HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.</li>
<li>After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.</li>
<li>If long-term money doesn't have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can't be adjusted in time (e.g. CXO).</li>
</ul>


National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.
After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.
If long-term money doesn't have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can't be adjusted in time (e.g. CXO).


China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

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 analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 10th.</li>
<li>We estimate the weekly outflows to be US$1,487.9 million, led by financials, materials, and offset by industrials, health care, utilities.</li>
<li>We highlight flows for China Tourism Group Duty Free, Kweichow Moutai, Byd, China Merchants Bank, Inner Mongolia Yili Industrial, Longi Green Energy Technology, Tongwei, Luxshare Precision Industry.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 10th.
We estimate the weekly outflows to be US$1,487.9 million, led by financials, materials, and offset by industrials, health care, utilities.
We highlight flows for China Tourism Group Duty Free, Kweichow Moutai, Byd, China Merchants Bank, Inner Mongolia Yili Industrial, Longi Green Energy Technology, Tongwei, Luxshare Precision Industry.


Northbound Flows (Mar 10th): CTG, Moutai, Byd, CMB, Yili, Longi Green Energy, Tongwei, Luxshare

Equity Bottom-Up

<ul>
<li>Pharmaron’s disappointing 2022 performance is just a start.Its business layout has always been "one step behind". CGT cannot become the main cornerstone business supporting valuation growth for the next stage.</li>
<li>The overall environment of CXO is different from that of the past. Even if Pharmaron finally achieves end-to-end integration,whether the prosperity of CXO industry still exists is a question mark.</li>
<li>Pharmaron may have entered a vicious circle, so that it is very challenging to generate the expected results no matter which direction the Company tries to break through.  </li>
</ul>


Pharmaron’s disappointing 2022 performance is just a start.Its business layout has always been "one step behind". CGT cannot become the main cornerstone business supporting valuation growth for the next stage.
The overall environment of CXO is different from that of the past. Even if Pharmaron finally achieves end-to-end integration,whether the prosperity of CXO industry still exists is a question mark.
Pharmaron may have entered a vicious circle, so that it is very challenging to generate the expected results no matter which direction the Company tries to break through.  


Pharmaron Beijing Co Ltd (3759.HK/300759.CH) - Start to Enter a Vicious Circle

<ul>
<li>WuXi AppTec is facing how to keep high growth momentum under the high base of last year's performance.If there’s no high growth point with certainty,high valuation is hard to sustain.</li>
<li>The US wouldn’t stop tightening monetary policy until "it’s fully prepared".Investors need to consider a situation that high interest rate environment is longer than expected,under which CXO remains in trouble.</li>
<li>Market sentiment towards CXO has changed. We think CXO isn't suitable for long-term hold but only for short-term trade in 2023. Buying low and selling high is a better strategy.</li>
</ul>


WuXi AppTec is facing how to keep high growth momentum under the high base of last year's performance.If there’s no high growth point with certainty,high valuation is hard to sustain.
The US wouldn’t stop tightening monetary policy until "it’s fully prepared".Investors need to consider a situation that high interest rate environment is longer than expected,under which CXO remains in trouble.
Market sentiment towards CXO has changed. We think CXO isn't suitable for long-term hold but only for short-term trade in 2023. Buying low and selling high is a better strategy.


WuXi AppTec (2359.HK/603259.CH) - Not the Time to Be Happy Even After a Positive Profit Alert

<ul>
<li>The benefits of assisted reproduction being covered by medical insurance are limited. Its main role is still to delay not fundamentally reverse the decline of China's birth rate.</li>
<li>If the valuation collapse occurs collectively in one field, it basically reflects that Miss Market does not hold much hope for this field in the future, such as cell therapy. </li>
<li>We mainly analyzed some key points of the companies that investors may be interested in, such as <a href="https://www.smartkarma.com/entities/iray-technology-company-limited" target="_blank" data-smartkarma-citation="entities:35716:1" rel="noopener">iRay Technology (688301 CH)</a> and <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>.</li>
</ul>


The benefits of assisted reproduction being covered by medical insurance are limited. Its main role is still to delay not fundamentally reverse the decline of China's birth rate.
If the valuation collapse occurs collectively in one field, it basically reflects that Miss Market does not hold much hope for this field in the future, such as cell therapy. 
We mainly analyzed some key points of the companies that investors may be interested in, such as iRay Technology (688301 CH) and Shanghai Medicilon Inc (688202 CH).


China Healthcare Weekly (Feb.10) - Assisted Reproduction into NRDL, Cell Therapy, Medicilon, IRay,

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
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

WuXi AppTec (2359 HK)

China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

National VBP on ICL/sports medicine and other fields is coming.It's expected to see the emergence of high-price-oriented payment system for...

Xinyao (Criss) Wang

Northbound Flows (Mar 10th): CTG, Moutai, Byd, CMB, Yili, Longi Green Energy, Tongwei, Luxshare

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for CTG, Moutai, Byd, CMB, Yili, Longi Green Energy,...

Ke Yan, CFA, FRM

Pharmaron Beijing Co Ltd (3759.HK/300759.CH) - Start to Enter a Vicious Circle

Due to slow layout in end-to-end integration/high uncertainty in CGT, Pharmaron has entered a vicious circle as CXO's fast-growing dividend period...

Xinyao (Criss) Wang