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 analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 120.6% as of Jul 7th.</li>
<li>The average A-H premium changed by 5.9ppt week on week, led by consumer staples, consumer discretionary, energy.</li>
<li>We highlight weekly changes in A-H premium for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan, Yankuang Energy, New China Life.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 120.6% as of Jul 7th.
The average A-H premium changed by 5.9ppt week on week, led by consumer staples, consumer discretionary, energy.
We highlight weekly changes in A-H premium for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan, Yankuang Energy, New China Life.


A-H Premium Weekly (Jul 7th): BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Guangzhou Baiyunshan Pharmaceu / Equity Bottom-Up

<ul>
<li>Baiyunshan is not a typical TCM company. As Great Commerce accounts for the majority of revenue, it clearly drags down the quality of total assets and growth expectation for valuation.</li>
<li>As Jin Ge and Wang Lao Ji are facing different challenges, the overall growth/profitability of Baiyunshan is under pressure.Due to uncompetitive product line, Baiyunshan’s future growth appears to lack momentum.</li>
<li>The valuation of Baiyunshan-A share is still expensive, but Baiyunshan-H share is attractive. After all, the future consumption recovery would be beneficial for boosting Baiyunshan’s valuation. Then, trading opportunity occurs. </li>
</ul>


Baiyunshan is not a typical TCM company. As Great Commerce accounts for the majority of revenue, it clearly drags down the quality of total assets and growth expectation for valuation.
As Jin Ge and Wang Lao Ji are facing different challenges, the overall growth/profitability of Baiyunshan is under pressure.Due to uncompetitive product line, Baiyunshan’s future growth appears to lack momentum.
The valuation of Baiyunshan-A share is still expensive, but Baiyunshan-H share is attractive. After all, the future consumption recovery would be beneficial for boosting Baiyunshan’s valuation. Then, trading opportunity occurs. 


Guangzhou Baiyunshan Pharmaceutical (874.HK) - When Valuation Is Low Enough, Drawbacks Are Tolerable

<ul>
<li>The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.</li>
<li>CDE will move closer to the FDA's standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.</li>
<li>We analyzed some key points about <a href="https://www.smartkarma.com/entities/hua-medicine" target="_blank" data-smartkarma-citation="entities:27410:1" rel="noopener">Hua Medicine Ltd (2552 HK)</a>. We think its core drug Dorzagliatin still has many uncertainties that are worth investors' attention.</li>
</ul>


The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.
CDE will move closer to the FDA's standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.
We analyzed some key points about Hua Medicine Ltd (2552 HK). We think its core drug Dorzagliatin still has many uncertainties that are worth investors' attention.


China Healthcare Weekly (Jun.23) - National TCM VBP Results, CDE Changes Game Rule, Hua Medicine

Thematic (Sector/Industry)

<ul>
<li>Policies will determine the development direction of the industry, which would then determine the profit model of companies. Companies that align with policy direction would outperform in the coming cycle.</li>
<li>The prosperity of the industry would determine the development trend of companies. For China healthcare, without a significant policy shift, it would be difficult for industry beta to emerge.</li>
<li>Domestic companies cannot achieve successful commercialization/internationalization mainly because they don’t have excellent enough products. It must be innovation that keeps companies alive and then thrive, rather than relying on policy changes.</li>
</ul>


Policies will determine the development direction of the industry, which would then determine the profit model of companies. Companies that align with policy direction would outperform in the coming cycle.
The prosperity of the industry would determine the development trend of companies. For China healthcare, without a significant policy shift, it would be difficult for industry beta to emerge.
Domestic companies cannot achieve successful commercialization/internationalization mainly because they don’t have excellent enough products. It must be innovation that keeps companies alive and then thrive, rather than relying on policy changes.


The Cyclicality of China Healthcare - Policy Environment, the Industry, and Investment Opportunities

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 113.6% as of May 26th.</li>
<li>The average A-H premium changed by 2.3ppt week on week, led by information technology, utilities, consumer discretionary and offset by financials.</li>
<li>We highlight weekly changes in A-H premium for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng, CSSC Offshore, Shanghai Fudan, China Life, Flat Glass, CCCC.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 113.6% as of May 26th.
The average A-H premium changed by 2.3ppt week on week, led by information technology, utilities, consumer discretionary and offset by financials.
We highlight weekly changes in A-H premium for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng, CSSC Offshore, Shanghai Fudan, China Life, Flat Glass, CCCC.


A-H Premium Weekly (May 26th): Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng

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 Pharmaceu (600332 CH)

Price Gauge
52-week Range	0.00 - 0.00
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Guangzhou Baiyunshan Pharmaceu (600332 CH)

A-H Premium Weekly (Jul 7th): BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan

We analyzed A-H premium changes in the past week and highlight A-H premium changes for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan,...

Ke Yan, CFA, FRM

Guangzhou Baiyunshan Pharmaceutical (874.HK) - When Valuation Is Low Enough, Drawbacks Are Tolerable

Due to the special "positioning" of Baiyunshan's business, the market's enthusiasm for the company is not high. But when its valuation is low...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun.23) - National TCM VBP Results, CDE Changes Game Rule, Hua Medicine

Results of National TCM VBP were released, involving some big varieties. CDE changes game rule on drug approva. Companies has to change clinical...

Xinyao (Criss) Wang

The Cyclicality of China Healthcare - Policy Environment, the Industry, and Investment Opportunities

Without industry beta, China healthcare companies still have opportunity to achieve countercyclical breakthrough.Investors need to be in line with...

Xinyao (Criss) Wang

A-H Premium Weekly (May 26th): Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)