HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Microport Cardioflow Medtech / Equity Capital Markets

On November 6th, <a href="https://www.smartkarma.com/entities/microport-cardioflow-medtech-corporation" target="_blank" data-smartkarma-citation="entities:31084:1" rel="noopener">MicroPort CardioFlow (1844972D HK)</a> applied to the Hong Kong Stock Exchange for listing on the main board. Different from the previous innovative pharmaceutical companies, MicroPort CardioFlow belongs to the innovative medical device industry, mainly involved in the field of valvular heart diseases. Compared with <a href="https://www.smartkarma.com/entities/venus-medtech-hangzhou-inc" target="_blank" data-smartkarma-citation="entities:28257:1" rel="noopener">Venus MedTech (2500 HK)</a>, Suzhou Jiecheng Medical Technology and <a href="https://www.smartkarma.com/entities/peijia-medical" target="_blank" data-smartkarma-citation="entities:28862:1" rel="noopener">Peijia Medical (9996 HK)</a>, is MicroPort CardioFlow a better candidate of the TAVR market in China?

On November 6th, MicroPort CardioFlow (1844972D HK) applied to the Hong Kong Stock Exchange for listing on the main board. Different from the previous innovative pharmaceutical companies, MicroPort CardioFlow belongs to the innovative medical device industry, mainly involved in the field of valvular heart diseases. Compared with Venus MedTech (2500 HK), Suzhou Jiecheng Medical Technology and Peijia Medical (9996 HK), is MicroPort CardioFlow a better candidate of the TAVR market in China?

Pre-IPO MicroPort CardioFlow - A Better Candidate of the TAVR Market in China?

Thematic (Sector/Industry)

1. Industry viewpoints:<ul>
<li>The continuous promotion of medical insurance fee control policies such as DRG is conductive to the development of China ICL industry in the future.</li>
<li>For the TAVR industry, the domestic market is still in the early stage of growth, but with a lot of potential in the future.</li>
<li>With the aggravation of population aging and government incentive policies (such as the two-child policy), the assisted reproductive industry in China has been attracting much attention due to its low penetration rate and high gross profit.</li>
</ul>2. Company news:News about the registration of COVID-19 vaccine, updated progress of new drugs and the new agreement of innovative technology platform from <a href="https://www.smartkarma.com/entities/sinopharm-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:32:1" rel="noopener">Sinopharm Group Co Ltd H (1099 HK)</a>, <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, <a href="https://www.smartkarma.com/entities/peijia-medical" target="_blank" data-smartkarma-citation="entities:28862:1" rel="noopener">Peijia Medical (9996 HK)</a> and Biocytogen.3. Market review:Last week, stock price for healthcare sector in A share decreased 2.14%, while CSI 300 decreased 3.48% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1. Industry viewpoints:
The continuous promotion of medical insurance fee control policies such as DRG is conductive to the development of China ICL industry in the future.
For the TAVR industry, the domestic market is still in the early stage of growth, but with a lot of potential in the future.
With the aggravation of population aging and government incentive policies (such as the two-child policy), the assisted reproductive industry in China has been attracting much attention due to its low penetration rate and high gross profit.
2. Company news:News about the registration of COVID-19 vaccine, updated progress of new drugs and the new agreement of innovative technology platform from Sinopharm Group Co Ltd H (1099 HK), Shanghai Henlius Biotech (2696 HK), Peijia Medical (9996 HK) and Biocytogen.3. Market review:Last week, stock price for healthcare sector in A share decreased 2.14%, while CSI 300 decreased 3.48% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Member of the Hang Seng Composite Index (HSCI) are included in the Southbound Stock Connect program if their market cap exceeds HK$5bn. However, Secondary Listings and Biotech stocks that listed under Chapter 18A of the Listing Rules were excluded from the Stock Connect program.This headline "*H.K. TO INCLUDE SECONDARY-LISTED COS IN STOCK CONNECT: SING TAO" could drive stocks that are HSCI members but not a part of Stock Connect higher. If Chapter 18A listed Biotech stocks are added to Stock Connect, they could run even more.In this Insight, we take a look at stocks that are a part of the HSCI or are expected to join the HSCI in the next review and could be eligible to be included in the Stock Connect program.

Member of the Hang Seng Composite Index (HSCI) are included in the Southbound Stock Connect program if their market cap exceeds HK$5bn. However, Secondary Listings and Biotech stocks that listed under Chapter 18A of the Listing Rules were excluded from the Stock Connect program.This headline "*H.K. TO INCLUDE SECONDARY-LISTED COS IN STOCK CONNECT: SING TAO" could drive stocks that are HSCI members but not a part of Stock Connect higher. If Chapter 18A listed Biotech stocks are added to Stock Connect, they could run even more.In this Insight, we take a look at stocks that are a part of the HSCI or are expected to join the HSCI in the next review and could be eligible to be included in the Stock Connect program.

Stock Connect - Secondary Listings and Biotech Stocks to Become Eligible?

Shimao Services Holdings Limited / Event-Driven

Hang Seng Indexes Company (HSIL) reviews the constituents of the Hang Seng Composite Index (HSCI) on a half yearly basis in March and September with data cut-off dates as of the end of December and June. The review announcement for the March 2021 review should be made on 12 February and will be effective after the close of trading on 5 March.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors.Secondary Listings and Biotech stocks listed under Chapter 18A of the Listing Rules are not eligible for inclusion in the Stock Connect program.There are a lot of stocks that will join the HSCI and subsequently included as a part of the Southbound Stock Connect program - these stocks will see buying from mainland investors and could outperform their peers and the market.There are stocks that will be deleted from the HSCI and consequently deleted from the Southbound Stock Connect buy list. There are other stocks that will remain a part of the HSCI but will be removed from the Southbound Stock Connect buy list since their average market cap drops below HKD 5bn.Read on for more details and stocks affected by the changes.

Hang Seng Indexes Company (HSIL) reviews the constituents of the Hang Seng Composite Index (HSCI) on a half yearly basis in March and September with data cut-off dates as of the end of December and June. The review announcement for the March 2021 review should be made on 12 February and will be effective after the close of trading on 5 March.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors.Secondary Listings and Biotech stocks listed under Chapter 18A of the Listing Rules are not eligible for inclusion in the Stock Connect program.There are a lot of stocks that will join the HSCI and subsequently included as a part of the Southbound Stock Connect program - these stocks will see buying from mainland investors and could outperform their peers and the market.There are stocks that will be deleted from the HSCI and consequently deleted from the Southbound Stock Connect buy list. There are other stocks that will remain a part of the HSCI but will be removed from the Southbound Stock Connect buy list since their average market cap drops below HKD 5bn.Read on for more details and stocks affected by the changes.

HSCI Index Rebalance and Stock Connect: Early Look at Potential Changes

1.Industry viewpoints:<ul>
<li>Recently, the National Medical Products Administration has released a new policy (draft version) about the online drug sales.</li>
<li>Vaccine is a hot topic in 2020, so let’s talk about vaccine.</li>
<li>The upsurge in the application of AI in medical imaging in China provides a new direction for the development, which may be the most promising field for China to surpass foreign countries.</li>
</ul>2. Company news:News about the updated progress of new drugs and the marketing approval of new products from <a href="https://www.smartkarma.com/entities/betta-pharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:25883:1" rel="noopener">Betta Pharmaceuticals (300558 CH)</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> , Kangpu Biopharmaceuticals, and <a href="https://www.smartkarma.com/entities/venus-medtech-hangzhou-inc" target="_blank" data-smartkarma-citation="entities:28257:1" rel="noopener">Venus MedTech (2500 HK).</a>3. Market review:Last week, stock price for healthcare sector in A share decreased 1.43%, while CSI 300 increased 1.78% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1.Industry viewpoints:
Recently, the National Medical Products Administration has released a new policy (draft version) about the online drug sales.
Vaccine is a hot topic in 2020, so let’s talk about vaccine.
The upsurge in the application of AI in medical imaging in China provides a new direction for the development, which may be the most promising field for China to surpass foreign countries.
2. Company news:News about the updated progress of new drugs and the marketing approval of new products from Betta Pharmaceuticals (300558 CH), BeiGene Ltd (6160 HK) , Kangpu Biopharmaceuticals, and Venus MedTech (2500 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 1.43%, while CSI 300 increased 1.78% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China

Venus MedTech (HangZhou) Inc. develops and sells cardiovascular devices. The Company offers products including aorta, compression loading and conveying systems, and pulmonary artery. Venus MedTech (HangZhou) markets its products throughout China.

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Venus MedTech (2500 HK)

Pre-IPO MicroPort CardioFlow - A Better Candidate of the TAVR Market in China?

This article analyzed the market potential of TAVR in China, competition pattern of key players, financial position of MicroPort CardioFlow and...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.11)

The article analyzed industry viewpoints about China ICL industry, TAVR industry and the assisted reproductive industry, and also included...

Xinyao (Criss) Wang

Stock Connect - Secondary Listings and Biotech Stocks to Become Eligible?

A rule change that admits Secondary listings and Chapter 18A listed Biotech stocks to the Southbound Stock Connect could see Alibaba, JD and...

Brian Freitas

HSCI Index Rebalance and Stock Connect: Early Look at Potential Changes

While the HSCI does not have assets benchmarked to it, the index review is closely watched since the index forms the basis of stocks that are a...

Brian Freitas

China Healthcare Weekly (Nov. 20)

The article summarized the new healthcare policy released, major industry viewpoints, company news and capital market review in China healthcare...

Xinyao (Criss) Wang

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