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 analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outflows, and holding by mainland investors.</li>
<li>We highlight inflows into Meituan, CCB, China Mobile, CNOOC, HKEX.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outflows, and holding by mainland investors.
We highlight inflows into Meituan, CCB, China Mobile, CNOOC, HKEX.


Hong Kong Connect Flows (August): $8.8bn Outflows

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Jinxin Fertility Group  / Equity Bottom-Up

<ul>
<li>China has started taking measures to optimize fertility policies. The inclusion of assisted reproduction technologies in medical insurance is a general trend, which would generate increasing demand in the future.</li>
<li>From the current domestic assisted reproductive industry chain, there is significant import substitution space and growth potential in the fields of related drugs, prenatal/newborn genetic testing, and downstream medical services.</li>
<li>Companies such as Livzon/BGI/Jinxin would be the direct beneficiaries of related policy. We analyzed the industry characteristics, investment rationale, key risks and comparison with peers of these companies. </li>
</ul>


China has started taking measures to optimize fertility policies. The inclusion of assisted reproduction technologies in medical insurance is a general trend, which would generate increasing demand in the future.
From the current domestic assisted reproductive industry chain, there is significant import substitution space and growth potential in the fields of related drugs, prenatal/newborn genetic testing, and downstream medical services.
Companies such as Livzon/BGI/Jinxin would be the direct beneficiaries of related policy. We analyzed the industry characteristics, investment rationale, key risks and comparison with peers of these companies. 


China Population Policies Impact on Healthcare Companies Series - Part 1

Equity Capital Markets

Deshengtang Pharmaceutical Co Ltd / Equity Capital Markets

<ul>
<li>Due to COVID-19, the consumption pattern of customers has changed.The rapid development period of pharmacies is coming to an end and the industry has entered a new era of integration.</li>
<li>The essence of Deshengtang's business model is more like traditional retail offline pharmacies, relying heavily on selling drugs. The Company's healthy gross margin gives hope for an early turnaround. </li>
<li>However, no matter from which field to seek expansion, Deshengtang would encounter strong competitors.It remains to see if Deshengtang can survive in the industry rather than be acquired by competitors.</li>
</ul>


Due to COVID-19, the consumption pattern of customers has changed.The rapid development period of pharmacies is coming to an end and the industry has entered a new era of integration.
The essence of Deshengtang's business model is more like traditional retail offline pharmacies, relying heavily on selling drugs. The Company's healthy gross margin gives hope for an early turnaround. 
However, no matter from which field to seek expansion, Deshengtang would encounter strong competitors.It remains to see if Deshengtang can survive in the industry rather than be acquired by competitors.


Pre-IPO Deshengtang Pharmaceutical - Benign Development Momentum, but Still Face Some Risks

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 9th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the outflows to be USD 345 million and highlight flows for Tencent, China Mobile, CCB.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 9th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the outflows to be USD 345 million and highlight flows for Tencent, China Mobile, CCB.


Hong Kong Connect Flows (Jun 9th): Tencent, China Mobile, CCB

Thematic (Sector/Industry)

<ul>
<li>The current policy environment determines that TCM is the core asset of pharmaceuticals, not innovative drugs. We think it is necessary to take a fresh look at TCM industry.</li>
<li>TCM formula granules have more opportunities. Exclusive variety of branded OTC TCM has better outlook. TCM medical services also deserve investors’ attention, because hospitals are the main channels for TCM. </li>
<li>China's pharmaceutical industry has its unique features. We recommend investors to leave a place in the portfolio to invest in TCM companies, which could outperform in the current pharmaceutical environment.</li>
</ul>


The current policy environment determines that TCM is the core asset of pharmaceuticals, not innovative drugs. We think it is necessary to take a fresh look at TCM industry.
TCM formula granules have more opportunities. Exclusive variety of branded OTC TCM has better outlook. TCM medical services also deserve investors’ attention, because hospitals are the main channels for TCM. 
China's pharmaceutical industry has its unique features. We recommend investors to leave a place in the portfolio to invest in TCM companies, which could outperform in the current pharmaceutical environment.


China Traditional Chinese Medicine (TCM) Industry - TCM Is Becoming Indispensable in the Portfolio

China

Gushengtang Holdings Limted operates as a TCM (Traditional Chinese medicine) healthcare service provider. The Company operates offline medical institutions and online healthcare platforms and provides TCM healthcare services and products. Gushengtang conducts businesses in China.

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Gushengtang (2273 HK)

Hong Kong Connect Flows (August): $8.8bn Outflows

We analyzed the Hong Kong Connect Scheme for the month of August and highlight flows for Meituan, CCB, China Mobile, CNOOC, HKEX.

Ke Yan, CFA, FRM

China Population Policies Impact on Healthcare Companies Series - Part 1

China's population problem is already very serious. So, the government has begun to take a series of measures to optimize fertility policies. We...

Xinyao (Criss) Wang

Pre-IPO Deshengtang Pharmaceutical - Benign Development Momentum, but Still Face Some Risks

Deshengtang has hope for an early turnaround if benign development momentum could continue. But its business model does not have a high moat, so...

Xinyao (Criss) Wang

Hong Kong Connect Flows (Jun 9th): Tencent, China Mobile, CCB

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for Tencent, China Mobile, and China Construction Bank.

Ke Yan, CFA, FRM

China Traditional Chinese Medicine (TCM) Industry - TCM Is Becoming Indispensable in the Portfolio

The current policy environment in China indicates that TCM is core asset of pharmaceuticals, not innovative drug R&D. It''s time to take TCM...

Xinyao (Criss) Wang

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52-week Range

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