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.

Equity Bottom-Up

Jinxin Fertility Group  / Equity Bottom-Up

China's Politburo hosted a meeting on May 31st to review the population policy (关于优化生育政策促进人口长期均衡发展的决定, hereafter Decision). The meeting pointed out that allowing couples to have third child will improve the demographic structure of China to counter the aging population. The meeting also mentioned that the government will start to implement policies to encourage the third child, with social and economic support. In this note, I take a brief look at the China's past child birth policy changes and three beneficiaries of the new birth policy. I am of the view that the benefit of the new policy will be marginal but the direction is plausible.

China's Politburo hosted a meeting on May 31st to review the population policy (关于优化生育政策促进人口长期均衡发展的决定, hereafter Decision). The meeting pointed out that allowing couples to have third child will improve the demographic structure of China to counter the aging population. The meeting also mentioned that the government will start to implement policies to encourage the third child, with social and economic support. In this note, I take a brief look at the China's past child birth policy changes and three beneficiaries of the new birth policy. I am of the view that the benefit of the new policy will be marginal but the direction is plausible. 

China: 3rd Child Policy and 3 Beneficiaries

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>Recently, the results of the 7th demographic census was released, which is expected to drive the demand of the assisted reproduction industry.</li>
<li>The Ministry of Commerce, the State Administration of Traditional Chinese Medicine (TCM) and other seven departments jointly issued an announcement to support the development of TCM service trade and the promotion of TCM going global.</li>
<li>The room for import substitution in China chromatography packing/chromatographic medium industry would be very large.</li>
</ul>Company news:News about the updated progress on drugs and acquisition of <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical Electronics (300760 CH)</a>, <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a> and <a href="https://www.smartkarma.com/entities/innocare-pharma-ltd" target="_blank" data-smartkarma-citation="entities:28355:1" rel="noopener">InnoCare Pharma Ltd (9969 HK)</a>.Market review:Last week, stock price for healthcare sector in A share decreased 0.69%, while CSI 300 increased 0.46% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Recently, the results of the 7th demographic census was released, which is expected to drive the demand of the assisted reproduction industry.
The Ministry of Commerce, the State Administration of Traditional Chinese Medicine (TCM) and other seven departments jointly issued an announcement to support the development of TCM service trade and the promotion of TCM going global.
The room for import substitution in China chromatography packing/chromatographic medium industry would be very large.
Company news:News about the updated progress on drugs and acquisition of Innovent Biologics Inc (1801 HK), Shenzhen Mindray Bio-Medical Electronics (300760 CH), Everest Medicines (1952 HK) and InnoCare Pharma Ltd (9969 HK).Market review:Last week, stock price for healthcare sector in A share decreased 0.69%, while CSI 300 increased 0.46% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

<div>
Jinxin Fertility reported its results over the weekend and hosted a conference call in the morning today. We attended the conference call with positive takeaways. While the results fell below the consensus estimates, we believe that its long-term fundamentals are intact. The company's business will fire in all cylinders after international travel restrictions are lifted. We believe that the recent share weakness was mainly due to the risk-off sentiment in the market, particularly by the Chinese southbound investors. We believe that the demands for IVF services are secular and the moat is wide. We will accumulate the stock as a long-term holding.
<div><h2>Our previous coverage on Jinxin Fertility</h2></div>
<div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/jinxin-fertility-pre-ipo-strong-foothold-in-sichuan-but-weak-sentiment-for-sector" target="_blank" rel="noopener">Jinxin Fertility (锦欣生殖) Pre-IPO: Strong Foothold in Sichuan but Weak Sentiment for Sector</a></li>
<li><a href="https://www.smartkarma.com/insights/jinxin-fertility-ipo-worth-a-look-given-the-sector-existing-shareholders-and-cornerstone" target="_blank" rel="noopener">Jinxin Fertility (锦欣生殖) IPO - Worth a Look Given the Sector, Existing Shareholders and Cornerstone</a></li>
<li><a href="https://www.smartkarma.com/insights/jinxin-fertility-post-ipo-trading-fairly-valued" target="_blank" rel="noopener">Jinxin Fertility (锦欣生殖) Post-IPO Trading: Fairly Valued</a></li>
<li><a href="https://www.smartkarma.com/insights/jinxin-fertility-placement-a-good-point-of-entry" target="_blank" rel="noopener">Jinxin Fertility (锦欣生殖) Placement - A Good Point of Entry</a></li>
<li><a href="https://www.smartkarma.com/insights/bottom-fishing-idea-jinxin-fertility-ivf-story-intact" target="_blank" rel="noopener">Bottom Fishing Idea - Jinxin Fertility: IVF Story Intact</a></li>
</ul></div>
</div>


Jinxin Fertility reported its results over the weekend and hosted a conference call in the morning today. We attended the conference call with positive takeaways. While the results fell below the consensus estimates, we believe that its long-term fundamentals are intact. The company's business will fire in all cylinders after international travel restrictions are lifted. We believe that the recent share weakness was mainly due to the risk-off sentiment in the market, particularly by the Chinese southbound investors. We believe that the demands for IVF services are secular and the moat is wide. We will accumulate the stock as a long-term holding.
Our previous coverage on Jinxin Fertility

Jinxin Fertility (锦欣生殖) Pre-IPO: Strong Foothold in Sichuan but Weak Sentiment for Sector
Jinxin Fertility (锦欣生殖) IPO - Worth a Look Given the Sector, Existing Shareholders and Cornerstone
Jinxin Fertility (锦欣生殖) Post-IPO Trading: Fairly Valued
Jinxin Fertility (锦欣生殖) Placement - A Good Point of Entry
Bottom Fishing Idea - Jinxin Fertility: IVF Story Intact



Jinxin Fertility: Long Term IVF Story Intact Despite Potential Post Results De-Rating

1. Industry viewpoints:<ul>
<li>In response to the rising incidence of infertility in recent years, the Central Committee of the China Democratic League plans to submit a proposal during the Two Sessions in March this year.</li>
<li>China's market for orphan drugs has huge potential and still remains untapped.</li>
<li>At present, in the domestic market of neurointerventional devices, multinational enterprises occupy the dominant position, and the overall scale of domestic enterprises is not large. The main reason is their product development strategy.</li>
</ul>2. Company news: News about the new acquisition and updated progress of new drugs from <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>, <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a> and <a href="https://www.smartkarma.com/entities/akeso-biopharma-inc" target="_blank" data-smartkarma-citation="entities:28830:1" rel="noopener">Akeso Biopharma Inc (9926 HK)</a>. 3. Market review:Last week, stock price for healthcare sector in A share decreased 2.1%, while CSI 300 decreased 1.39% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:
In response to the rising incidence of infertility in recent years, the Central Committee of the China Democratic League plans to submit a proposal during the Two Sessions in March this year.
China's market for orphan drugs has huge potential and still remains untapped.
At present, in the domestic market of neurointerventional devices, multinational enterprises occupy the dominant position, and the overall scale of domestic enterprises is not large. The main reason is their product development strategy.
2. Company news: News about the new acquisition and updated progress of new drugs from WuXi AppTec Co. Ltd. (2359 HK), Innovent Biologics Inc (1801 HK), BeiGene Ltd (6160 HK) and Akeso Biopharma Inc (9926 HK). 3. Market review:Last week, stock price for healthcare sector in A share decreased 2.1%, while CSI 300 decreased 1.39% over the same period of time.4. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Since 2016, the number of new births in China has continued to decline, raising public debate on whether the population policy needs to be adjusted. The National Health Commission has made a clear response recently, saying that Northeast China "can explore" to take the lead in fully liberalizing birth restrictions, and <a href="https://www.smartkarma.com/entities/jinxin-fertility-group-ltd" target="_blank" data-smartkarma-citation="entities:28003:1" rel="noopener">Jinxin Fertility Co Ltd (1951 HK)</a>, a leading ARS provider in China and the United States, is undoubtedly one of the beneficiaries of related policy. Recently, Jinxin reached a record high of HK$23.65, with a current market value of about HK$57.8 billion, and the stock has been increased about 45% this year.

Since 2016, the number of new births in China has continued to decline, raising public debate on whether the population policy needs to be adjusted. The National Health Commission has made a clear response recently, saying that Northeast China "can explore" to take the lead in fully liberalizing birth restrictions, and Jinxin Fertility Co Ltd (1951 HK), a leading ARS provider in China and the United States, is undoubtedly one of the beneficiaries of related policy. Recently, Jinxin reached a record high of HK$23.65, with a current market value of about HK$57.8 billion, and the stock has been increased about 45% this year.

Jinxin Fertility (1951.HK) - The New Policy, the Logic and the Risk Factors

China

Jinxin Fertility Group Limited provides assisted reproductive services. The Company offers vitro fertilization services, embryo transfer services, management services, and other services. Jinxin Fertility Group also provides ancillary medical services.

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Jinxin Fertility Group (1951 HK)

China: 3rd Child Policy and 3 Beneficiaries

I take a brief look at the China's past child birth policy changes and three beneficiaries of the exposure to the new birth policy.

Ke Yan, CFA, FRM

China Healthcare Weekly (May.21)

The article analyzed the results and potential impact of the 7th demographic census,new policy on TCM market,insights on China chromatography...

Xinyao (Criss) Wang

Jinxin Fertility: Long Term IVF Story Intact Despite Potential Post Results De-Rating

We believe that the recent share weakness was mainly due to the risk-off sentiment in the market. Demands for IVF services are secular and the moat...

Ke Yan, CFA, FRM

China Healthcare Weekly (Mar.5)

The article analyzed a new proposal about China infertility, domestic market for orphan drugs, neurointerventional devices, news about WuXi AppTec,...

Xinyao (Criss) Wang

Jinxin Fertility (1951.HK) - The New Policy, the Logic and the Risk Factors

This article analyzed Jinxin Fertility in terms of the industry characteristics (entry barrier), business model (expansion mode, talent, merger and...

Xinyao (Criss) Wang

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