, the R&amp;D expenses are expected to reach RMB1.824 billion in 2020, up 92.79% YoY, which even exceeded the total revenue in 2020. It is also worth mentioning that the moment of glory of Junshi seems to be when it was listed on the SSE STAR Market in July 2020, with the market value of about RMB150 billion, and then its share price went all the way down to hit the bottom in December 2020 at RMB 64.8/share. On March 19, 2021, Junshi’s market value was RMB79 billion, down about 50% since July 2020. So could Junshi turn things around?

Last month, Shanghai Junshi Bioscience (688180 CH) released the performance announcement in 2020. Junshi is expected to achieve the revenue in 2020 of RMB1.595 billion, up 105.77% YoY. The Company's net loss attributed to shareholders could reach RMB1.672 billion, up 123.8% YoY. Meanwhile, the R&amp;D expenses are expected to reach RMB1.824 billion in 2020, up 92.79% YoY, which even exceeded the total revenue in 2020. It is also worth mentioning that the moment of glory of Junshi seems to be when it was listed on the SSE STAR Market in July 2020, with the market value of about RMB150 billion, and then its share price went all the way down to hit the bottom in December 2020 at RMB 64.8/share. On March 19, 2021, Junshi’s market value was RMB79 billion, down about 50% since July 2020. So could Junshi turn things around?

Shanghai Junshi Bioscience - Here Are the Challenges

Thematic (Sector/Industry)

1. Industry viewpoints:<ul>
<li>The National Healthcare Security Administration recently released a document about the intensive procurement of high-value orthopedic consumables, so finally it is approaching.</li>
<li>The market of orthopedic implant consumables is still dominated by imported enterprises, and domestic enterprises have a certain gap in market competitiveness compared with foreign giants.</li>
<li>As the market size of China's oncology treatment industry grows, the proportion of targeted drugs and immunotherapy drugs are expected to increase in the future, and private oncology hospitals could get more development opportunities.</li>
</ul>2. Company news: News about the new equity agreement, strategic cooperation and progress of new drug from <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a> and <a href="https://www.smartkarma.com/entities/jhbp-cy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:29201:1" rel="noopener">JHBP (Genor) (6998 HK)</a>.3. Market review:Last week, stock price for healthcare sector in A share decreased 0.83%, while CSI 300 decreased 2.71% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:
The National Healthcare Security Administration recently released a document about the intensive procurement of high-value orthopedic consumables, so finally it is approaching.
The market of orthopedic implant consumables is still dominated by imported enterprises, and domestic enterprises have a certain gap in market competitiveness compared with foreign giants.
As the market size of China's oncology treatment industry grows, the proportion of targeted drugs and immunotherapy drugs are expected to increase in the future, and private oncology hospitals could get more development opportunities.
2. Company news: News about the new equity agreement, strategic cooperation and progress of new drug from Wuxi Biologics (2269 HK), BeiGene Ltd (6160 HK) and JHBP (Genor) (6998 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 0.83%, while CSI 300 decreased 2.71% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

With the gradual marketing of biological drugs, almost all of the world's top ten blockbuster drugs were dominated by biological drugs. From the global total sales of blockbuster drugs announced in 2020, the top three were AbbVie's Humira ($19,832 million sales in 2020), Merck’s Keytruda ($14,380 million sales in 2020) and BMS’s Revlimid ($12,106 million sales in 2020). Throughout the world, biological drugs have become the main direction of future development. In China, domestic pharmaceutical enterprises have also laid out biological drug products in their pipelines. The following mainly analyzed the development situation and investment opportunities in this market.

With the gradual marketing of biological drugs, almost all of the world's top ten blockbuster drugs were dominated by biological drugs. From the global total sales of blockbuster drugs announced in 2020, the top three were AbbVie's Humira ($19,832 million sales in 2020), Merck’s Keytruda ($14,380 million sales in 2020) and BMS’s Revlimid ($12,106 million sales in 2020). Throughout the world, biological drugs have become the main direction of future development. In China, domestic pharmaceutical enterprises have also laid out biological drug products in their pipelines. The following mainly analyzed the development situation and investment opportunities in this market. 

Industry Report - Insights on China Biological Drug Market

China

BeiGene, Ltd. operates as a commercial stage biopharmaceutical company. The Company focuses on discovery, development, and commercialization of molecularly targeted and immuno-oncology drugs for the treatment of cancer. BeiGene serves patients worldwide.

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BeiGene (6160 HK)

ADR/HKEX Analysis: Lower Trading Volumes on HKEX Show Limited Liquidity Compared to the US

Given relatively lower levels of trading volumes in HK compared to the US Exchanges, it is questionable whether the ADR/HKEX listed companies are...

Shifara Samsudeen, ACMA, CGMA

Pre-IPO Apollomics - Concerns on Competition and Commercialization Despite Some Promising Products

This article provided insights on its major products in the pipeline in terms of competitive landscape, strength and challenges, as well as...

Xinyao (Criss) Wang

Shanghai Junshi Bioscience - Here Are the Challenges

The article analyzed the concerns and challenges that Junshi has to face in terms of PD-1, COVID-19 antibody drug, other products in the pipeline...

Xinyao (Criss) Wang

China Healthcare Weekly (Mar.19)

The article analyzed intensive procurement of high-value orthopedic consumables & its market pattern, trend of China's oncology treatment...

Xinyao (Criss) Wang

Industry Report - Insights on China Biological Drug Market

The article analyzed China biological drug market in terms of monoclonal antibody, bispecific antibody,ADC,domestic application to NMPA and also...

Xinyao (Criss) Wang

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