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.

Equity Capital Markets

Jiangsu Recbio Technology / Equity Capital Markets

<ul>
<li>RecBio is an innovative vaccine company with a focus on HPV vaccines. The company is pre-marketing its USD 100-200 million Hong Kong listing.</li>
<li>In the previous note, we looked at the company's core products, including its HPV portfolio and the COVID-19 vaccine. Though not impressive, it does provide exposure to China HPV market. </li>
<li>In this insight, we provide our thoughts on valuation, including key assumptions.</li>
</ul>


RecBio is an innovative vaccine company with a focus on HPV vaccines. The company is pre-marketing its USD 100-200 million Hong Kong listing.
In the previous note, we looked at the company's core products, including its HPV portfolio and the COVID-19 vaccine. Though not impressive, it does provide exposure to China HPV market. 
In this insight, we provide our thoughts on valuation, including key assumptions.


RecBio (江苏瑞科) Pre-IPO:  Thoughts on Valuation

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The main performance contributor in 2021 was CanSino’s COVID-19 vaccine.However, the high vaccination rates, new alternatives (e.g. oral COVID-19 pills) and concerns on capacity make the future sales highly uncertain.</li>
<li>The commercialization performance of MCV2 and MCV4 would largely determine when CanSino could truly shift to relying on conventional vaccine business rather than COVID-19 vaccine to contribute performance.</li>
<li>Objectively speaking, CanSino’s pipeline, R&amp;D capability and technology platforms do have advantages and investment value.</li>
</ul>


The main performance contributor in 2021 was CanSino’s COVID-19 vaccine.However, the high vaccination rates, new alternatives (e.g. oral COVID-19 pills) and concerns on capacity make the future sales highly uncertain.
The commercialization performance of MCV2 and MCV4 would largely determine when CanSino could truly shift to relying on conventional vaccine business rather than COVID-19 vaccine to contribute performance.
Objectively speaking, CanSino’s pipeline, R&amp;D capability and technology platforms do have advantages and investment value.


CanSino Biologics (6185.HK/688185.CH) - Still Have Investment Value

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

China Yangtze Power Co, Ltd. / Event-Driven

<ul>
<li>There are 5 changes to the <a href="https://www.smartkarma.com/entities/shanghai-stock-exchange-sse-50-a-share-index" target="_blank" data-smartkarma-citation="entities:31073:1" rel="noopener">SSE50 Index (SSE50 INDEX)</a> as a part of the December rebalance. One-way turnover is 6% and the one-way trade is CNY 3.3bn.</li>
<li>There is same way flow on <a href="https://www.smartkarma.com/entities/zhangzhou-pientzehuang-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:15709:1" rel="noopener">Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)</a>, <a href="https://www.smartkarma.com/entities/china-telecom-corp-ltd" target="_blank" data-smartkarma-citation="entities:34045:1" rel="noopener">China Telecom (601728 CH)</a> and <a href="https://www.smartkarma.com/entities/sanan-optoelectronics-co-ltd" target="_blank" data-smartkarma-citation="entities:4436:1" rel="noopener">Sanan Optoelectronics Co (600703 CH)</a> around the time of the SSE50 inclusion.</li>
<li>With active futures contracts traded on the CFFEX, there will be cash and carry positions and the rebalancing could add to the impact on the inclusions and exclusions.</li>
</ul>


There are 5 changes to the SSE50 Index (SSE50 INDEX) as a part of the December rebalance. One-way turnover is 6% and the one-way trade is CNY 3.3bn.
There is same way flow on Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH), China Telecom (601728 CH) and Sanan Optoelectronics Co (600703 CH) around the time of the SSE50 inclusion.
With active futures contracts traded on the CFFEX, there will be cash and carry positions and the rebalancing could add to the impact on the inclusions and exclusions.


SSE50 Index Rebalance: 5 Changes and Same Way Index Flow

Chongqing Zhifei Biological Products / Equity Bottom-Up

After hitting a record high of RMB230.69/share in May this year, <a href="https://www.smartkarma.com/entities/chongqing-zhifei-biological-products-co-ltd" target="_blank" data-smartkarma-citation="entities:6245:1" rel="noopener">Chongqing Zhifei Biological Products (300122 CH)</a>'s share price fell nearly 35% and closed at RMB150.20/share as of Oct. 29, 2021. Meanwhile, last week, Zhifei released its 2021Q3 results. The revenue was RMB21.829 billion, up 98% YoY, and net profit was RMB8.404 billion, up 239% YoY, indicating that the Company kept strong growth momentum. However, compared with 2021Q2, the revenue and net profit attributed to shareholders in Q3 single quarter was decreased by 6.3% and 36%, respectively. This insight mainly analyzed some concerns behind the high growth of Zhifei.

After hitting a record high of RMB230.69/share in May this year, Chongqing Zhifei Biological Products (300122 CH)'s share price fell nearly 35% and closed at RMB150.20/share as of Oct. 29, 2021. Meanwhile, last week, Zhifei released its 2021Q3 results. The revenue was RMB21.829 billion, up 98% YoY, and net profit was RMB8.404 billion, up 239% YoY, indicating that the Company kept strong growth momentum. However, compared with 2021Q2, the revenue and net profit attributed to shareholders in Q3 single quarter was decreased by 6.3% and 36%, respectively. This insight mainly analyzed some concerns behind the high growth of Zhifei.  

Chongqing Zhifei Biological Products (300122.CH) 2021Q3 - Concerns Behind the High Growth

Clover Biopharmaceuticals / Equity Capital Markets

Clover, a China-based clinical-stage biotech company, plans to raise up to USD 300m via a Hong Kong listing.
The company developed a trimer tag platform that makes use of the human collagen to trimerize targeted protein with an expected favorable safety profile. The company has completed a Phase 2/3 clinical trial for the COVID-19 vaccine (SCB-2019) which will be the main revenue driver for the company in the next two years as it will supply vaccines through the COVAX program. We also look at its two clinical-stage candidates, namely SCB-313 and SCB-808. 
We also look at the profile of the company's pre-IPO investors and the management. We think the company is interesting and investors should follow the deal.

Clover, a China-based clinical-stage biotech company, plans to raise up to USD 300m via a Hong Kong listing.
The company developed a trimer tag platform that makes use of the human collagen to trimerize targeted protein with an expected favorable safety profile. The company has completed a Phase 2/3 clinical trial for the COVID-19 vaccine (SCB-2019) which will be the main revenue driver for the company in the next two years as it will supply vaccines through the COVAX program. We also look at its two clinical-stage candidates, namely SCB-313 and SCB-808. 
We also look at the profile of the company's pre-IPO investors and the management. We think the company is interesting and investors should follow the deal.

Clover (三叶草生物) Pre-IPO: COVID-19 Wildcard

China

Chongqing Zhifei Biological Products Company Ltd. researches, manufactures, and sells vaccines and biological products including prevention products, blood products, diagnostic reagents, and therapeutic agents.

Chongqing Zhifei Biological Products (300122 CH)

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52-week Range	0.00 - 0.00
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Chongqing Zhifei Biological Products (300122 CH)

RecBio (江苏瑞科) Pre-IPO: Thoughts on Valuation

Recbio is pre-marketing its USD 100-200m Hong Kong IPO. In this insight, we provide our thoughts on valuation for the company.

Ke Yan, CFA, FRM

CanSino Biologics (6185.HK/688185.CH) - Still Have Investment Value

We analyzed our concerns on the uncertain outlook of COVID-19 vaccine and MCV2/MCV4 commercialization performance.But CanSino still has investment...

Xinyao (Criss) Wang

SSE50 Index Rebalance: 5 Changes and Same Way Index Flow

There are 5 changes to the SSE50 Index at the Dec rebalance and there are stocks that have over 1.5 days of ADV to trade. With CFFEX traded futures...

Brian Freitas