HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The 2022 NRDL negotiation results were released. We analyzed some points worth investor's attention.</li>
<li>The "safety pad" brought by medical insurance is difficult to ensure products future sales.Even after entering NRDL, how to improve patient/doctor coverage is an important problem for enterprises to consider.</li>
<li>Here are some companies that investors are interested in. We mainly analyzed some key points of them, including <a href="https://www.smartkarma.com/entities/sirnaomics-inc" target="_blank" data-smartkarma-citation="entities:33804:1" rel="noopener">Sirnaomics (2257 HK)</a>, <a href="https://www.smartkarma.com/entities/jw-therapeutics" target="_blank" data-smartkarma-citation="entities:29679:1" rel="noopener">JW Therapeutics (2126 HK)</a>, <a href="https://www.smartkarma.com/entities/antengene-corp-ltd" target="_blank" data-smartkarma-citation="entities:29705:1" rel="noopener">Antengene (6996 HK)</a>. </li>
</ul>


The 2022 NRDL negotiation results were released. We analyzed some points worth investor's attention.
The "safety pad" brought by medical insurance is difficult to ensure products future sales.Even after entering NRDL, how to improve patient/doctor coverage is an important problem for enterprises to consider.
Here are some companies that investors are interested in. We mainly analyzed some key points of them, including Sirnaomics (2257 HK), JW Therapeutics (2126 HK), Antengene (6996 HK). 


China Healthcare Weekly (Jan.20) - NRDL Negotiation Results, JW Therapeutics, Sirnaomics, Antengene

Shanghai Junshi Biosciences  / Equity Bottom-Up

<ul>
<li>Junshi once generated sales and profits in scale, but lost money again. Its story suddenly changed from cancer drugs to COVID-19. We have lost sight of its development direction.</li>
<li>Junshi's commercialization history has lost its reference value for confirming the outlook. The calculation of peak sales doesn’t make much sense, because they cannot help Junshi turn losses into profits.</li>
<li>The current market value still has too much “bubble”, and COVID-19 drug is a major “interference” to the valuation. We analyzed our thoughts on future valuation by excluding COVID-19 projects.  </li>
</ul>


Junshi once generated sales and profits in scale, but lost money again. Its story suddenly changed from cancer drugs to COVID-19. We have lost sight of its development direction.
Junshi's commercialization history has lost its reference value for confirming the outlook. The calculation of peak sales doesn’t make much sense, because they cannot help Junshi turn losses into profits.
The current market value still has too much “bubble”, and COVID-19 drug is a major “interference” to the valuation. We analyzed our thoughts on future valuation by excluding COVID-19 projects.  


Shanghai Junshi Bioscience (1877.HK/688180.CH)- Junshi Has Changed Its Story from Tumor to COVID-19?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>End December was the end of the review cutoff for a lot of indices that will rebalance within the next couple of months.</li>
<li>
<a href="https://www.smartkarma.com/entities/pexa-group-ltd" target="_blank" data-smartkarma-citation="entities:34716:1" rel="noopener">PEXA Group (PXA AU)</a> replaces <a href="https://www.smartkarma.com/entities/pendal-group-ltd" target="_blank" data-smartkarma-citation="entities:15795:1" rel="noopener">Pendal Group (PDL AU)</a> in the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> at the close on 12 January.</li>
<li>There were big outflows from Hong Kong and China focused ETFs led by <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF (2828 HK)</a> and <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong Ltd (2800 HK)</a>.</li>
</ul>


End December was the end of the review cutoff for a lot of indices that will rebalance within the next couple of months.

PEXA Group (PXA AU) replaces Pendal Group (PDL AU) in the S&amp;P/ASX 200 (AS51 INDEX) at the close on 12 January.
There were big outflows from Hong Kong and China focused ETFs led by Hang Seng H Share Index ETF (2828 HK) and Tracker Fund of Hong Kong Ltd (2800 HK).


Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, HSI, HSCI, KS200, KQ150, CSI300, SENSEX, LQ45, PSEi

Thematic (Sector/Industry)

<ul>
<li>This year's NRDL negotiations could be a turnaround. If the final result really shows a moderate price decline, it will be “a landmark event” for the innovative drug industry.</li>
<li>Starting from 23Q2, with the peak of respiratory disease/COVID-19 outbreak past, the demand for related TCM would weaken. Then, the pullback of TCM would really begin.</li>
<li>Even if biotech initially tells the story of becoming a biopharma to obtain financing, it will not be realized in the end.</li>
</ul>


This year's NRDL negotiations could be a turnaround. If the final result really shows a moderate price decline, it will be “a landmark event” for the innovative drug industry.
Starting from 23Q2, with the peak of respiratory disease/COVID-19 outbreak past, the demand for related TCM would weaken. Then, the pullback of TCM would really begin.
Even if biotech initially tells the story of becoming a biopharma to obtain financing, it will not be realized in the end.


China Healthcare Weekly (Jan.1) - NRDL Negotiation Turnaround, Pullback of TCM, Biotech Sales System

Equity Capital Markets

Shandong BoAn Biotechnology  / Equity Capital Markets

<ul>
<li>Without the advantages in product efficacy, production capacity, clinical progress and speed of approval, Boan's products have lost their pricing power in both China and overseas markets.</li>
<li>Due to the lack of differentiation and frontier enough target layout, the product commercialization potential is bound to be more easily questioned, with limited value in the long term.</li>
<li>Even if Boan could go public successfully, investors may not be able to achieve the expected returns because of the unfriendly market sentiment and a lack of liquidity in HKEX. </li>
</ul>


Without the advantages in product efficacy, production capacity, clinical progress and speed of approval, Boan's products have lost their pricing power in both China and overseas markets.
Due to the lack of differentiation and frontier enough target layout, the product commercialization potential is bound to be more easily questioned, with limited value in the long term.
Even if Boan could go public successfully, investors may not be able to achieve the expected returns because of the unfriendly market sentiment and a lack of liquidity in HKEX. 


Pre-IPO Shandong Boan Biotechnology - Conservative About the Outlook

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)

China Healthcare Weekly (Jan.20) - NRDL Negotiation Results, JW Therapeutics, Sirnaomics, Antengene

We analyzed 2022 NRDL negotiation result - There're positive sides.The "safety pad" brought by medical insurance coverage may not be high.We...

Xinyao (Criss) Wang

Shanghai Junshi Bioscience (1877.HK/688180.CH)- Junshi Has Changed Its Story from Tumor to COVID-19?

After Junshi's story changed from tumor to COVID-19, we've lost sight of its future direction.The pipeline can't help Junshi turn loss into...

Xinyao (Criss) Wang

Index Rebalance & ETF Flow Recap: HSCEI, HSTECH, HSI, HSCI, KS200, KQ150, CSI300, SENSEX, LQ45, PSEi

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

China Healthcare Weekly (Jan.1) - NRDL Negotiation Turnaround, Pullback of TCM, Biotech Sales System

This year's NRDL negotiation could be “a landmark event” for innovative drug industry.Pullback of TCM may really begin from 23Q2.We analyzed...

Xinyao (Criss) Wang

Pre-IPO Shandong Boan Biotechnology - Conservative About the Outlook

Due to lack of differentiated/frontier enough target layout and slow progress, Boan's product commercialization potential is highly uncertain....

Xinyao (Criss) Wang

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