Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 15th.</li>
<li>We estimate the weekly inflows to be US$5,038.2 million, led by industrials, consumer discretionary, consumer staples sectors.</li>
<li>We highlight flows for CATL, Wuliangye, China Tourism, Moutai, Midea.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 15th.
We estimate the weekly inflows to be US$5,038.2 million, led by industrials, consumer discretionary, consumer staples sectors.
We highlight flows for CATL, Wuliangye, China Tourism, Moutai, Midea.


Northbound Flows (Mar 15th): $5bn of Inflows Last Week

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Qyuns Therapeutics / Equity Capital Markets

<ul>
<li>The biggest concern here is the uncertain commercialization outlook of Qyuns’s pipeline, mainly due to both industry factors in the field of autoimmune and allergic diseases and Qyuns’s own problems.</li>
<li>Qyuns is overvalued. There're rumors that Qyuns was “not popular” in primary market when fundraising, perhaps due to Dr. Yu Guoliang’s past unsuccessful experience which made investors suffered losses before.</li>
<li>By reducing the size of IPO to maintain high share price, this IPO may “look successful”.Investors can seize this opportunity to take profits in time, but long-term hold isn't recommended.</li>
</ul>


The biggest concern here is the uncertain commercialization outlook of Qyuns’s pipeline, mainly due to both industry factors in the field of autoimmune and allergic diseases and Qyuns’s own problems.
Qyuns is overvalued. There're rumors that Qyuns was “not popular” in primary market when fundraising, perhaps due to Dr. Yu Guoliang’s past unsuccessful experience which made investors suffered losses before.
By reducing the size of IPO to maintain high share price, this IPO may “look successful”.Investors can seize this opportunity to take profits in time, but long-term hold isn't recommended.


Pre-IPO Qyuns Therapeutics (PHIP Updates) - Some Points Worth the Attention

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 8th.</li>
<li>We estimate the weekly outflows to be US$376.5 million, led by information technology, consumer discretionary, and offset by industrials, utilities, financials.</li>
<li>We highlight flows for China Yangtze Power, CATL, Tongwei, Foxconn Industrial Internet.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of March 8th.
We estimate the weekly outflows to be US$376.5 million, led by information technology, consumer discretionary, and offset by industrials, utilities, financials.
We highlight flows for China Yangtze Power, CATL, Tongwei, Foxconn Industrial Internet.


Northbound Flows (Mar 8th): China Yangtze Power, CATL, Tongwei, Foxconn Industrial Internet

Cloudbreak Pharma / Equity Capital Markets

<ul>
<li>Surgery is doctors’ first choice in many cases. Ophthalmic medical devices are also popular. Compared to the market size of ophthalmic surgeries/medical devices, market size of ophthalmic drugs is small.</li>
<li>Although CLOUDBREAK’s pipeline has the potential to become first-in-class/best-in-class therapies to address unmet medical needs, considering fierce competition, the real market opportunities for its drug candidates may be smaller-than-expected</li>
<li>In last funding round before the IPO, CLOUDBREAK was valued at US$469 million.Valuation of CLOUDBREAK should be lower than <a href="https://www.smartkarma.com/entities/ocumension-therapeutics" target="_blank" data-smartkarma-citation="entities:29140:1" rel="noopener">Ocumension Therapeutics</a>. So, premium space for IPO pricing may be limited.</li>
</ul>


Surgery is doctors’ first choice in many cases. Ophthalmic medical devices are also popular. Compared to the market size of ophthalmic surgeries/medical devices, market size of ophthalmic drugs is small.
Although CLOUDBREAK’s pipeline has the potential to become first-in-class/best-in-class therapies to address unmet medical needs, considering fierce competition, the real market opportunities for its drug candidates may be smaller-than-expected
In last funding round before the IPO, CLOUDBREAK was valued at US$469 million.Valuation of CLOUDBREAK should be lower than Ocumension Therapeutics. So, premium space for IPO pricing may be limited.


Pre-IPO Cloudbreak Pharma - The Business, the Concerns and the Outlook

Equity Bottom-Up

<ul>
<li>CMS's way of in-licensing products has shifted from CSO model to asset-purchase model so as to enhance control on the assets. But the transformation hasn’t been recognized by the market.     </li>
<li>Despite outstanding fundamentals, <a href="https://www.smartkarma.com/entities/china-medical-system-holdings" target="_blank" data-smartkarma-citation="entities:18736:1" rel="noopener">CMS</a>’s valuation remains low. Doubts about the Company's real R&amp;D capabilities/core competitiveness and the negative image due to past financial fraud could be the reasons.</li>
<li>CMS would encounter performance headwinds in 2023/2024 due to VBP, but revenue/profit growth is expected to pick up in 2025. It’s still a good defensive choice in a bear market.</li>
</ul>


CMS's way of in-licensing products has shifted from CSO model to asset-purchase model so as to enhance control on the assets. But the transformation hasn’t been recognized by the market.     
Despite outstanding fundamentals, CMS’s valuation remains low. Doubts about the Company's real R&amp;D capabilities/core competitiveness and the negative image due to past financial fraud could be the reasons.
CMS would encounter performance headwinds in 2023/2024 due to VBP, but revenue/profit growth is expected to pick up in 2025. It’s still a good defensive choice in a bear market.


China Medical System (867 HK) - A Wise Choice in a Bear Market

China

Jiangsu Hengrui Medicine Co., Ltd. develops, manufactures, and markets a variety of medicines and medicine packing materials. The Company's products include anti-tumor medicines, pain-killers, anti-infection medicines, aluminum foil, and other related products.

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Jiangsu Hengrui Medicine (600276 CH)

Northbound Flows (Mar 15th): $5bn of Inflows Last Week

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for CATL, Wuliangye, China Tourism, Moutai, Midea, Wuxi...

Ke Yan, CFA, FRM

Pre-IPO Qyuns Therapeutics (PHIP Updates) - Some Points Worth the Attention

Qyuns is overvalued due to gloomy commercialization outlook.Qyuns may even find it hard to recover the cost of pipeline. Investors could trade and...

Xinyao (Criss) Wang

Northbound Flows (Mar 8th): China Yangtze Power, CATL, Tongwei, Foxconn Industrial Internet

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for China Yangtze Power, CATL, Tongwei, Foxconn...

Ke Yan, CFA, FRM

Pre-IPO Cloudbreak Pharma - The Business, the Concerns and the Outlook

CLOUDBREAK is a promising niche player to address unmet medical needs, but market size of ophthalmic drugs is small with fierce competition....

Xinyao (Criss) Wang

China Medical System (867 HK) - A Wise Choice in a Bear Market

CMS's performance low point is 2023/2024, but high growth returns in 2025. Despite bad image due to past financial fraud, high dividend/strong...

Xinyao (Criss) Wang

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