HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

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

Global Healthcare Analyst

Tina Banerjee

Thematic (Sector/Industry)

<ul>
<li>Samsung Biologics signs manufacturing deals worth over $668M with European pharmaceutical company. Celltrion is acquiring iQone Healthcare, a specialty pharmaceutical distribution company in Switzerland. Kyowa Kirin collaborates for leukemia drug.</li>
<li>Takeda launched Hutchmed’s colorectal cancer drug Fruzaqla in Japan. FDA has turned down Astellas Pharma’s application for label update of geographic atrophy drug Izervay. Lunit is partnering with AstraZeneca.</li>
<li>Yuhan is one step ahead for European approval of Leclaza. HK inno.N signs domestic supply contract for Roche’s influenza treatment, Tamiflu. Beigene settles litigation against generic filer of Brukinsa.</li>
</ul>


Samsung Biologics signs manufacturing deals worth over $668M with European pharmaceutical company. Celltrion is acquiring iQone Healthcare, a specialty pharmaceutical distribution company in Switzerland. Kyowa Kirin collaborates for leukemia drug.
Takeda launched Hutchmed’s colorectal cancer drug Fruzaqla in Japan. FDA has turned down Astellas Pharma’s application for label update of geographic atrophy drug Izervay. Lunit is partnering with AstraZeneca.
Yuhan is one step ahead for European approval of Leclaza. HK inno.N signs domestic supply contract for Roche’s influenza treatment, Tamiflu. Beigene settles litigation against generic filer of Brukinsa.


APAC Healthcare Weekly (Nov 24)- Samsung Biologics, Celltrion, Takeda, Kyowa Kirin, Astellas Pharma

<ul>
<li>The assassination of Trump in July has greatly increased the probability of his election as president this year. However, a Trump presidency is not necessarily good for healthcare industry.</li>
<li>Trump's reform in the field of healthcare has two major propositions - One is to achieve the independence of US pharmaceutical supply chain. The other is to reduce drug prices.</li>
<li>From a US national security perspective, China's APIs/CXO would be the segments with the highest sanction risk. China Biotech may also face some headwinds. The risk of "decoupling" further increases.</li>
</ul>


The assassination of Trump in July has greatly increased the probability of his election as president this year. However, a Trump presidency is not necessarily good for healthcare industry.
Trump's reform in the field of healthcare has two major propositions - One is to achieve the independence of US pharmaceutical supply chain. The other is to reduce drug prices.
From a US national security perspective, China's APIs/CXO would be the segments with the highest sanction risk. China Biotech may also face some headwinds. The risk of "decoupling" further increases.


What Does a Trump Presidency Mean for China Healthcare?

<ul>
<li>China healthcare can be mainly divided into the following segments: pharmaceuticals, medical devices, medical services, To B Supply Chain. Investment logic and business characteristics in these fields are completely different.</li>
<li>“High standardization+low dependence on doctors” help pharmaceuticals gain a more favorable commercial value than medical devices in distribution process. Profit margin/cross-regional expansion capability of medical services have always been questioned.</li>
<li>The business characteristics of “To B supply chain” indicate strong cyclical characteristics due to supply rigidity and demand fluctuations, which are easily affected by changes in demand trends.</li>
</ul>


China healthcare can be mainly divided into the following segments: pharmaceuticals, medical devices, medical services, To B Supply Chain. Investment logic and business characteristics in these fields are completely different.
“High standardization+low dependence on doctors” help pharmaceuticals gain a more favorable commercial value than medical devices in distribution process. Profit margin/cross-regional expansion capability of medical services have always been questioned.
The business characteristics of “To B supply chain” indicate strong cyclical characteristics due to supply rigidity and demand fluctuations, which are easily affected by changes in demand trends.


The “Game Rule” of China Healthcare - Pharmaceuticals Vs Medical Devices Vs Medical Services

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Hutchmed China Ltd (13 HK)

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

APAC Healthcare Weekly (Nov 24)- Samsung Biologics, Celltrion, Takeda, Kyowa Kirin, Astellas Pharma

Samsung Biologics secures new manufacturing deals, Celltrion is acquiring iQone Healthcare, Takeda launches colorectal cancer drug in Japan, and...

Tina Banerjee

What Does a Trump Presidency Mean for China Healthcare?

Trump successfully elected as the US President. His reform in healthcare is to achieve the independence of US pharmaceutical supply chain and...

Xinyao (Criss) Wang

The “Game Rule” of China Healthcare - Pharmaceuticals Vs Medical Devices Vs Medical Services

China healthcare has distinct segments with different investment logic/characteristics.The pecking order is drugs>medical device>medical...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

APAC Healthcare Weekly (Nov 24)- Samsung Biologics, Celltrion, Takeda, Kyowa Kirin, Astellas Pharma

​Samsung Biologics secures new manufacturing deals, Celltrion is acquiring iQone Healthcare, Takeda launches colorectal cancer drug in Japan, and...

Tina Banerjee

What Does a Trump Presidency Mean for China Healthcare?

Trump successfully elected as the US President. His reform in healthcare is to achieve the independence of US pharmaceutical supply chain and...

Xinyao (Criss) Wang

The “Game Rule” of China Healthcare - Pharmaceuticals Vs Medical Devices Vs Medical Services

​China healthcare has distinct segments with different investment logic/characteristics.The pecking order is drugs>medical device>medical...

Xinyao (Criss) Wang

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...

Samsung Biologics secures new manufacturing deals, Celltrion is acquiring iQone Healthcare, Takeda launches colorectal cancer drug in Japan, and...

China healthcare has distinct segments with different investment logic/characteristics.The pecking order is drugs>medical device>medical...