China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>Baba's recent management change - Daniel Zhang proposed stepping down</li>
<li>NHC Director said healthcare anti-corruption must balance pros and cons, suggesting the campaign might nearing its end</li>
<li>Alibaba's subsidiary, Lingxi Games, has released a self-developed new mobile game called "Forest Kingdom." (森之国度) </li>
</ul>


Baba's recent management change - Daniel Zhang proposed stepping down
NHC Director said healthcare anti-corruption must balance pros and cons, suggesting the campaign might nearing its end
Alibaba's subsidiary, Lingxi Games, has released a self-developed new mobile game called "Forest Kingdom." (森之国度) 


China TMT Update-Baba/Healthcare-Daniel Zhang Stepping Down/ Anti-Corruption Might Nearing Its End

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

Innovent Biologics Inc / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a> (IB) aims to raise around US$313m for R&amp;D and marketing.</li>
<li>The company has undertaken a number of deals in the past, with the overall results being mixed.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>



Innovent Biologics Inc (1801 HK) (IB) aims to raise around US$313m for R&amp;D and marketing.
The company has undertaken a number of deals in the past, with the overall results being mixed.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Innovent Biologics Placement - Has Ample Cash but the Discount Is Enticing

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>2023 is a crucial year for Zai Lab.It’s the first time for Zai Lab to demonstrate the profitability of license-in model.If it fails, investors would lose confidence in the company.</li>
<li>There is little correlation between the four commercialized products, which makes commercialization difficult and leads to low efficiency/high costs for sales team. So, breakeven could be more distant than expected.</li>
<li>Zai Lab's current pipelines are hard to make money. There are concerns whether its business model is sustainable in the long term. As its valuation lacks an “anchor”, risk is high.</li>
</ul>


2023 is a crucial year for Zai Lab.It’s the first time for Zai Lab to demonstrate the profitability of license-in model.If it fails, investors would lose confidence in the company.
There is little correlation between the four commercialized products, which makes commercialization difficult and leads to low efficiency/high costs for sales team. So, breakeven could be more distant than expected.
Zai Lab's current pipelines are hard to make money. There are concerns whether its business model is sustainable in the long term. As its valuation lacks an “anchor”, risk is high.


Zai Lab (9688.HK/ZLAB.US) 2022/2023Q1 - The True Colors and the Risks Behind

<ul>
<li>The 9th national VBP has begun. We analyzed the major big varieties with sales over RMB1 billion included in this VBP and the impact on related domestic pharmaceutical companies. </li>
<li>"Concept validation" of the business model of Chinese Biotech companies has been completed. Even under enormous pressure of medical insurance fee control policy, drug sales remain a reliable profit model.</li>
<li>Medlive's weak share price performance has a reason. The significant profitability increase in 23H1 wasn't from the improvement of main business. Its business model needs time to be further validated.</li>
</ul>


The 9th national VBP has begun. We analyzed the major big varieties with sales over RMB1 billion included in this VBP and the impact on related domestic pharmaceutical companies. 
"Concept validation" of the business model of Chinese Biotech companies has been completed. Even under enormous pressure of medical insurance fee control policy, drug sales remain a reliable profit model.
Medlive's weak share price performance has a reason. The significant profitability increase in 23H1 wasn't from the improvement of main business. Its business model needs time to be further validated.


China Healthcare Weekly (Sep.8)- 9th VBP, Reliable Profit Model of Biotech, Medlive, China's Outlook

Shanghai Junshi Biosciences  / Equity Bottom-Up

<ul>
<li>IPO rules in SSE STAR Market faces adjustments, so investors have lowered expectations, which will affect the fundraising ecology. Recovery of China’s financing environment would be slower than US/Europe.</li>
<li>The CSRC has issued new policies related to stamp duty, IPO, and reduction of shares held by listed companies, which would significantly affect the capitalization path of pharmaceutical companies.</li>
<li>Junshi is “an interesting Biotech” that once generated sales/profits in scale, but is losing money again.Since Junshi is outside the first echelon and the gap is widening, we remain conservative. </li>
</ul>


IPO rules in SSE STAR Market faces adjustments, so investors have lowered expectations, which will affect the fundraising ecology. Recovery of China’s financing environment would be slower than US/Europe.
The CSRC has issued new policies related to stamp duty, IPO, and reduction of shares held by listed companies, which would significantly affect the capitalization path of pharmaceutical companies.
Junshi is “an interesting Biotech” that once generated sales/profits in scale, but is losing money again.Since Junshi is outside the first echelon and the gap is widening, we remain conservative. 


China Healthcare Weekly (Sep.1) - China's New IPO Reform, Financing Environment, Junshi Biosciences

China

Innovent Biologics, Inc. operates as a biopharmaceutical company. The Company develops, manufactures, and distributes monoclonal antibody drug candidates for the treatment of oncology, ophthalmology, autoimmune, cardiovascular, and other diseases. Innovent Biologics serves customers in China.

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Innovent Biologics Inc (1801 HK)

China TMT Update-Baba/Healthcare-Daniel Zhang Stepping Down/ Anti-Corruption Might Nearing Its End

Daniel Zhang proposed stepping down;NHC Director said healthcare anti-corruption must balance pros and cons, suggesting the campaign nearing its...

Blue Lotus Research Institute

Innovent Biologics Placement - Has Ample Cash but the Discount Is Enticing

Innovent Biologics Inc (1801 HK) (IB) aims to raise around US$313m for R&D and marketing. In this note, we talk about the deal dynamics and run the...

Sumeet Singh

Zai Lab (9688.HK/ZLAB.US) 2022/2023Q1 - The True Colors and the Risks Behind

In the insight, we analyzed major investment logic flaws of Zai Lab. As we expected, the company's performance is not ideal. The license-in model...

Xinyao (Criss) Wang

China Healthcare Weekly (Sep.8)- 9th VBP, Reliable Profit Model of Biotech, Medlive, China's Outlook

9th national VBP has begun. We analyzed the impact on companies. 23H1 reports make us realize even with negative policy, China Biotech can still...

Xinyao (Criss) Wang

China Healthcare Weekly (Sep.1) - China's New IPO Reform, Financing Environment, Junshi Biosciences

CSRC issued new policies related to IPO reform in China.As IPO rules in A-share face adjustments, fundraising ecology will change.Junshi is far...

Xinyao (Criss) Wang

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