HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Based on our analysis, the growth rate of China's drug spending is linked to GDP, and it would not be a high growth rate, but a stable growth rate.</li>
<li>The logic behind China and US biotech companies is different. To some extent, the lower the domestic biotech’s share price, the greater the risk.</li>
<li>In the current policy environment, the risks of VBP on anesthetics could be low because of their high barriers, strict control and potential social risks.</li>
</ul>


Based on our analysis, the growth rate of China's drug spending is linked to GDP, and it would not be a high growth rate, but a stable growth rate.
The logic behind China and US biotech companies is different. To some extent, the lower the domestic biotech’s share price, the greater the risk.
In the current policy environment, the risks of VBP on anesthetics could be low because of their high barriers, strict control and potential social risks.


China Healthcare Weekly (Jan.7)-China's Drug Spending,Logic Behind China/US Biotech, Anesthetics VBP

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 analyzed the latest HK SFC report for aggregate short position as of Dec 24.</li>
<li>Top short increases and decreases were tabulated for one week and four week period.</li>
<li>We highlight short interest increases in GCL-Poly, XPeng, and Beigene.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Dec 24.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short interest increases in GCL-Poly, XPeng, and Beigene.


HK Short Interest: GCL-Poly, XPeng, Beigene

Equity Bottom-Up

<ul>
<li>With both strong innovation and internationalization capability, Lifetech is more resistant to risks and have greater development space and long-term value, which is not common in China healthcare industry. </li>
<li>The biggest concerns currently are the policy risks and the potential deterioration of international relations.</li>
<li>But overall, Lifetech is a still company worth investor’s attention. Our view is that its future valuation would be higher than that of <a href="https://www.smartkarma.com/entities/shanghai-microport-endovas-a" target="_blank" data-smartkarma-citation="entities:30310:1" rel="noopener">Shanghai Microport Endovascular MedTech (688016 CH)</a>.</li>
</ul>


With both strong innovation and internationalization capability, Lifetech is more resistant to risks and have greater development space and long-term value, which is not common in China healthcare industry. 
The biggest concerns currently are the policy risks and the potential deterioration of international relations.
But overall, Lifetech is a still company worth investor’s attention. Our view is that its future valuation would be higher than that of Shanghai Microport Endovascular MedTech (688016 CH).


Lifetech Scientific (1302.HK) - A “dark Horse” in China Innovative Device Industry

<ul>
<li>The “capital arbitrage” in domestic innovative drug industry would not be sustainable.</li>
<li>Based on data, the sales and profits of innovative drugs at present can hardly support the current valuation of pharmaceutical companies (or recover the high cost of license-in deals).</li>
<li>However, we are still highly bullish on China healthcare industry if seen from the <strong>big picture</strong>.</li>
</ul>


The “capital arbitrage” in domestic innovative drug industry would not be sustainable.
Based on data, the sales and profits of innovative drugs at present can hardly support the current valuation of pharmaceutical companies (or recover the high cost of license-in deals).
However, we are still highly bullish on China healthcare industry if seen from the big picture.


China Healthcare Weekly (Dec.24)- Capital Arbitrage, Drug Commercial Results, Healthcare Big Picture

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zai-lab-ltd" target="_blank" data-smartkarma-citation="entities:25877:1" rel="noopener">Zai Lab Ltd (ZLAB US)</a> is famous for its license-in mode, but the biggest highlight is its strong vision and high success rate in the process, forming a distinctive pipeline.</li>
<li>The concerns such as the changes of pattern in license-in mode, attitude of the regulatory authorities, fierce competition and commercialization outlook also deserve attention.</li>
<li>Investing a company is actually investing in its people. We have confidence that Zai Lab would find its way out.</li>
</ul>



Zai Lab Ltd (ZLAB US) is famous for its license-in mode, but the biggest highlight is its strong vision and high success rate in the process, forming a distinctive pipeline.
The concerns such as the changes of pattern in license-in mode, attitude of the regulatory authorities, fierce competition and commercialization outlook also deserve attention.
Investing a company is actually investing in its people. We have confidence that Zai Lab would find its way out.


Zai Lab Ltd (ZLAB.US) - The Strength and the Concerns

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.

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

BeiGene (6160 HK)

China Healthcare Weekly (Jan.7)-China's Drug Spending,Logic Behind China/US Biotech, Anesthetics VBP

The insight mainly analyzed the relationship of drug spending with GDP growth, different logic behind China/US biotech companies and related risks...

Xinyao (Criss) Wang

HK Short Interest: GCL-Poly, XPeng, Beigene

We highlight week-on-week short interest increases in GCL-Poly (3800 HK), XPeng (9868 HK), and Beigene (6160 HK) in the latest HK SFC short...

Ke Yan, CFA, FRM

Lifetech Scientific (1302.HK) - A “dark Horse” in China Innovative Device Industry

This insight analyzed Lifetech in terms of its three main product lines, the growth points and the outlook in the future, short-term catalysts and...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.24)- Capital Arbitrage, Drug Commercial Results, Healthcare Big Picture

This insight analyzed the concerns on capital arbitrage in domestic innovative drugs, the unsatisfactory innovative drug commercial results,...

Xinyao (Criss) Wang

Zai Lab Ltd (ZLAB.US) - The Strength and the Concerns

This insight analyzes Zai Lab about its distinctive pipeline, the management team, the concerns on license-in mode, regulatory...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)