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

In our weekly Shanghai/Shenzhen Connect Ideas series, we aim to help our investors understand the flow of northbound trades via the Shanghai and Shenzhen Connect, as analyzed by our proprietary data engine and highlight interesting trade ideas. 
We split the stocks eligible for the Shanghai/Shenzhen Connect trade into two groups: stocks with a market capitalization above USD 5 billion, as well as between USD 1 billion and USD 5 billion. 
In this insight, we will highlight the consecutive two weeks of inflow into the A-share market. We highlight the inflow reversal into <a href="https://www.smartkarma.com/entities/1553" target="_blank" data-smartkarma-citation="entities:1553:1">Kweichow Moutai Co Ltd A (600519 CH),</a> a leading premium hard liquor manufacturer, as well as <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-a" target="_blank" data-smartkarma-citation="entities:846:1">Tsingtao Brewery Co Ltd A (600600 CH)</a>.

In our weekly Shanghai/Shenzhen Connect Ideas series, we aim to help our investors understand the flow of northbound trades via the Shanghai and Shenzhen Connect, as analyzed by our proprietary data engine and highlight interesting trade ideas. 
We split the stocks eligible for the Shanghai/Shenzhen Connect trade into two groups: stocks with a market capitalization above USD 5 billion, as well as between USD 1 billion and USD 5 billion. 
In this insight, we will highlight the consecutive two weeks of inflow into the A-share market. We highlight the inflow reversal into Kweichow Moutai Co Ltd A (600519 CH), a leading premium hard liquor manufacturer, as well as Tsingtao Brewery Co Ltd A (600600 CH).

Shanghai/​Shenzhen Connect Ideas: Moutai Inflows Were Back, Tsingtao Too (2019-06-14)

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

China Resources Pharmaceutical / Equity Bottom-Up

Recall that E-Jiao, a Traditional Chinese Medicine made from donkey skin, is one of <a href="https://www.smartkarma.com/entities/22928" target="_blank" data-smartkarma-citation="entities:22928:1">China Resources Pharmaceutical Group (3320 HK)</a> 's leading products in the manufacturing segment. We estimate that E-Jiao generates about 20% of the segment's revenue and a higher percentage of profits. The manufacturing segment generates roughly 50% of the company's operating profit. The Insight Stream provides background on the company and product.People for the Ethical Treatment of Animals (PETA) started a…

Recall that E-Jiao, a Traditional Chinese Medicine made from donkey skin, is one of China Resources Pharmaceutical Group (3320 HK) 's leading products in the manufacturing segment. We estimate that E-Jiao generates about 20% of the segment's revenue and a higher percentage of profits. The manufacturing segment generates roughly 50% of the company's operating profit. The Insight Stream provides background on the company and product.People for the Ethical Treatment of Animals (PETA) started a…

"Donkey Skin" Rhymes With "Shark Fin" Update

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading product is its E-Jiao series of OTC products that generated HKD5 billion of revenue (only 3% of revenue, but probably around 10% of profits). We noted in our prior Insights on the company that one emerging risk to the story is the increasing shortage of donkeys globally and the potential impact on public opinion.  The South China Morning Post is running an in-depth story on E-Jiao products and their impact on the global donkey herd.  Public outcry over the treatment of donkeys could lead to boycotts, as seen with shark fin soup.

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading product is its E-Jiao series of OTC products that generated HKD5 billion of revenue (only 3% of revenue, but probably around 10% of profits). We noted in our prior Insights on the company that one emerging risk to the story is the increasing shortage of donkeys globally and the potential impact on public opinion.  The South China Morning Post is running an in-depth story on E-Jiao products and their impact on the global donkey herd.  Public outcry over the treatment of donkeys could lead to boycotts, as seen with shark fin soup. 

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Thematic (Sector/Industry)

<ul><li>From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. </li><li>For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.</li><li>Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. </li></ul>

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. 

Equity Capital Markets

China Resources Pharmaceutical / Equity Capital Markets

This Insight follows up on our three prior Insights on the company. Here we discuss our opinion of the offering; additional details from the PHIP; and topics of discussion for the roadshow. We should note that we have not seen a pre-deal report or the roadshow presentation. You should refer to <a href="https://www.smartkarma.com/profiles/673" target="_blank" data-smartkarma-citation="accounts:673">Toh Zhen Zhou</a> 's Insight that reviews the offering using the IPO Analyzer.We are lukewarm on the offering. The company has an interesting position in the pharmaceutical value chain, but has reported only modest organic growth during the Track Record Period.  The proposed valuation appears to reflects this. There is a potential arbitrage opportunity (if in name only) at the lower end of the proposed price range to buy shares of the listed subsidiaries at a discount. <a href="https://www.smartkarma.com/profiles/673" target="_blank" data-smartkarma-citation="accounts:673">Toh Zhen Zhou</a> 's Insight discusses this in detail.

This Insight follows up on our three prior Insights on the company. Here we discuss our opinion of the offering; additional details from the PHIP; and topics of discussion for the roadshow. We should note that we have not seen a pre-deal report or the roadshow presentation. You should refer to Toh Zhen Zhou 's Insight that reviews the offering using the IPO Analyzer.We are lukewarm on the offering. The company has an interesting position in the pharmaceutical value chain, but has reported only modest organic growth during the Track Record Period.  The proposed valuation appears to reflects this. There is a potential arbitrage opportunity (if in name only) at the lower end of the proposed price range to buy shares of the listed subsidiaries at a discount. Toh Zhen Zhou 's Insight discusses this in detail. 

China

Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. manufactures and sells Chinese patent medicine. The Company also wholesales, retails, imports, and exports Western and Chinese pharmaceutical products and various medical apparatus.

Guangzhou Baiyunshan Pharmaceutical Holdings (874 HK)

Guangzhou Baiyunshan Pharmaceutical Holdings

Changchun High & New Technology Industry (Group) Inc. is an investment holding company.  Through its subsidiaries, the Company manufactures biopharmaceuticals and Chinese traditional medicines, constructs infrastructure facilities, manufactures electrolytic condensers, and develops and manages real estate.

Xizang Haisco Pharmaceutical Group Company Limited develops, manufactures and sells drug formulations and active pharmaceutical ingredients. The Company's main products include hepatobiliary disease medication, anti-infective drugs, parenteral nutrition drugs, invert sugar for injection, and other related products.

Xizang Haisco Pharmaceutical Group Co (002653 CH)

Shenzhen Salubris Pharmaceuticals Co., Ltd. develops, manufactures, and distributes pharmaceutical and healthcare products such as tablets, capsules, injection formulations and active pharmaceutical ingredients.

Shenzhen Salubris Pharmaceuticals A (002294 CH)

Kangmei Pharmaceutical Co., Ltd. develops, produces, and sells medicines that are used for the treatment of high blood pressure and cold.  The Company also pr oduces antibiotic drugs and health care products. Kangmei also sells other manufacturers' medical products through its wholesale and retail chain.

Kangmei Pharmaceutical Co Ltd (600518 CH)

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. is a pharmaceutical company. Through its subsidiaries, the Company manufactures genetic medicines, Chinese traditional medicines, diagnostic products, and medical instruments, provides technology, marketing, and advertising services, as well as invests in import and export trading.

Shanghai Fosun Pharmaceutical (Group) (600196 CH)

Humanwell Healthcare (Group) Co., Ltd specializes in the R&D and sales of pharmaceuticals, biotechnology, and chemical products, in addition to the import and export of goods and technology. The company, through its subsidiaries, also operate in real estate development and sales, industrial investment and management, and education projects.

Tianjin Zhongxin Pharmaceutical Group Corporation Limited produces and sells traditional Chinese medicine, western medicine, health products, and healthcare instruments.  The Group also manufactures gene-related biopharmaceutical products.  Tianjin Zhongxin markets its products under the Great Wall, Cypress, and Health brand names.

Tianjin Zhongxin Phrmctl Gp Cp (600329 CH)

Shijiangzhuang Yiling Pharmaceutical Co Ltd develops, produces and sells Chinese patent medicine. The Company's major products include Tongxinluo capsules, Shensongyangxin capsules, Lotus Qingwen capsules, Qili Qiangxin capsules and Bazi Bushen capsules.

Shijiazhuang Yiling Pharmaceutical (002603 CH)

China Resources Pharmaceutical Group Ltd. operates as a pharmaceutical company. The Company researches and develops, manufactures, and distributes pharmaceuticals. China Resources Pharmaceutical Group provides products and services involving chemicals, biologics, health products, medical appliances, and others. 

Perrigo Company PLC is a global healthcare supplier that develops, manufactures, and distributes OTC and generic prescription pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients and pharmaceutical and medical diagnostic products. The Company's primary markets and locations of manufacturing and logistics operations are the US, UK, Mexico, and Australia.

ROHTO PHARMACEUTICAL CO., LTD. manufactures and markets pharmaceuticals and cosmetics products.  The Company's products include eyewash, bath soaps, gastrointestinal medicine, and hand cream.  Rohto Pharmaceutical also has a license agreement with its subsidiary, Mentholatum (US) to sell their brand products.  The Company also manufactures contact lenses and health foods.

PT Kalbe Farma Tbk produces and develops pharmaceutical products for human and animal healthcare.  Through its subsidiaries, the Company also operates in the pharmaceutical, health food, and packaging industries.

Corcept Therapeutics Inc. is a pharmaceutical company that discovers and develops drugs for the treatment of severe metabolic and psychiatric disorders. The Company's lead product modulates the effect of cortisol, also known as the "stress hormone", by selectively blocking the binding of cortisol to one of its two known receptors, the GR-II receptor.

SANTEN PHARMACEUTICAL CO., LTD. produces and sells ophthalmic medicine.  The Company manufactures a variety of products including eye drops and ointments. Santen Pharmaceutical also imports lenses and tools and equipment used by optometrists and produces anti-rheumatic drugs.

Glaxosmithkline Pharmaceuticals Ltd. manufactures and distributes a wide variety of pharmaceutical drugs, veterinary products and laboratory chemicals. The Company's products include "Phexin" capsules, "Betnesol" tablets and injections, "Becoride" asthma treatment, "Betnovate" ointment, "Cetzine" antihistamine, "Zucox" and "Rizap" anti-tuberculosis products.

Glaxosmithkline Pharmaceuticals (GLXO IN)

Ajanta Pharma Limited is a pharmaceutical company involved in the areas of product research, manufacturing, and marketing. The Company's manufacturing capabilities include segments such as antiretrovirals, antimalarials, cardiovascular, dermatology, and ophthalmology. The Company also markets over the counter products that include some nature-based remedies.

Glenmark Pharmaceuticals Ltd., is a pharmaceutical company. The Company develops generic drugs for inflammation, metabolic disorders, and pain.

Yuhan Corporation manufactures and markets various pharmaceutical products on its own and through joint ventures with other global pharmaceutical companies. The Company also produces personal care products, dietary supplements, and veterinary medicines.

Prestige Brands Holdings, Inc. distributes over-the-counter healthcare and household cleaning products to retail stores in the United States, Canada and other international markets.  The Company distributes oral, eye and skin care; cough, cold, allergy and sinus; and household cleansers, sponges, scrubbers and cleaning pads.

Dong-E-E-Jiao Co., Ltd. primarily manufactures and sells traditional Chinese medicine, health care products, health foods, and bio-medicine. The company also engages in gelatin products manufacturing.

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Dong E E Jiaoco Ltd A (000423 CH)

Shanghai/Shenzhen Connect Ideas: Moutai Inflows Were Back, Tsingtao Too (2019-06-14)

In our weekly Shanghai/Shenzhen Connect Ideas series, we aim to help our investors understand the flow of northbound trades via the Shanghai and...

Ke Yan, CFA, FRM

"Donkey Skin" Rhymes With "Shark Fin" Update

Recall that E-Jiao, a Traditional Chinese Medicine made from donkey skin, is one of China Resources Pharmaceutical Group (3320 HK) 's leading...

Kemp Dolliver, CFA

"Donkey Skin" Rhymes With "Shark Fin"

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading...

Kemp Dolliver, CFA

Key Drivers of Asia's Healthcare Sector

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and...

Singapore Exchange Ltd (SGX)

CR Pharma: New Details, Final Thoughts

This Insight follows up on our three prior Insights on the company. Here we discuss our opinion of the offering; additional details from the PHIP;...

Kemp Dolliver, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shanghai/​Shenzhen Connect Ideas: Moutai Inflows Were Back, Tsingtao Too (2019-06-14)

In our weekly Shanghai/Shenzhen Connect Ideas series, we aim to help our investors understand the flow of northbound trades via the Shanghai and...

Ke Yan, CFA, FRM

"Donkey Skin" Rhymes With "Shark Fin" Update

Recall that E-Jiao, a Traditional Chinese Medicine made from donkey skin, is one of China Resources Pharmaceutical Group (3320 HK) 's leading...

Kemp Dolliver, CFA

"Donkey Skin" Rhymes With "Shark Fin"

China Resources Pharmaceutical (3320 HK) is an integrated manufacturer, distributor, and retailer of pharmaceutical products. The company's leading...

Kemp Dolliver, CFA

Key Drivers of Asia's Healthcare Sector

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and...

Singapore Exchange Ltd (SGX)

CR Pharma: New Details, Final Thoughts

This Insight follows up on our three prior Insights on the company. Here we discuss our opinion of the offering; additional details from the PHIP;...

Kemp Dolliver, CFA

Shanghai/Shenzhen Connect Ideas: Moutai Inflows Were Back, Tsingtao Too (2019-06-14)