HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cansino-biologics-inc-cc0c90b7-e854-4ba3-929b-914be1bd0d89" target="_blank" data-smartkarma-citation="entities:32181:1" rel="noopener">CanSino Biologics Inc (688185 CH)'</a>s business has made some positive progress recently, including the launch of COVID-19 Vaccine for Inhalation, commercialization and development progress of MCV4/PCV13i, etc. </li>
<li>CanSino's technology platforms are very valuable and are above average level. Currently, there’re little potential domestic competitors, because CanSino’s products are newer, better and safer than domestic homogenized products.</li>
<li>Even based on conservative forecast, CanSino’s valuation in HKEX is “ridiculously low”. Considering the downside risk in HKEX, CanSino A-share could be better option before valuation in HKEX becomes reasonable.</li>
</ul>



CanSino Biologics Inc (688185 CH)'s business has made some positive progress recently, including the launch of COVID-19 Vaccine for Inhalation, commercialization and development progress of MCV4/PCV13i, etc. 
CanSino's technology platforms are very valuable and are above average level. Currently, there’re little potential domestic competitors, because CanSino’s products are newer, better and safer than domestic homogenized products.
Even based on conservative forecast, CanSino’s valuation in HKEX is “ridiculously low”. Considering the downside risk in HKEX, CanSino A-share could be better option before valuation in HKEX becomes reasonable.


CanSino Biologics Inc (688185.CH/6185.HK) - Some Positive Progress in Business

Equity Capital Markets

<ul>
<li>AIM needs to rely on both human rabies vaccine and HBV vaccine to contribute majority revenue,but the outlook is challenging. Their revenue would decline due to competition and product upgrading.</li>
<li>Most of AIM’s vaccine candidates are in early development stages. There’re many competing candidates in more advanced development stages.The pipeline lacks competitiveness and it's hard to generate forecasted profits.</li>
<li>Although the issue price is discounted significantly, AIM is still overvalued. Reducing the size of IPO to maintain a good share price doesn’t work. When investors exit,accumulated pressure will explode.</li>
</ul>


AIM needs to rely on both human rabies vaccine and HBV vaccine to contribute majority revenue,but the outlook is challenging. Their revenue would decline due to competition and product upgrading.
Most of AIM’s vaccine candidates are in early development stages. There’re many competing candidates in more advanced development stages.The pipeline lacks competitiveness and it's hard to generate forecasted profits.
Although the issue price is discounted significantly, AIM is still overvalued. Reducing the size of IPO to maintain a good share price doesn’t work. When investors exit,accumulated pressure will explode.


Pre-IPO AIM Vaccine - AIM Is Overvalued, with Uncompetitive Pipeline and Challenging Outlook

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>Allocations in Biotechnology stocks have taken a severe drop among active China A-Share investors.  </li>
<li>From a high of 4% in July of 2020, average fund weights have fallen to just 1.14% and average underweights have plunged towards their lowest level on record.</li>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a> has led the declines, as sentiment towards the China A-Share Biotechnology sector looks fragile.</li>
</ul>


Allocations in Biotechnology stocks have taken a severe drop among active China A-Share investors.  
From a high of 4% in July of 2020, average fund weights have fallen to just 1.14% and average underweights have plunged towards their lowest level on record.

Wuxi Biologics (2269 HK) has led the declines, as sentiment towards the China A-Share Biotechnology sector looks fragile.


Chongqing Zhifei Biological Products / Equity Bottom-Up

<ul>
<li>Under the current policy in China, any minor changes to vaccine doses require a series of clinical data support and registration changes. So, WHO’s recommendation won’t affect Zhifei’s short-term performance.</li>
<li>The increasing domestic competing HPV vaccines in the future would be a big threat to Zhifei’s agency business. Its self-developed products may not be strong enough to compensate. </li>
<li>The performance in 2022 is expected to be solid before real challenge comes in 2024. The valuation logic and outlook won’t be brighten unless there’s new breakthrough in agency business.</li>
</ul>


Under the current policy in China, any minor changes to vaccine doses require a series of clinical data support and registration changes. So, WHO’s recommendation won’t affect Zhifei’s short-term performance.
The increasing domestic competing HPV vaccines in the future would be a big threat to Zhifei’s agency business. Its self-developed products may not be strong enough to compensate. 
The performance in 2022 is expected to be solid before real challenge comes in 2024. The valuation logic and outlook won’t be brighten unless there’s new breakthrough in agency business.


Chongqing Zhifei Biological Products (300122.CH) - WHO's One-Dose HPV Vaccine Regimen & The Outlook

<ul>
<li>The first to be affected is the clinical trial projects under way in Ukraine. It’s possible that pharmaceutical companies may lose such a high-quality and low cost clinical trial center. </li>
<li>Ukraine plays an important role in the healthcare supply chain. So, the war would affected both pharmaceutical companies and medical device companies, both directly and indirectly.</li>
<li>The risk to CXO is not completely eliminated. The “cyclical nature” of CRO industry could begin to show. But CDMO is better than CRO in terms of short-term investment opportunities.</li>
</ul>


The first to be affected is the clinical trial projects under way in Ukraine. It’s possible that pharmaceutical companies may lose such a high-quality and low cost clinical trial center. 
Ukraine plays an important role in the healthcare supply chain. So, the war would affected both pharmaceutical companies and medical device companies, both directly and indirectly.
The risk to CXO is not completely eliminated. The “cyclical nature” of CRO industry could begin to show. But CDMO is better than CRO in terms of short-term investment opportunities.


Russia-Ukraine War: The Impact on China Healthcare

China

Shenzhen Kangtai Biological Products Co., Ltd. operates biological product manufacturing businesses. The Company produces biological vaccines and other vaccine products. Shenzhen Kangtai Biological Products conducts businesses in China.

Shenzhen Kangtai Biological Pr (300601 CH)

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Shenzhen Kangtai Biological Pr (300601 CH)

CanSino Biologics Inc (688185.CH/6185.HK) - Some Positive Progress in Business

Cansino has made positive progress in commercialization and R&D recently. We look forward to the performance of MCV4 in H2. Its valuation in HKEX...

Xinyao (Criss) Wang

Pre-IPO AIM Vaccine - AIM Is Overvalued, with Uncompetitive Pipeline and Challenging Outlook

AIM's products/pipeline are lack of competitiveness due to fierce competition and product upgrading, with gloomy outlook. Although the issue price...

Xinyao (Criss) Wang

China A-Shares: Biotechnology Exit

Allocations in Biotechnology stocks have taken a severe drop among active China A-Share investors. From a high of 4% in July of 2020, average fund...

Steven Holden

Chongqing Zhifei Biological Products (300122.CH) - WHO's One-Dose HPV Vaccine Regimen & The Outlook

WHO’s recommendation on HPV vaccines is not the biggest risk of Zhifei and won't affect short-term performance, but the valuation logic...

Xinyao (Criss) Wang

Russia-Ukraine War: The Impact on China Healthcare

We analyzed the potential impact of Russia-Ukraine war on China healthcare industry including the delay of clinical trial projects in Ukraine,...

Xinyao (Criss) Wang

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