HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>CanSino’s performance declined in 22H1 due to decreased demand of COVID-19 vaccine. Since we have analyzed our concerns on performance in prior insight, there should be psychological expectations for the decline.</li>
<li>The COVID-19 vaccine business brings CanSino rich cash flow and helps it establish commercial team. Together with MCV2/MCV4/mRNA/PCV13i, it's too early to be completely bearish on CanSino.</li>
<li>The market has exaggerated the impact of performance decline of COVID-19 vaccine on CanSino. Although 2022 is a difficult year, it is a good time to bottom fish this stock.</li>
</ul>


CanSino’s performance declined in 22H1 due to decreased demand of COVID-19 vaccine. Since we have analyzed our concerns on performance in prior insight, there should be psychological expectations for the decline.
The COVID-19 vaccine business brings CanSino rich cash flow and helps it establish commercial team. Together with MCV2/MCV4/mRNA/PCV13i, it's too early to be completely bearish on CanSino.
The market has exaggerated the impact of performance decline of COVID-19 vaccine on CanSino. Although 2022 is a difficult year, it is a good time to bottom fish this stock.


CanSino Biologics (6185.HK/688185.CH) 2022H1 - It's Too Early to Be Completely Bearish on CanSino

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.

<div><div><div><div><ul><li>InnoCare recorded total revenue of RMB246.0mn in 1H22, including RMB217.0mn sales from orelabrutinib (+115% YoY).</li><li>The total net loss was RMB445.8mn (vs RMB213.1mn net loss in 1H21), which was affected by RMB160.0mn foreign exchange loss in 1H22.</li><li>The gross profit margin of orelabrutinib sales was 82.8% in 1H22, compared to 90.3% in 1H21 and 89.0% in FY21, with the GMP decrease mainly due to the price cut for NRDL inclusion.</li></ul></div></div></div></div><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>

InnoCare recorded total revenue of RMB246.0mn in 1H22, including RMB217.0mn sales from orelabrutinib (+115% YoY).The total net loss was RMB445.8mn (vs RMB213.1mn net loss in 1H21), which was affected by RMB160.0mn foreign exchange loss in 1H22.The gross profit margin of orelabrutinib sales was 82.8% in 1H22, compared to 90.3% in 1H21 and 89.0% in FY21, with the GMP decrease mainly due to the price cut for NRDL inclusion.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.

InnoCare Pharma (9969 HK) – Strong Sales of Orelabrutinib in 1H22

Thematic (Sector/Industry)

<ul>
<li>The NHSA issued a Notice on the investigation and registration of dental implant charges and service fees, paving ways for the subsequent centralized procurement, which would affect companies’ profit model.</li>
<li>As the pioneer of commercial insurance,Huimin Insurance is showing a decreasing marginal effect on improving the ability to pay the bills out of NRDL and improving bargaining power of companies.</li>
<li>To improve internationalization, China Biotech can choose to “Fast Follow” differentiated BIC candidates and also start MRCT in Phase I trials. This could be a path to strive for.</li>
</ul>


The NHSA issued a Notice on the investigation and registration of dental implant charges and service fees, paving ways for the subsequent centralized procurement, which would affect companies’ profit model.
As the pioneer of commercial insurance,Huimin Insurance is showing a decreasing marginal effect on improving the ability to pay the bills out of NRDL and improving bargaining power of companies.
To improve internationalization, China Biotech can choose to “Fast Follow” differentiated BIC candidates and also start MRCT in Phase I trials. This could be a path to strive for.


China Healthcare Weekly (Aug19)-Dental Implant VBP,Commercial Insurance,Biotech Internationalization

<ul>
<li>InnoCare was approved to list in the SSE STAR Market, and the Company also released its improving financial performance in 2021. However, the outlook for InnoCare remains challenging and uncertain.</li>
<li>Either orelabrutinib or the pipeline, they don’t have pricing power due to lack of sufficient competitiveness and slower development progress, which means that their commercialization performance is highly uncertain.</li>
<li>There’s no definite commercialization outlook for InnoCare, with a far distance from becoming a biopharma. InnoCare was overvalued and could be attractive if the market value could be 50% off.</li>
</ul>


InnoCare was approved to list in the SSE STAR Market, and the Company also released its improving financial performance in 2021. However, the outlook for InnoCare remains challenging and uncertain.
Either orelabrutinib or the pipeline, they don’t have pricing power due to lack of sufficient competitiveness and slower development progress, which means that their commercialization performance is highly uncertain.
There’s no definite commercialization outlook for InnoCare, with a far distance from becoming a biopharma. InnoCare was overvalued and could be attractive if the market value could be 50% off.


InnoCare Pharma Ltd (9969.HK) - Lack of Clear Commercialization Prospects

<ul>
<li>We analyzed both the strength and the concerns about the core and key candidates in the pipeline.</li>
<li>We also analyzed the concerns about the valuation growth potential due to the strategy that <a href="https://www.smartkarma.com/entities/keymed-biosciences-inc" target="_blank" data-smartkarma-citation="entities:33011:1" rel="noopener">Keymed Biosciences Inc (2162 HK)</a> chose.</li>
<li>For trading strategy, opportunities occur when the share price goes down,and then take profits when it goes up, but it is not recommended to hold it for a long time.</li>
</ul>


We analyzed both the strength and the concerns about the core and key candidates in the pipeline.
We also analyzed the concerns about the valuation growth potential due to the strategy that Keymed Biosciences Inc (2162 HK) chose.
For trading strategy, opportunities occur when the share price goes down,and then take profits when it goes up, but it is not recommended to hold it for a long time.


Keymed Biosciences (2162.HK) - The Pipeline, the Concerns on Valuation Growth & The Trading Strategy

China

InnoCare Pharma Limited researches, develops, manufactures, and distributes pharmaceuticals. The Company produces antibiotic drugs, respiratory drugs, cardiovascular drugs, vitamin tablets, health care drugs, and other related products. InnoCare Pharma markets its products throughout China.

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InnoCare Pharma Ltd (9969 HK)

CanSino Biologics (6185.HK/688185.CH) 2022H1 - It's Too Early to Be Completely Bearish on CanSino

The market has exaggerated the impact of performance decline of COVID-19 vaccine on CanSino. Although 2022 is a difficult year, considering MCV2...

Xinyao (Criss) Wang

InnoCare Pharma (9969 HK) – Strong Sales of Orelabrutinib in 1H22

The total net loss was RMB445.8mn (vs RMB213.1mn net loss in 1H21), which was affected by RMB160.0mn foreign exchange loss in 1H22.

CMB International

China Healthcare Weekly (Aug19)-Dental Implant VBP,Commercial Insurance,Biotech Internationalization

Dental implant VBP will affect companies' profit model/valuation elasticity. Commercial medical insurance faces challenges. China Biotech's...

Xinyao (Criss) Wang