HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>2023 is a crucial year for Zai Lab.It’s the first time for Zai Lab to demonstrate the profitability of license-in model.If it fails, investors would lose confidence in the company.</li>
<li>There is little correlation between the four commercialized products, which makes commercialization difficult and leads to low efficiency/high costs for sales team. So, breakeven could be more distant than expected.</li>
<li>Zai Lab's current pipelines are hard to make money. There are concerns whether its business model is sustainable in the long term. As its valuation lacks an “anchor”, risk is high.</li>
</ul>


2023 is a crucial year for Zai Lab.It’s the first time for Zai Lab to demonstrate the profitability of license-in model.If it fails, investors would lose confidence in the company.
There is little correlation between the four commercialized products, which makes commercialization difficult and leads to low efficiency/high costs for sales team. So, breakeven could be more distant than expected.
Zai Lab's current pipelines are hard to make money. There are concerns whether its business model is sustainable in the long term. As its valuation lacks an “anchor”, risk is high.


Zai Lab (9688.HK/ZLAB.US) 2022/2023Q1 - The True Colors and the Risks Behind

<ul>
<li>The 9th national VBP has begun. We analyzed the major big varieties with sales over RMB1 billion included in this VBP and the impact on related domestic pharmaceutical companies. </li>
<li>"Concept validation" of the business model of Chinese Biotech companies has been completed. Even under enormous pressure of medical insurance fee control policy, drug sales remain a reliable profit model.</li>
<li>Medlive's weak share price performance has a reason. The significant profitability increase in 23H1 wasn't from the improvement of main business. Its business model needs time to be further validated.</li>
</ul>


The 9th national VBP has begun. We analyzed the major big varieties with sales over RMB1 billion included in this VBP and the impact on related domestic pharmaceutical companies. 
"Concept validation" of the business model of Chinese Biotech companies has been completed. Even under enormous pressure of medical insurance fee control policy, drug sales remain a reliable profit model.
Medlive's weak share price performance has a reason. The significant profitability increase in 23H1 wasn't from the improvement of main business. Its business model needs time to be further validated.


China Healthcare Weekly (Sep.8)- 9th VBP, Reliable Profit Model of Biotech, Medlive, China's Outlook

Shanghai Junshi Biosciences  / Equity Bottom-Up

<ul>
<li>IPO rules in SSE STAR Market faces adjustments, so investors have lowered expectations, which will affect the fundraising ecology. Recovery of China’s financing environment would be slower than US/Europe.</li>
<li>The CSRC has issued new policies related to stamp duty, IPO, and reduction of shares held by listed companies, which would significantly affect the capitalization path of pharmaceutical companies.</li>
<li>Junshi is “an interesting Biotech” that once generated sales/profits in scale, but is losing money again.Since Junshi is outside the first echelon and the gap is widening, we remain conservative. </li>
</ul>


IPO rules in SSE STAR Market faces adjustments, so investors have lowered expectations, which will affect the fundraising ecology. Recovery of China’s financing environment would be slower than US/Europe.
The CSRC has issued new policies related to stamp duty, IPO, and reduction of shares held by listed companies, which would significantly affect the capitalization path of pharmaceutical companies.
Junshi is “an interesting Biotech” that once generated sales/profits in scale, but is losing money again.Since Junshi is outside the first echelon and the gap is widening, we remain conservative. 


China Healthcare Weekly (Sep.1) - China's New IPO Reform, Financing Environment, Junshi Biosciences

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>In three more weeks, the index changes and the indicative capping changes for the September 2023 rebalance will be officially announced. </li>
<li>We first looked at the potential HSCEI index changes and the resultant capping flows for September 2023 in <a href="https://www.smartkarma.com/insights/quiddity-hscei-sep-23-flow-expectations-two-changes-likely-us-276mn-one-way" target="_blank" data-smartkarma-citation="insights:104329" rel="noopener">Quiddity HSCEI Sep 23 Flow Expectations: Two Changes Likely, US$276mn One-Way</a> </li>
<li>In this insight, we take a look at Quiddity's updated flow expectations which account for the changes in prices in the last ~1.5 months.</li>
</ul>


In three more weeks, the index changes and the indicative capping changes for the September 2023 rebalance will be officially announced. 
We first looked at the potential HSCEI index changes and the resultant capping flows for September 2023 in Quiddity HSCEI Sep 23 Flow Expectations: Two Changes Likely, US$276mn One-Way 
In this insight, we take a look at Quiddity's updated flow expectations which account for the changes in prices in the last ~1.5 months.


Quiddity HSCEI Sep 23 Flow Expectations Update: US$367mn One-Way, Beigene Vs Peers Interesting

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>9950HK/BGNE: BioNTech signed another ADC from Durality, negative to RemeGen and BeiGene（-）</li>
<li>9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK: National Audit Office's special audit on auditing Guangdong's pharmaceutical consumables showed breadth and depth of the current anti-corruption probe（+/+/-/-/-/-）</li>
<li>BABA/SE:TikTok is in early talks with regulators to obtain a payments license in Indonesia.(-)</li>
</ul>


9950HK/BGNE: BioNTech signed another ADC from Durality, negative to RemeGen and BeiGene（-）
9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK: National Audit Office's special audit on auditing Guangdong's pharmaceutical consumables showed breadth and depth of the current anti-corruption probe（+/+/-/-/-/-）
BABA/SE:TikTok is in early talks with regulators to obtain a payments license in Indonesia.(-)


China/Asian TMT Update-9950HK/BGNE/9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK/BABA/SE-Special Audit

China

Innovent Biologics, Inc. operates as a biopharmaceutical company. The Company develops, manufactures, and distributes monoclonal antibody drug candidates for the treatment of oncology, ophthalmology, autoimmune, cardiovascular, and other diseases. Innovent Biologics serves customers in China.

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Innovent Biologics Inc (1801 HK)

Zai Lab (9688.HK/ZLAB.US) 2022/2023Q1 - The True Colors and the Risks Behind

In the insight, we analyzed major investment logic flaws of Zai Lab. As we expected, the company's performance is not ideal. The license-in model...

Xinyao (Criss) Wang

China Healthcare Weekly (Sep.8)- 9th VBP, Reliable Profit Model of Biotech, Medlive, China's Outlook

9th national VBP has begun. We analyzed the impact on companies. 23H1 reports make us realize even with negative policy, China Biotech can still...

Xinyao (Criss) Wang

China Healthcare Weekly (Sep.1) - China's New IPO Reform, Financing Environment, Junshi Biosciences

CSRC issued new policies related to IPO reform in China.As IPO rules in A-share face adjustments, fundraising ecology will change.Junshi is far...

Xinyao (Criss) Wang

Quiddity HSCEI Sep 23 Flow Expectations Update: US$367mn One-Way, Beigene Vs Peers Interesting

I see BeiGene Ltd (6160 HK) as a high conviction ADD and Country Garden Services Holdings (6098 HK) as a high conviction DEL. Separately, I see...

Janaghan Jeyakumar, CFA

China/Asian TMT Update-9950HK/BGNE/9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK/BABA/SE-Special Audit

9926HK/BGNE/9995HK/ZLAB/1801HK/1877HK: National Audit Office's special audit on auditing Guangdong's pharmaceutical consumables showed breadth and...

Blue Lotus Research Institute

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