HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shanghai Junshi Biosciences  / Equity Bottom-Up

<ul>
<li>For all licensing cooperation with MNCs, we recommend that investors wait to see what MNCs' next move is before deciding whether the cooperation is really promising.</li>
<li>Topchoice showed good business growth in 24Q2. Our biggest concern for Topchoice is that the unit price per customer may further decrease in the future, thereby affecting revenue/profit growth.</li>
<li>Junshi’s sales growth picked up in 24Q1, but concerns on Junshi persist. We don't think Junshi is undervalued and its valuation should be lower than that of peers.</li>
</ul>


For all licensing cooperation with MNCs, we recommend that investors wait to see what MNCs' next move is before deciding whether the cooperation is really promising.
Topchoice showed good business growth in 24Q2. Our biggest concern for Topchoice is that the unit price per customer may further decrease in the future, thereby affecting revenue/profit growth.
Junshi’s sales growth picked up in 24Q1, but concerns on Junshi persist. We don't think Junshi is undervalued and its valuation should be lower than that of peers.


China Healthcare Weekly (July.7) - MNCs' Next Move In Licensing Deals, Topchoice, Junshi's Trouble

<ul>
<li>Retail pharmacies experienced performance decline in April and May. Due to negative policies, retail pharmacies will experience industry clearance. Therefore, we do not recommend investors to bottom-fish related stocks now.</li>
<li>There is a logic to biotech's performance from 2023 to present.The clearer the path of sustainable development, the better the stock price performance. They can be divided into three types.</li>
<li>YSB faces big risks and the outlook is not optimistic. If the final valuation of the Company is lower than <a href="https://www.smartkarma.com/entities/china-resources-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:22928:1" rel="noopener">China Resources Pharmaceutical</a> and <a href="https://www.smartkarma.com/entities/shanghai-pharmaceuticals-holding" target="_blank" data-smartkarma-citation="entities:228:1" rel="noopener">Shanghai Pharmaceuticals</a>, we wouldn't be too surprised.</li>
</ul>


Retail pharmacies experienced performance decline in April and May. Due to negative policies, retail pharmacies will experience industry clearance. Therefore, we do not recommend investors to bottom-fish related stocks now.
There is a logic to biotech's performance from 2023 to present.The clearer the path of sustainable development, the better the stock price performance. They can be divided into three types.
YSB faces big risks and the outlook is not optimistic. If the final valuation of the Company is lower than China Resources Pharmaceutical and Shanghai Pharmaceuticals, we wouldn't be too surprised.


China Healthcare Weekly (Jun23)-Retail Pharmacy's Dilemma, Logic to Biotech's Stock Price,YSB's Risk

Ascentage Pharma Group Corp / Equity Bottom-Up

<ul>
<li>Ascentage was originally in an extremely difficult situation, but the cooperation with Takeda turned things around. Ascentage has obtained urgently needed cash flow to solve the survival problem.</li>
<li>At this stage, it’s possible for Ascentage to hit about 50% market value of HCM.  Investors are interested to know if APG-2575 would also be out-licensed, which however is not easy.</li>
<li>Ascentage’s current strength isn’t sufficient to self-build sales system. While this deal is a good start, if Ascentage still chooses to do commercialization on its own, it’s time to sell. </li>
</ul>


Ascentage was originally in an extremely difficult situation, but the cooperation with Takeda turned things around. Ascentage has obtained urgently needed cash flow to solve the survival problem.
At this stage, it’s possible for Ascentage to hit about 50% market value of HCM.  Investors are interested to know if APG-2575 would also be out-licensed, which however is not easy.
Ascentage’s current strength isn’t sufficient to self-build sales system. While this deal is a good start, if Ascentage still chooses to do commercialization on its own, it’s time to sell. 


Ascentage Pharma (6855.HK) Signs $1.3B Deal with Takeda - Finally on the Right Path

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>Kelun-Biotech: Promising Ph2 results of SKB264+A167 in 1L NSCLC.</li><li>SKB264 (Q3W)+A167 (PD-L1)’s 15.4 months of mPFS in 1L NSCLC was much better than the SoC – 9.0 months mPFS of Keytruda+chemo in KEYNOTE189 and 9.7 months mPFS of tislelizumab+chemo in RATIONALE304.</li><li>SKB264’s Ph3 dose of Q2W could deliver even better efficacy, in our view. SKB264+A167 also showed strong potential in PD-L1 negative NSCLC. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Kelun-Biotech: Promising Ph2 results of SKB264+A167 in 1L NSCLC.SKB264 (Q3W)+A167 (PD-L1)’s 15.4 months of mPFS in 1L NSCLC was much better than the SoC – 9.0 months mPFS of Keytruda+chemo in KEYNOTE189 and 9.7 months mPFS of tislelizumab+chemo in RATIONALE304.SKB264’s Ph3 dose of Q2W could deliver even better efficacy, in our view. SKB264+A167 also showed strong potential in PD-L1 negative NSCLC. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Healthcare - Chinese Biopharma Releasing Promising Data at ASCO

<ul>
<li>Innovent’s 24Q1 product sales was up just 6% QoQ. The overall data shows that PD-1 growth has entered a bottleneck. This makes 24H2 YoY growth rate uncertain.</li>
<li>The deal between Hengrui and Hercules is different from traditional license-out cooperation, but belong to asset spin-off in essence, which is a “smart deal” and also a meaningful attempt.</li>
<li>There’re some positive signals in Zai Lab’s 24Q1 performance, but the pain points of business model severely limit its profitability/revenue scale. Zai Lab still has a long way to go.</li>
</ul>


Innovent’s 24Q1 product sales was up just 6% QoQ. The overall data shows that PD-1 growth has entered a bottleneck. This makes 24H2 YoY growth rate uncertain.
The deal between Hengrui and Hercules is different from traditional license-out cooperation, but belong to asset spin-off in essence, which is a “smart deal” and also a meaningful attempt.
There’re some positive signals in Zai Lab’s 24Q1 performance, but the pain points of business model severely limit its profitability/revenue scale. Zai Lab still has a long way to go.


China Healthcare Weekly (Jun.2) - Innovent's Trouble, Hengrui's “smart Deal”, Zai Lab’s Pain Point

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)

China Healthcare Weekly (July.7) - MNCs' Next Move In Licensing Deals, Topchoice, Junshi's Trouble

Investors should wait to see MNCs' next move before deciding on licensing deals. Topchoice's growth is positive but unit price per customer may...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun23)-Retail Pharmacy's Dilemma, Logic to Biotech's Stock Price,YSB's Risk

Retail pharmacies facing industry clearance due to negative policies.Biotech stock performance tied to sustainable development path. YSB faces...

Xinyao (Criss) Wang

Ascentage Pharma (6855.HK) Signs $1.3B Deal with Takeda - Finally on the Right Path

Cooperation with Takeda saves Ascentage from survival problem, but self-building sales team remains a challenge. Investors eye anther deal with...

Xinyao (Criss) Wang

Healthcare - Chinese Biopharma Releasing Promising Data at ASCO

SKB264 (Q3W)+A167 (PD-L1)’s 15.4 months of mPFS in 1L NSCLC was much better than the SoC – 9.0 months mPFS of Keytruda+chemo in KEYNOTE189

CMB International

China Healthcare Weekly (Jun.2) - Innovent's Trouble, Hengrui's “smart Deal”, Zai Lab’s Pain Point

Innovent's PD-1 growth face bottleneck, with uncertainty in 24H2 growth; Hengrui-Hercules deal a "smart" asset spin-off; Zai Lab has positive...

Xinyao (Criss) Wang

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52-week Range

Market Cap (USDm)

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China Healthcare Weekly (July.7) - MNCs' Next Move In Licensing Deals, Topchoice, Junshi's Trouble

​Investors should wait to see MNCs' next move before deciding on licensing deals. Topchoice's growth is positive but unit price per customer may...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun23)-Retail Pharmacy's Dilemma, Logic to Biotech's Stock Price,YSB's Risk

​Retail pharmacies facing industry clearance due to negative policies.Biotech stock performance tied to sustainable development path. YSB faces...

Xinyao (Criss) Wang

Ascentage Pharma (6855.HK) Signs $1.3B Deal with Takeda - Finally on the Right Path

​Cooperation with Takeda saves Ascentage from survival problem, but self-building sales team remains a challenge. Investors eye anther deal with...

Xinyao (Criss) Wang

Healthcare - Chinese Biopharma Releasing Promising Data at ASCO

SKB264 (Q3W)+A167 (PD-L1)’s 15.4 months of mPFS in 1L NSCLC was much better than the SoC – 9.0 months mPFS of Keytruda+chemo in KEYNOTE189

CMB International

China Healthcare Weekly (Jun.2) - Innovent's Trouble, Hengrui's “smart Deal”, Zai Lab’s Pain Point

​Innovent's PD-1 growth face bottleneck, with uncertainty in 24H2 growth; Hengrui-Hercules deal a "smart" asset spin-off; Zai Lab has positive...

Xinyao (Criss) Wang

Investors should wait to see MNCs' next move before deciding on licensing deals. Topchoice's growth is positive but unit price per customer may...

Retail pharmacies facing industry clearance due to negative policies.Biotech stock performance tied to sustainable development path. YSB faces...

Cooperation with Takeda saves Ascentage from survival problem, but self-building sales team remains a challenge. Investors eye anther deal with...

Innovent's PD-1 growth face bottleneck, with uncertainty in 24H2 growth; Hengrui-Hercules deal a "smart" asset spin-off; Zai Lab has positive...