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

Alibaba Group Holding  / Equity Capital Markets

<ul>
<li>On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.</li>
<li>On 8th Mar 2022, Securities Exchange Commission (SEC) had added five China ADR names to its provisional list of issuers under HFCAA, which set the clock ticking for their delisting.</li>
<li>In this note, we'll talk about the latest developments and its implications.</li>
</ul>


On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.
On 8th Mar 2022, Securities Exchange Commission (SEC) had added five China ADR names to its provisional list of issuers under HFCAA, which set the clock ticking for their delisting.
In this note, we'll talk about the latest developments and its implications.


China ADRs Delisting - Tide Is Turning with CSRC Showing Signs of a Compromise

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Shanghai Junshi Biosciences  / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-junshi-bioscience-h" target="_blank" data-smartkarma-citation="entities:27760:1" rel="noopener">Shanghai Junshi Bioscience Co. Ltd. (1877 HK)'s</a> oncology drug candidate toripalimab marketing application is currently under priority review by the FDA, with a target action date of April 30, 2022.</li>
<li>However, FDA may reject toripalimab application, as it is predominantly based on China clinical trial data. Toripalimab may also face delay in FDA decision due to delayed regulatory inspection.</li>
<li>PD-1 drug market in the U.S. is intensely competitive, making the commercialization prospect of a new drug quite difficult. Toripalimab reported muted performance in China due to pricing headwind.</li>
</ul>



Shanghai Junshi Bioscience Co. Ltd. (1877 HK)'s oncology drug candidate toripalimab marketing application is currently under priority review by the FDA, with a target action date of April 30, 2022.
However, FDA may reject toripalimab application, as it is predominantly based on China clinical trial data. Toripalimab may also face delay in FDA decision due to delayed regulatory inspection.
PD-1 drug market in the U.S. is intensely competitive, making the commercialization prospect of a new drug quite difficult. Toripalimab reported muted performance in China due to pricing headwind.


Shanghai Junshi Bioscience (1877 HK): Uncertainties Prevailing Ahead of First U.S. Drug Approval

<ul>
<li>
<a href="https://www.smartkarma.com/entities/abbvie-inc" target="_blank" data-smartkarma-citation="entities:1135:1" rel="noopener">Abbvie Inc (ABBV US)</a> shares remained rangebound in 2021, mainly due to Humira patent expiration overhang. Humira is the flagship drug of the company, accounting for 37% of total revenue.</li>
<li>Increasing label expansion of its two other drugs, Skyrizi and Rinvoq are now increasingly opening up new growth avenues for AbbVie. Together these drugs contributed 8% to total revenue.</li>
<li>Attractive valuation and healthy dividend yield make AbbVie a top value investment idea amid this turbulent time.</li>
</ul>



Abbvie Inc (ABBV US) shares remained rangebound in 2021, mainly due to Humira patent expiration overhang. Humira is the flagship drug of the company, accounting for 37% of total revenue.
Increasing label expansion of its two other drugs, Skyrizi and Rinvoq are now increasingly opening up new growth avenues for AbbVie. Together these drugs contributed 8% to total revenue.
Attractive valuation and healthy dividend yield make AbbVie a top value investment idea amid this turbulent time.


AbbVie Inc (ABBV US): Great Value Stock to Buy in Choppy Market

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>If we take a close look at the HFCAA, there are three points that are really hard for China to accept, which could be an irreconcilable contradiction.</li>
<li>There could be a trend of delisting from the US market and then relisting on HKEX or A-share market in the future. Investors could suffer losses when companies come back.</li>
<li>Overall, the regulatory risk and delisting risk are two real unknowns. Therefore, investors should pay attention to the relevant companies and get prepared in advance.</li>
</ul>


If we take a close look at the HFCAA, there are three points that are really hard for China to accept, which could be an irreconcilable contradiction.
There could be a trend of delisting from the US market and then relisting on HKEX or A-share market in the future. Investors could suffer losses when companies come back.
Overall, the regulatory risk and delisting risk are two real unknowns. Therefore, investors should pay attention to the relevant companies and get prepared in advance.


The Impact of HFCAA on China ADR (China Healthcare Companies)

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

KraneShares CSI China Internet ETF / Event-Driven

<ul>
<li>China ADRs were sharply lower last week as the SEC started to name companies that were identified under the Holding Foreign Companies Accountable Act (HFCAA).</li>
<li>Then <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global</a> dropped 44% on Friday following reports that the their proposals to prevent data/security leaks did not meet CAC's requirements and work on the HK listing was halted.</li>
<li>With 2024 not too far away, a lot of the U.S. listed companies will look at listing in Hong Kong in the near future. That will have its own implications.</li>
</ul>


China ADRs were sharply lower last week as the SEC started to name companies that were identified under the Holding Foreign Companies Accountable Act (HFCAA).
Then DiDi Global dropped 44% on Friday following reports that the their proposals to prevent data/security leaks did not meet CAC's requirements and work on the HK listing was halted.
With 2024 not too far away, a lot of the U.S. listed companies will look at listing in Hong Kong in the near future. That will have its own implications.


China ADRs & HFCAA: Pace of Homecoming Listings Should Pick Up & Implications

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 ADRs Delisting - Tide Is Turning with CSRC Showing Signs of a Compromise

On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas...

Sumeet Singh

Shanghai Junshi Bioscience (1877 HK): Uncertainties Prevailing Ahead of First U.S. Drug Approval

Going by the FDA’s recent action, Junshi Bioscience’s toripalimab has a chance to get rejected by the FDA. It may miss the approval timeline....

Tina Banerjee

AbbVie Inc (ABBV US): Great Value Stock to Buy in Choppy Market

Abbvie’s reducing dependence on Humira, visibility on non-Humira portfolio, coupled with high dividend yield and attractive valuation make it a top...

Tina Banerjee

The Impact of HFCAA on China ADR (China Healthcare Companies)

We analyzed the points in HFCAA that are difficult for China to accept.Such irreconcilable contradiction could lead to a trend of delisting from...

Xinyao (Criss) Wang

China ADRs & HFCAA: Pace of Homecoming Listings Should Pick Up & Implications

The SEC naming 5 companies under the HFCAA put China ADRs under pressure last week. The news that the CAC had nixed DIDI's HK listing plans added...

Brian Freitas

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