HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>The message WuXi AppTec hopes to convey in 24H1 report is that the Company isn’t losing orders/customers due to BIOSECURE Act and from 2025 it will return to high growth. </li>
<li>TIDES business growth is below expectations. Whether WuXi AppTec's performance can be reversed is no longer solely depends on fundamentals/industry cycles, but on whether geopolitical risks can be fully resolved.</li>
<li>Regardless of the outcome of 2024 presidential election, securing US supply chain is a already bipartisan consensus. If any Bill does pass in the future, valuation will plummet again.</li>
</ul>


The message WuXi AppTec hopes to convey in 24H1 report is that the Company isn’t losing orders/customers due to BIOSECURE Act and from 2025 it will return to high growth. 
TIDES business growth is below expectations. Whether WuXi AppTec's performance can be reversed is no longer solely depends on fundamentals/industry cycles, but on whether geopolitical risks can be fully resolved.
Regardless of the outcome of 2024 presidential election, securing US supply chain is a already bipartisan consensus. If any Bill does pass in the future, valuation will plummet again.


WuXi AppTec (2359.HK/603259.CH) 24H1- Backlog Looks Good but It May Not Bring a Performance Reversal

<ul>
<li>Due to increasing competition/price reduction/overcapacity issue, outlook of domestic vaccine companies isn't optimistic, which has been reflected in 24Q1 results. However, there’s also a "special one" that deserves investors' attention.</li>
<li>The status of medical insurance funds is improving rather than deteriorating, but we’re currently in the first half of the decade with the highest pressure on medical insurance.</li>
<li>As the H.R.8333 proposal faced obstacles in the process of being included in NDAA, WuXi AppTec/WuXi Bio’s shares once rebounded.We remain conservative as situation is not as simple as imagined.</li>
</ul>


Due to increasing competition/price reduction/overcapacity issue, outlook of domestic vaccine companies isn't optimistic, which has been reflected in 24Q1 results. However, there’s also a "special one" that deserves investors' attention.
The status of medical insurance funds is improving rather than deteriorating, but we’re currently in the first half of the decade with the highest pressure on medical insurance.
As the H.R.8333 proposal faced obstacles in the process of being included in NDAA, WuXi AppTec/WuXi Bio’s shares once rebounded.We remain conservative as situation is not as simple as imagined.


China Healthcare Weekly (Jun16)-WuXi Get A "Reprieve", Vaccine Company in Trouble, Insurance Surplus

<ul>
<li>The growth of TIDES business slowed down, and revenue decreased QoQ despite increasing production capacity.As the main growth point of WuXi AppTec’s future performance, this is not a good signal.</li>
<li>Due to BIOSECURE Act, US companies have been negotiating with other contract manufacturers so as to reduce reliance on WuXi AppTec.Let’s see the situation of new orders in following quarters.</li>
<li>WuXi AppTec’s performance recovery is closely related to the pace of Fed's interest rate cuts. From the perspective of growth outlook/macro environment/geopolitical conflicts, WuXi AppTec is still in "dangerous period".</li>
</ul>


The growth of TIDES business slowed down, and revenue decreased QoQ despite increasing production capacity.As the main growth point of WuXi AppTec’s future performance, this is not a good signal.
Due to BIOSECURE Act, US companies have been negotiating with other contract manufacturers so as to reduce reliance on WuXi AppTec.Let’s see the situation of new orders in following quarters.
WuXi AppTec’s performance recovery is closely related to the pace of Fed's interest rate cuts. From the perspective of growth outlook/macro environment/geopolitical conflicts, WuXi AppTec is still in "dangerous period".


WuXi AppTec (2359.HK/603259.CH) - The Pain of 2024 Has Just Begun

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.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 150 stocks over the last week.</li>
<li>The average A-H premium was 85.0% as of Mar 28th. The average A-H premium changed by 1.8ppt week-on-week, led by real estate, communication services, financials.</li>
<li>We highlight weekly changes in A-H premium for Great Wall Motor, China Oilfield Services, Tsingtao Brewery, Cmoc, Xinhua Winshare Publishing And Media.</li>
</ul>


We analyse the changes of A-H premium on 150 stocks over the last week.
The average A-H premium was 85.0% as of Mar 28th. The average A-H premium changed by 1.8ppt week-on-week, led by real estate, communication services, financials.
We highlight weekly changes in A-H premium for Great Wall Motor, China Oilfield Services, Tsingtao Brewery, Cmoc, Xinhua Winshare Publishing And Media.


A-H Premium Weekly (Mar 28th): Great Wall Motor, China Oilfield Services, Tsingtao Brewery, Cmoc

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Mar 21st.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Trip.Com, Zto Express, Wuxi Apptec, Anta Sports, Midea.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Mar 21st.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Trip.Com, Zto Express, Wuxi Apptec, Anta Sports, Midea.


HK Short Interest Weekly: Trip.Com, Zto Express, Wuxi Apptec, Anta Sports, Midea

China

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (2359 HK)