HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Abrocitinib/Upadacitinib/Dupilumab will all exert great pressure on the future commercialization space of CM310 in China. If Keymed doesn't run head-to-head trials with dupilumab, CM310’s internationalization outlook would be gloomy.</li>
<li>Compared with IL-4 that has been almost occupied by dupilumab, Keymed has more opportunity on TSLP. Even with Keymed-AstraZeneca deal, our valuation of CMG901 is cautious based on our analysis. </li>
<li>The current valuation of Keymed is not cheap. The next big catalyst to share price is a new license-out deal with MNC on CM310/CM326, marking the beginning of qualitative changes. </li>
</ul>


Abrocitinib/Upadacitinib/Dupilumab will all exert great pressure on the future commercialization space of CM310 in China. If Keymed doesn't run head-to-head trials with dupilumab, CM310’s internationalization outlook would be gloomy.
Compared with IL-4 that has been almost occupied by dupilumab, Keymed has more opportunity on TSLP. Even with Keymed-AstraZeneca deal, our valuation of CMG901 is cautious based on our analysis. 
The current valuation of Keymed is not cheap. The next big catalyst to share price is a new license-out deal with MNC on CM310/CM326, marking the beginning of qualitative changes. 


Keymed Biosciences (2162.HK) - Looking Forward to the Next Leap in Valuation

China Resources Medical / Equity Bottom-Up

<ul>
<li>Investors should be aware of the increasing prices of TCM raw materials, which could lead to fluctuations in profit margins of TCM companies. Investors should prepare for these potential impacts.</li>
<li>After years of “fast-follow”, we’ve finally seen products from Chinese pharmaceutical companies stand at the center of the stage for the first time in the new generation of ADC.</li>
<li>China Resources Medical's profitability outlook is not promising due to issues within the Chinese healthcare system. The bottom line is P/B above 1 and P/E above 10x.</li>
</ul>


Investors should be aware of the increasing prices of TCM raw materials, which could lead to fluctuations in profit margins of TCM companies. Investors should prepare for these potential impacts.
After years of “fast-follow”, we’ve finally seen products from Chinese pharmaceutical companies stand at the center of the stage for the first time in the new generation of ADC.
China Resources Medical's profitability outlook is not promising due to issues within the Chinese healthcare system. The bottom line is P/B above 1 and P/E above 10x.


China Healthcare Weekly (Jun.30) - TCM Companies Witness Soaring Costs, Rising Stars in ADC, 1515.HK

<ul>
<li>Retail pharmacies experienced performance decline in April and May. Due to negative policies, retail pharmacies will experience industry clearance. Therefore, we do not recommend investors to bottom-fish related stocks now.</li>
<li>There is a logic to biotech's performance from 2023 to present.The clearer the path of sustainable development, the better the stock price performance. They can be divided into three types.</li>
<li>YSB faces big risks and the outlook is not optimistic. If the final valuation of the Company is lower than <a href="https://www.smartkarma.com/entities/china-resources-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:22928:1" rel="noopener">China Resources Pharmaceutical</a> and <a href="https://www.smartkarma.com/entities/shanghai-pharmaceuticals-holding" target="_blank" data-smartkarma-citation="entities:228:1" rel="noopener">Shanghai Pharmaceuticals</a>, we wouldn't be too surprised.</li>
</ul>


Retail pharmacies experienced performance decline in April and May. Due to negative policies, retail pharmacies will experience industry clearance. Therefore, we do not recommend investors to bottom-fish related stocks now.
There is a logic to biotech's performance from 2023 to present.The clearer the path of sustainable development, the better the stock price performance. They can be divided into three types.
YSB faces big risks and the outlook is not optimistic. If the final valuation of the Company is lower than China Resources Pharmaceutical and Shanghai Pharmaceuticals, we wouldn't be too surprised.


China Healthcare Weekly (Jun23)-Retail Pharmacy's Dilemma, Logic to Biotech's Stock Price,YSB's Risk

Sichuan Kelun-Biotech Biopharm / Equity Bottom-Up

<ul>
<li>Since IPO, stock price of Kelun-Biotech has performed quite well. Then, the Company's valuation fluctuated. Investors seem not excited about <a href="https://www.smartkarma.com/entities/sichuan-kelun-biotech-biopharm" target="_blank" data-smartkarma-citation="entities:40071:1" rel="noopener">Sichuan Kelun-Biotech Biopharm (6990 HK)</a>’s 23H1 performance.</li>
<li>We won’t expect too much on A166 in such a difficult competitive landscape.Commercialization of SKB264 is also challenging.It's difficult to make up the story after A166/SKB264 begin to generate revenue.</li>
<li>After out-licensing all valuable/core assets to Merck, together with the departure of core R&amp;D personnel, Kelun-Biotech has been “hollowed out”.So, Kelun-Biotech's value lies in short-term trade rather than long-term hold.</li>
</ul>


Since IPO, stock price of Kelun-Biotech has performed quite well. Then, the Company's valuation fluctuated. Investors seem not excited about Sichuan Kelun-Biotech Biopharm (6990 HK)’s 23H1 performance.
We won’t expect too much on A166 in such a difficult competitive landscape.Commercialization of SKB264 is also challenging.It's difficult to make up the story after A166/SKB264 begin to generate revenue.
After out-licensing all valuable/core assets to Merck, together with the departure of core R&amp;D personnel, Kelun-Biotech has been “hollowed out”.So, Kelun-Biotech's value lies in short-term trade rather than long-term hold.


Sichuan Kelun-Biotech Biopharm (6990.HK) - Once the Products Hit the Market, Good Story May Stop

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

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

<ul>
<li>C1Q24 was marked by liquidity crises in innovative drug and medical device, and depressed margin in digital health. We believe this is a buying opportunity;</li>
<li>PD-1 has recovered nicely in C2H23 and exceeded our expectation made for 2023.We forecast 20% YoY growth in 2024.Further,pipeline maturity has led to new drugs in autoimmune and metabolic drugs;</li>
<li>Biosimilar has proven to be part of the solution to deal with low paying ability of Chinese healthcare and denial of access to the high paying US healthcare market. </li>
</ul>


C1Q24 was marked by liquidity crises in innovative drug and medical device, and depressed margin in digital health. We believe this is a buying opportunity;
PD-1 has recovered nicely in C2H23 and exceeded our expectation made for 2023.We forecast 20% YoY growth in 2024.Further,pipeline maturity has led to new drugs in autoimmune and metabolic drugs;
Biosimilar has proven to be part of the solution to deal with low paying ability of Chinese healthcare and denial of access to the high paying US healthcare market. 


[Blue Lotus Healthcare Sector Update]: Bottom-Fishing at the Bottom of the Business Cycle

Hong Kong

Keymed Biosciences Inc. operates a biotechnology company. The Company focus on the in-house discovery and development of innovative biological therapies. Keymed Biosciences provides services in China.

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Keymed Biosciences (2162 HK)