HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Due to the popularity of GLP-1 target, the entire GLP-1 upstream and downstream industry chain has received great enthusiasm. We analyzed related investment opportunities but also concerns in this market.  </li>
<li>Domestic CXOs should focus on securing orders for overseas weight loss drugs. The market value increment brought by weight loss drugs to CXO should be higher than that of APIs.</li>
<li>Due to increasing competition/potential price war, how big the real market space is uncertain. So, the market value increment of weight loss drugs business for pharmaceutical companies could be lower-than-expected.</li>
</ul>


Due to the popularity of GLP-1 target, the entire GLP-1 upstream and downstream industry chain has received great enthusiasm. We analyzed related investment opportunities but also concerns in this market.  
Domestic CXOs should focus on securing orders for overseas weight loss drugs. The market value increment brought by weight loss drugs to CXO should be higher than that of APIs.
Due to increasing competition/potential price war, how big the real market space is uncertain. So, the market value increment of weight loss drugs business for pharmaceutical companies could be lower-than-expected.


China's Weight Loss Drug Market – The Investment Opportunities and the Risks Behind

Equity Capital Markets

<ul>
<li>Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.</li>
<li>Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.</li>
<li>Medtide's business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.</li>
</ul>


Medtide relies heavily on limited number of customers to contribute performance. If there is any significant reduction in demand by its major customers, Medtide’s performance growth would be materially/adversely affected.
Due to geopolitical conflicts, pharmaceutical companies are becoming more cautious about their reliance on China CXO. So, the development of Medtide’s overseas business would become more uncertain in this context.
Medtide's business scale is still small and its position in the global peptide CXO industry is not as strong as described. Valuation of Medtide should be lower than peers.


Pre-IPO Medtide - The Industry, the Business and the Concerns

Event-Driven

<ul>
<li>Zadaxin is the biggest performance driver of SciClone. However, due to the challenge of generic drugs/VBP, sales of Zadaxin wouldn’t maintain strong growth momentum.  SciClone’s revenue/profit would face a significant decline.</li>
<li>The capital participating the IPO had reduced their holdings or exit entirely. Considering the low valuation/poor liquidity in HKEX, we think this privatization provides investors with a great exit opportunity.</li>
<li>For arbitrage investors, the annualized return depends on the time it takes to complete the privatization (e.g. about 5%-10%). If the privatization fails, share price could fall back to HK$14.</li>
</ul>


Zadaxin is the biggest performance driver of SciClone. However, due to the challenge of generic drugs/VBP, sales of Zadaxin wouldn’t maintain strong growth momentum.  SciClone’s revenue/profit would face a significant decline.
The capital participating the IPO had reduced their holdings or exit entirely. Considering the low valuation/poor liquidity in HKEX, we think this privatization provides investors with a great exit opportunity.
For arbitrage investors, the annualized return depends on the time it takes to complete the privatization (e.g. about 5%-10%). If the privatization fails, share price could fall back to HK$14.


Sciclone Pharmaceuticals (6600.HK) - The Privatization Offers a Good Exit Opportunity

<ul>
<li>While we’re optimistic about weight loss drug business, we also need to recognize the "true colors" of relevant companies, which helps us realize "when to participate and when to exit".</li>
<li>We analyzed the negatives/"flaws" of popular companies that favored by capital: <a href="https://www.smartkarma.com/entities/brightgene-bio-medical-technol" target="_blank" data-smartkarma-citation="entities:30356:1" rel="noopener">BrightGene Bio-Medical Technol (688166 CH)</a>, <a href="https://www.smartkarma.com/entities/hybio-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:20966:1" rel="noopener">Hybio Pharmaceutical (300199 CH)</a>, <a href="https://www.smartkarma.com/entities/hainan-poly-pharm-co-ltd" target="_blank" data-smartkarma-citation="entities:29739:1" rel="noopener">Hainan Poly Pharm (300630 CH), </a>Sinopep-Allsino, Kawin Technology, Highfine Biotech,etc.</li>
<li>Short-Term stock price rally are mainly driven by sentiment, but future valuation still needs to be supported by performance and fundamentals. Some companies are just conceptual hype in our view.</li>
</ul>


While we’re optimistic about weight loss drug business, we also need to recognize the "true colors" of relevant companies, which helps us realize "when to participate and when to exit".
We analyzed the negatives/"flaws" of popular companies that favored by capital: BrightGene Bio-Medical Technol (688166 CH), Hybio Pharmaceutical (300199 CH), Hainan Poly Pharm (300630 CH), Sinopep-Allsino, Kawin Technology, Highfine Biotech,etc.
Short-Term stock price rally are mainly driven by sentiment, but future valuation still needs to be supported by performance and fundamentals. Some companies are just conceptual hype in our view.


China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

<ul><li>From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. </li><li>For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.</li><li>Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. </li></ul>

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. 

China

Hybio Pharmaceutical Co., Ltd. develops drug products. The Company manufactures and sells omeprazole sodium injection, somatostatin injection, desmopressin, antide, and other related products. Hybio Pharmaceutical also develops and sells medical testing products.

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Hybio Pharmaceutical (300199 CH)

China's Weight Loss Drug Market – The Investment Opportunities and the Risks Behind

The GLP-1 target has been recognized as a blockbuster target, which has attracted great enthusiasm from investors.We analyzed related investment...

Xinyao (Criss) Wang

Pre-IPO Medtide - The Industry, the Business and the Concerns

Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Xinyao (Criss) Wang

Sciclone Pharmaceuticals (6600.HK) - The Privatization Offers a Good Exit Opportunity

The success rate of privatization could be 70-80%. The time could be about six months. The annualized rate of return isn't attractive.It's up to...

Xinyao (Criss) Wang

China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

Some popular companies are favored by capital on the back of enthusiasm for weight loss drugs, but sometimes it's just "conceptual hype". We need...

Xinyao (Criss) Wang

Key Drivers of Asia's Healthcare Sector

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and...

Singapore Exchange Ltd (SGX)

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China's Weight Loss Drug Market – The Investment Opportunities and the Risks Behind

The GLP-1 target has been recognized as a blockbuster target, which has attracted great enthusiasm from investors.We analyzed related investment...

Xinyao (Criss) Wang

Pre-IPO Medtide - The Industry, the Business and the Concerns

​Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...

Xinyao (Criss) Wang

Sciclone Pharmaceuticals (6600.HK) - The Privatization Offers a Good Exit Opportunity

The success rate of privatization could be 70-80%. The time could be about six months. The annualized rate of return isn't attractive.It's up to...

Xinyao (Criss) Wang

China’s China Weight Loss Drug Market Update – the Negatives and the True Colors

Some popular companies are favored by capital on the back of enthusiasm for weight loss drugs, but sometimes it's just "conceptual hype". We need...

Xinyao (Criss) Wang

Key Drivers of Asia's Healthcare Sector

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and...

Singapore Exchange Ltd (SGX)

Medtide's growth is at risk due to high reliance on limited customers, uncertainty in overseas business and lower-than-expected position in global...