HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Ascentage Pharma Group Corp / Equity Capital Markets

<ul>
<li>Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.</li>
<li>The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion. </li>
<li>Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets. </li>
</ul>


Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.
The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion. 
Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets. 


Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

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 weekly Hong Kong Connect flows with our data engine for holding position as of December 20th.</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 highlight flows for Alibaba, CCB, China Mobile, ICBC, Ping An Insurance, Meituan, Tencent.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 20th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Alibaba, CCB, China Mobile, ICBC, Ping An Insurance, Meituan, Tencent.


Hong Kong Connect Flows (Dec 20th): Alibaba, CCB, China Mobile, ICBC, Ping An Insurance, Meituan

Event-Driven

<ul>
<li>2024 NRDL negotiation results were released. Some eye-catching drugs were included this time, which will bring challenges to companies such as <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent</a>, RemeGen, <a href="https://www.smartkarma.com/entities/gan-lee-pharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:36237:1" rel="noopener">Gan &amp; Lee Pharmaceuticals</a>, <a href="https://www.smartkarma.com/entities/xizang-haisco-pharmaceutical-group-coltd" target="_blank" data-smartkarma-citation="entities:4779:1" rel="noopener">Haisco Pharmaceutical</a>, etc..</li>
<li>There have been a big “expectation gap” for biotech companies in Hong Kong stock market - It's a mismatch between what the market thinks and what's actually happening.</li>
<li>The progress of Henlius’ privatization is still slower-than-expected. We also do not know how this privatization ranks in terms of strategic significance of capital operations within Fosun Pharma's system.</li>
</ul>


2024 NRDL negotiation results were released. Some eye-catching drugs were included this time, which will bring challenges to companies such as Innovent, RemeGen, Gan &amp; Lee Pharmaceuticals, Haisco Pharmaceutical, etc..
There have been a big “expectation gap” for biotech companies in Hong Kong stock market - It's a mismatch between what the market thinks and what's actually happening.
The progress of Henlius’ privatization is still slower-than-expected. We also do not know how this privatization ranks in terms of strategic significance of capital operations within Fosun Pharma's system.


China Healthcare Weekly (Dec.1)- 2024 NRDL Result, Expectation Gap for Biotech, Henlius' Wide Spread

Equity Bottom-Up

Hansoh Pharmaceutical Group  / Equity Bottom-Up

<ul>
<li>Hansoh’s 24H1 results beat the expectations. Product revenue (excluding BD cooperation revenue) would achieve double-digit growth in 2024 full year, among which revenue of Ameile would maintain 20%+ YoY growth.</li>
<li>Total product revenue would be about RMB14-14.5 billion in the future. Based on P/S of 5, market value is RMB70-72.5 billion, which is the lower end of market value range.</li>
<li>There is still certain gap in terms of R&amp;D capability/globalization outlook between Hansoh and those leading biotech in China. So, we think valuation of Hansoh would be lower than them.</li>
</ul>


Hansoh’s 24H1 results beat the expectations. Product revenue (excluding BD cooperation revenue) would achieve double-digit growth in 2024 full year, among which revenue of Ameile would maintain 20%+ YoY growth.
Total product revenue would be about RMB14-14.5 billion in the future. Based on P/S of 5, market value is RMB70-72.5 billion, which is the lower end of market value range.
There is still certain gap in terms of R&amp;D capability/globalization outlook between Hansoh and those leading biotech in China. So, we think valuation of Hansoh would be lower than them.


Hansoh Pharmaceutical Group (3692.HK) - Successful Business Transformation Opens up Valuation Upside

Ascentage Pharma Group Corp / Equity Bottom-Up

<ul>
<li>For full-year 2024, sales of olverembatinib is expected to reach about RMB240 million, and there is a possibility of exceeding expectations. RMB500 million sales of olverembatinib is expected in 2025.</li>
<li>Market value of US$1.25 – 1.9 billion is reasonable range for Ascentage if just considering olverembatinib alone. The peak sales of APG-2575 is expected to surpass olverembatinib in overseas markets. </li>
<li>The next big catalyst is the potential licensing cooperation with MNCs for APG-2575, if reaches, would push Ascentage’s market value to surpass HUTCHMED, as prospects of APG-2575 is basically guaranteed.</li>
</ul>


For full-year 2024, sales of olverembatinib is expected to reach about RMB240 million, and there is a possibility of exceeding expectations. RMB500 million sales of olverembatinib is expected in 2025.
Market value of US$1.25 – 1.9 billion is reasonable range for Ascentage if just considering olverembatinib alone. The peak sales of APG-2575 is expected to surpass olverembatinib in overseas markets. 
The next big catalyst is the potential licensing cooperation with MNCs for APG-2575, if reaches, would push Ascentage’s market value to surpass HUTCHMED, as prospects of APG-2575 is basically guaranteed.


Ascentage Pharma (6855.HK) - The Future Valuation Leap Is Worth Looking Forward To

Hong Kong

HUTCHMED (China) Limited develops, manufactures, and sells pharmaceutical products. The Company offers drugs for oncology and autoimmune diseases treatment. HUTCHMED (China) markets its products worldwide.

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Hutchmed China Ltd (13 HK)

Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

Xinyao (Criss) Wang

Hong Kong Connect Flows (Dec 20th): Alibaba, CCB, China Mobile, ICBC, Ping An Insurance, Meituan

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, CCB, China Mobile, ICBC, Ping An Insurance,...

Ke Yan, CFA, FRM

China Healthcare Weekly (Dec.1)- 2024 NRDL Result, Expectation Gap for Biotech, Henlius' Wide Spread

2024 NRDL results released, posing new challenges. Expectation gap for biotech in HK provides opportunities. Henlius' privatization progress is...

Xinyao (Criss) Wang

Hansoh Pharmaceutical Group (3692.HK) - Successful Business Transformation Opens up Valuation Upside

Hansoh's strong 24H1 results secure double-digit growth in 2024. However, valuation could be lower than leading biotech due to gap in R&D...

Xinyao (Criss) Wang

Ascentage Pharma (6855.HK) - The Future Valuation Leap Is Worth Looking Forward To

Olverembatinib sales is expected to reach RMB240 million in 2024, RMB500 million in 2025. Reasonable market value is US$1.25-1.9 billion. Licensing...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

​Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

Xinyao (Criss) Wang

Hong Kong Connect Flows (Dec 20th): Alibaba, CCB, China Mobile, ICBC, Ping An Insurance, Meituan

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Alibaba, CCB, China Mobile, ICBC, Ping An Insurance,...

Ke Yan, CFA, FRM

China Healthcare Weekly (Dec.1)- 2024 NRDL Result, Expectation Gap for Biotech, Henlius' Wide Spread

​2024 NRDL results released, posing new challenges. Expectation gap for biotech in HK provides opportunities. Henlius' privatization progress is...

Xinyao (Criss) Wang

Hansoh Pharmaceutical Group (3692.HK) - Successful Business Transformation Opens up Valuation Upside

​Hansoh's strong 24H1 results secure double-digit growth in 2024. However, valuation could be lower than leading biotech due to gap in R&D...

Xinyao (Criss) Wang

Ascentage Pharma (6855.HK) - The Future Valuation Leap Is Worth Looking Forward To

Olverembatinib sales is expected to reach RMB240 million in 2024, RMB500 million in 2025. Reasonable market value is US$1.25-1.9 billion. Licensing...

Xinyao (Criss) Wang

Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

2024 NRDL results released, posing new challenges. Expectation gap for biotech in HK provides opportunities. Henlius' privatization progress is...

Hansoh's strong 24H1 results secure double-digit growth in 2024. However, valuation could be lower than leading biotech due to gap in R&D...