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

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

Equity Capital Markets

Wuhan YZY Biopharma / Equity Capital Markets

<ul>
<li>YZY is a company that is serious about drug development However, there is actually high R&amp;D risk of its pipeline candidates. So, YZY’s R&amp;D capability has yet to be proven.</li>
<li>There are still many unanswered questions in the whole direction of bispecific antibody. If YZY’s candidates fail to prove better marginal clinical benefits, they won’t have good commercialization performance. </li>
<li>YZY has a long way to go based on its pipeline situation. Considering <a href="https://www.smartkarma.com/entities/wuhan-yzy-biopharma-co-ltd" target="_blank" data-smartkarma-citation="entities:36600:1" rel="noopener">Wuhan YZY Biopharma (YZY HK)</a> has no product in commercialization stage, its valuation may not be high.</li>
</ul>


YZY is a company that is serious about drug development However, there is actually high R&amp;D risk of its pipeline candidates. So, YZY’s R&amp;D capability has yet to be proven.
There are still many unanswered questions in the whole direction of bispecific antibody. If YZY’s candidates fail to prove better marginal clinical benefits, they won’t have good commercialization performance. 
YZY has a long way to go based on its pipeline situation. Considering Wuhan YZY Biopharma (YZY HK) has no product in commercialization stage, its valuation may not be high.


Pre-IPO Wuhan YZY Biopharma - Both R&D and Commercialization Capabilities Have yet to Be Proven

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.

<ul><li>In 1H23, Akeso recorded RMB3.68bn revenue, including RMB795mn from sales of AK104 (PD-1/CTLA-4) and AK105 (PD-1), and RMB2.92bn from license income relevant to AK112 (PD-1/VEGF).</li><li>AK104 achieved RMB606mn sales in 1H23, totalling RMB1.15bn in the past 12 months, which beat the Company’s RMB1bn target during the first 12 months after launch.</li><li>Akeso maintained a high product GP margin at 90.3% in 1H23, compared to 91.5% in 2H22. </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>

In 1H23, Akeso recorded RMB3.68bn revenue, including RMB795mn from sales of AK104 (PD-1/CTLA-4) and AK105 (PD-1), and RMB2.92bn from license income relevant to AK112 (PD-1/VEGF).AK104 achieved RMB606mn sales in 1H23, totalling RMB1.15bn in the past 12 months, which beat the Company’s RMB1bn target during the first 12 months after launch.Akeso maintained a high product GP margin at 90.3% in 1H23, compared to 91.5% in 2H22. 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.

Akeso (9926 HK) – Look Forward to Ph3 Data Readout of AK104 and AK112 in Large Indications

<ul>
<li>9950HK/BGNE: BioNTech signed another ADC from Durality, negative to RemeGen and BeiGene（-）</li>
<li>9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK: National Audit Office's special audit on auditing Guangdong's pharmaceutical consumables showed breadth and depth of the current anti-corruption probe（+/+/-/-/-/-）</li>
<li>BABA/SE:TikTok is in early talks with regulators to obtain a payments license in Indonesia.(-)</li>
</ul>


9950HK/BGNE: BioNTech signed another ADC from Durality, negative to RemeGen and BeiGene（-）
9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK: National Audit Office's special audit on auditing Guangdong's pharmaceutical consumables showed breadth and depth of the current anti-corruption probe（+/+/-/-/-/-）
BABA/SE:TikTok is in early talks with regulators to obtain a payments license in Indonesia.(-)


China/Asian TMT Update-9950HK/BGNE/9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK/BABA/SE-Special Audit

China

Akeso Inc. operates operatesa s a biotech company. The compnay develops treatments and therapies for various types of diseases. Akeso serves cutomers worldwide

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Akeso Biopharma Inc (9926 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

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

Pre-IPO Wuhan YZY Biopharma - Both R&D and Commercialization Capabilities Have yet to Be Proven

YZY passed the hearing of HKEX. We've analyzed its business, pipeline and concerns in this insight. It should be pointed out that investors have...

Xinyao (Criss) Wang

Akeso (9926 HK) – Look Forward to Ph3 Data Readout of AK104 and AK112 in Large Indications

AK104 achieved RMB606mn sales in 1H23, totalling RMB1.15bn in the past 12 months, which beat the Company’s RMB1bn target during the first 12 months...

CMB International

China/Asian TMT Update-9950HK/BGNE/9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK/BABA/SE-Special Audit

9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK: National Audit Office's special audit on auditing Guangdong's pharmaceutical consumables showed breadth and...

Blue Lotus Research Institute

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