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 analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 111.2% as of May 5th.</li>
<li>The average A-H premium changed by -0.3ppt week on week, led by consumer staples, communication services, health care and offset by real estate, energy, information technology.</li>
<li>We highlight weekly changes in A-H premium for CCB, BOC, Sinopec, China Shenhua, CMOC, CRRC, China Southern Airlines, CSC Financials.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 111.2% as of May 5th.
The average A-H premium changed by -0.3ppt week on week, led by consumer staples, communication services, health care and offset by real estate, energy, information technology.
We highlight weekly changes in A-H premium for CCB, BOC, Sinopec, China Shenhua, CMOC, CRRC, China Southern Airlines, CSC Financials.


A-H Premium Weekly (May 5th): CCB, BOC, Sinopec, China Shenhua, CMOC, CRRC, China Southern Airlines

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Healthy earnings growth in 1Q23. WuXi AppTec reported 1Q23 revenue of RMB8,964mn, up 6% YoY.</li><li>It posted attributable recurring net income of RMB1,869mn, up 9% YoY, and attributable adjusted non-IFRS net income of RMB2,342mn, up 14% YoY.</li><li>1Q23 revenue / adjusted Non-IFRS net income accounted for 21%/ 22% of our 2023 full-year estimates, which were also in line with its historical range. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Healthy earnings growth in 1Q23. WuXi AppTec reported 1Q23 revenue of RMB8,964mn, up 6% YoY.It posted attributable recurring net income of RMB1,869mn, up 9% YoY, and attributable adjusted non-IFRS net income of RMB2,342mn, up 14% YoY.1Q23 revenue / adjusted Non-IFRS net income accounted for 21%/ 22% of our 2023 full-year estimates, which were also in line with its historical range. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

WuXi AppTec (603259 CH) – Healthy growth amid challenging environment

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>Excluding COVID-19 projects, some of WuXi AppTec’s conventional CXO business growth rate has declined significantly. So, the fading of COVID-19 dividend period is not the only reason for the performance decline.</li>
<li>The supply-side reform of innovative drugs is further deepened, and the effect of industry clearing is obvious. So, the “winner-takes-all” logic will be gradually deduced in the future.</li>
<li>WuXi AppTec’s controlling shareholders seem to “have foreseen something”- They could continue to reduce holdings on rallies in the future. Together with longer-than-expected industry winter, valuation center could further decline.</li>
</ul>


Excluding COVID-19 projects, some of WuXi AppTec’s conventional CXO business growth rate has declined significantly. So, the fading of COVID-19 dividend period is not the only reason for the performance decline.
The supply-side reform of innovative drugs is further deepened, and the effect of industry clearing is obvious. So, the “winner-takes-all” logic will be gradually deduced in the future.
WuXi AppTec’s controlling shareholders seem to “have foreseen something”- They could continue to reduce holdings on rallies in the future. Together with longer-than-expected industry winter, valuation center could further decline.


WuXi AppTec (2359.HK/603259.CH) 2023Q1 - The Signals Behind the Plunge in Stock Price

Hangzhou Tigermed Consulting C / Equity Bottom-Up

<ul>
<li>Tigermed's revenue growth in 2021/2022 would have been pessimistic if it were not for the large COVID-19 orders, which makes us worried about the Company's future growth in post-COVID era.</li>
<li>Profit margin could further decline due to increasing labor cost. Highly volatile financial profit would lead to more ugly profit performance. Higher domestic revenue proportion would limit future growth space.</li>
<li>The year 2022 marked a turning point in Tigermed's performance. Its subsequent growth shows a downward trend.We think its valuation should be lower than WuXi AppTec, with more downside ahead. </li>
</ul>


Tigermed's revenue growth in 2021/2022 would have been pessimistic if it were not for the large COVID-19 orders, which makes us worried about the Company's future growth in post-COVID era.
Profit margin could further decline due to increasing labor cost. Highly volatile financial profit would lead to more ugly profit performance. Higher domestic revenue proportion would limit future growth space.
The year 2022 marked a turning point in Tigermed's performance. Its subsequent growth shows a downward trend.We think its valuation should be lower than WuXi AppTec, with more downside ahead. 


Hangzhou Tigermed Consulting (3347HK)-Turning Point Emerge, Followed by Sharp Decline in Performance

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 110.7% as of Apr 21st.</li>
<li>The average A-H premium changed by -1.8ppt week on week, led by communication services, real estate, information technology.</li>
<li>We highlight weekly changes in A-H premium for Postal Savings Bank, China Rail, CRRC, China Coal, GWM, Everbright Sec, CSC Financial.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 110.7% as of Apr 21st.
The average A-H premium changed by -1.8ppt week on week, led by communication services, real estate, information technology.
We highlight weekly changes in A-H premium for Postal Savings Bank, China Rail, CRRC, China Coal, GWM, Everbright Sec, CSC Financial.


A-H Premium Weekly (Apr 21st): Postal Savings Bank, China Rail, CRRC, China Coal, GWM

China

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.

Price Gauge
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WuXi AppTec (2359 HK)

A-H Premium Weekly (May 5th): CCB, BOC, Sinopec, China Shenhua, CMOC, CRRC, China Southern Airlines

We analyzed A-H premium changes in the past week and highlight A-H premium changes for CCB, BOC, Sinopec, China Shenhua, CMOC, CRRC, China Southern...

Ke Yan, CFA, FRM

WuXi AppTec (603259 CH) – Healthy growth amid challenging environment

1Q23 revenue / adjusted Non-IFRS net income accounted for 21%/ 22% of our 2023 full-year estimates, which were also in line with its historical range.

CMB International