HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Angelalign Technology  / Equity Bottom-Up

The IPO of <a href="https://www.smartkarma.com/entities/angelalign-technology-inc" target="_blank" data-smartkarma-citation="entities:31480:1" rel="noopener">Angelalign Technology (6699 HK)</a> was obviously very successful, with the share price hitting an all-time high of HK$490/share in June 2021. However, in the following months, Angelalign’s share price continued to fall and was closed at HK$318.8/share on Oct. 25, down about 35%. On the other hand, Angelalign released it 2021 interim report. The revenue in 2021/1H was RMB571 million, up 85.0% YoY, and the net profit was RMB95.7 million, up 55.8% YoY, indicating good growth momentum. This insight mainly analyzed some points about the business and the concerns that worth investors’ attention.

The IPO of Angelalign Technology (6699 HK) was obviously very successful, with the share price hitting an all-time high of HK$490/share in June 2021. However, in the following months, Angelalign’s share price continued to fall and was closed at HK$318.8/share on Oct. 25, down about 35%. On the other hand, Angelalign released it 2021 interim report. The revenue in 2021/1H was RMB571 million, up 85.0% YoY, and the net profit was RMB95.7 million, up 55.8% YoY, indicating good growth momentum. This insight mainly analyzed some points about the business and the concerns that worth investors’ attention.

Angelalign Technology (6699.HK) - Some Points Worth the Attention

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>Last week, seven provinces jointly decided to carry out centralized procurement of pacemakers.</li>
<li>The General Office of the State Council issued a document about the reform of the salary system in public hospitals.</li>
<li>In fact, for many companies in China, there is still a lack of “M&amp;A culture”.</li>
</ul>Company news: News about the updated progress on new drugs of <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 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> 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 1.33%, while CSI 300 increased 0.56% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Last week, seven provinces jointly decided to carry out centralized procurement of pacemakers.
The General Office of the State Council issued a document about the reform of the salary system in public hospitals.
In fact, for many companies in China, there is still a lack of “M&amp;A culture”.
Company news: News about the updated progress on new drugs of BeiGene Ltd (6160 HK), Innovent Biologics Inc (1801 HK) and InnoCare Pharma Ltd (9969 HK).Market review:Last week, stock price for healthcare sector in A share decreased 1.33%, while CSI 300 increased 0.56% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly (Oct.22) - VBP On Pacemakers, Salary System Reform, Lack of M&A Culture

Beijing Chunlizhengda Medical Instruments / Equity Bottom-Up

Beijing Chunlizhengda Medical Instruments

Different from <a href="https://www.smartkarma.com/entities/ak-medical-holdings-limited" target="_blank" data-smartkarma-citation="entities:23669:1" rel="noopener">AK Medical Holdings Limited (1789 HK)</a> who was a big domestic winner in the national centralized procurement of artificial joints this month with the whole product lines successfully included in the medical insurance catalogue, <a href="https://www.smartkarma.com/entities/beijing-chunlizhengda-medical-instruments-co-ltd" target="_blank" data-smartkarma-citation="entities:7568:1" rel="noopener">Beijing Chunlizhengda Medical Instruments (1858 HK)</a> lost the bidding of its important knee joint prosthesis products in this centralized procurement. The Company's share price fell for two consecutive trading days by 17% on Sep.15 and 8.21% on Sep.16. This insight mainly analyzed the potential impact of losing the bidding, the concerns and the business outlook of Chunlizhengda.

Different from AK Medical Holdings Limited (1789 HK) who was a big domestic winner in the national centralized procurement of artificial joints this month with the whole product lines successfully included in the medical insurance catalogue, Beijing Chunlizhengda Medical Instruments (1858 HK) lost the bidding of its important knee joint prosthesis products in this centralized procurement. The Company's share price fell for two consecutive trading days by 17% on Sep.15 and 8.21% on Sep.16. This insight mainly analyzed the potential impact of losing the bidding, the concerns and the business outlook of Chunlizhengda.

Chunlizhengda Medical Instruments (1858.HK) - The Concerns and the Outlook After Losing the Bidding

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 Capital Markets

Shanghai Bio-Heart Biological Technology / Equity Capital Markets

Shanghai Bio-heart Biological Technology is a China-based leading interventional cardiovascular device provider. It has two near commercial stage products and is looking to raise up to USD 200m via a Hong Kong listing.In our previous note, we looked at the company's two core products Bioheart and Iberis 2nd. Bioheart is a second generation bioresorbable DES that can be used in the PCI procedure. We think the DES segment is facing very intense competition from the early generation of DES that is non-bioresorbable as well as bioresorbable DES. As the price gap is huge, we are of the view that the product ramp-up will be slow and the patients will be sensitive to the pricing. Another near commercial stage product, Iberis 2nd, is used to treat uncontrollable hypertension. For this, there has been no commercialized product in the market as of now. The  technology aspect that it can help to reduce the blood pressure by ablating the nerve in the kidney artery is interesting but we are skeptical of the market potential given that this is unlikely to be included in the reimbursement list and the patient group has already been non-compliant to the medication. The company's management were mainly ex-employee from Microport Scientific, a leading international medical device player in China. It has a decent investor backing but we think it is short of blockbuster products.In this note, we provide our thoughts on the company's valuation.

Shanghai Bio-heart Biological Technology is a China-based leading interventional cardiovascular device provider. It has two near commercial stage products and is looking to raise up to USD 200m via a Hong Kong listing.In our previous note, we looked at the company's two core products Bioheart and Iberis 2nd. Bioheart is a second generation bioresorbable DES that can be used in the PCI procedure. We think the DES segment is facing very intense competition from the early generation of DES that is non-bioresorbable as well as bioresorbable DES. As the price gap is huge, we are of the view that the product ramp-up will be slow and the patients will be sensitive to the pricing. Another near commercial stage product, Iberis 2nd, is used to treat uncontrollable hypertension. For this, there has been no commercialized product in the market as of now. The  technology aspect that it can help to reduce the blood pressure by ablating the nerve in the kidney artery is interesting but we are skeptical of the market potential given that this is unlikely to be included in the reimbursement list and the patient group has already been non-compliant to the medication. The company's management were mainly ex-employee from Microport Scientific, a leading international medical device player in China. It has a decent investor backing but we think it is short of blockbuster products.In this note, we provide our thoughts on the company's valuation.

Shanghai Bio-Heart (上海百心安) Pre-IPO: Thoughts on Valuation

On April 28, <a href="https://www.smartkarma.com/entities/lepu-biopharma-co-ltd" target="_blank" data-smartkarma-citation="entities:33231:1" rel="noopener">Lepu Biopharma (LBP HK)</a>, a subsidiary of <a href="https://www.smartkarma.com/entities/lepu-medical-technology-a" target="_blank" data-smartkarma-citation="entities:16654:1" rel="noopener">Lepu Medical Technology A (300003 CH)</a>, submitted its application to the main board of the Hong Kong Stock Exchange for listing. Actually, many companies in the medical device industry are good at capital operation, such as M&amp;A or spin-off and listing, which has been reflected in the leading medical device companies such as <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> and <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>. However, Lepu Medical is the only one that enters the fields of both drugs and preparations, and according to the pipeline, the focus is not only on generic drugs, but also on biological drugs of higher competitive dimension (e.g. Lepu Biopharma is in this field.). It is also worth mentioning that this is the second company of Lepu factions to be listed in Hong Kong. The first one was <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">Pw Medtech (1358 HK)</a> (Zhang yue’e is Pu Zhongjie’s wife) and the share price has been very weak since its listing. So can Lepu Biopharma have a better performance?

On April 28, Lepu Biopharma (LBP HK), a subsidiary of Lepu Medical Technology A (300003 CH), submitted its application to the main board of the Hong Kong Stock Exchange for listing. Actually, many companies in the medical device industry are good at capital operation, such as M&amp;A or spin-off and listing, which has been reflected in the leading medical device companies such as Shenzhen Mindray Bio-Medical Electronics (300760 CH) and Microport Scientific (853 HK). However, Lepu Medical is the only one that enters the fields of both drugs and preparations, and according to the pipeline, the focus is not only on generic drugs, but also on biological drugs of higher competitive dimension (e.g. Lepu Biopharma is in this field.). It is also worth mentioning that this is the second company of Lepu factions to be listed in Hong Kong. The first one was Pw Medtech (1358 HK) (Zhang yue’e is Pu Zhongjie’s wife) and the share price has been very weak since its listing. So can Lepu Biopharma have a better performance?

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

China

Lepu Medical Technology (Beijing) Co., Ltd. develops, produces and sells medical devices and parts.  The Company also offers medical devices consulting services.  The company's products include stent system and blockage system.

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Lepu Medical Technology A (300003 CH)

Angelalign Technology (6699.HK) - Some Points Worth the Attention

This article analyzed Angelalign in terms of some points about business and concerns, such as fierce competition, product positioning,...

Xinyao (Criss) Wang

China Healthcare Weekly (Oct.22) - VBP On Pacemakers, Salary System Reform, Lack of M&A Culture

The article mainly analyzed the centralized procurement of pacemakers,a document of the salary system reform in public hospitals, and the lack of...

Xinyao (Criss) Wang

Chunlizhengda Medical Instruments (1858.HK) - The Concerns and the Outlook After Losing the Bidding

This article mainly analyzed Chunlizhengda in terms of the potential impact of losing the bidding on the hip joint prosthesis products, the...

Xinyao (Criss) Wang

Shanghai Bio-Heart (上海百心安) Pre-IPO: Thoughts on Valuation

We provide a pre-money based valuation for Shanghai Bio-heart listing. We forecast the sales for its BRS and RDN respectively. We would re-iterate...

Ke Yan, CFA, FRM

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

This article analyzed Lepu Biopharma in terms of its core product candidates in the pipeline, the challenges, concerns and future outlook for this...

Xinyao (Criss) Wang

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