HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>In the past few years, the investment business and M&amp;A of Viva accelerated based on a series of financing tools such as IPO/placement/convertible bonds. Thus, Viva's scale has grown rapidly.</li>
<li>Continuous decline in stock price ultimately triggered a "redemption crisis” for Viva’s convertible bonds.Although Viva resolved it by transferring equity in its CRO subsidiary, the prospects are still not optimistic.</li>
<li>Due to the downturn in innovative drug industry and deterioration of financing environment,whether the high valuation of Viva’s CRO business would be recognized by secondary market is a question mark.</li>
</ul>


In the past few years, the investment business and M&amp;A of Viva accelerated based on a series of financing tools such as IPO/placement/convertible bonds. Thus, Viva's scale has grown rapidly.
Continuous decline in stock price ultimately triggered a "redemption crisis” for Viva’s convertible bonds.Although Viva resolved it by transferring equity in its CRO subsidiary, the prospects are still not optimistic.
Due to the downturn in innovative drug industry and deterioration of financing environment,whether the high valuation of Viva’s CRO business would be recognized by secondary market is a question mark.


Viva Biotech Holdings (1873.HK) - The Restructuring Plan Would Not Turn Things Around

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 analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of June 16th.</li>
<li>We estimate the weekly inflows to be US$2,312.7 million, led by industrials, information technology, consumer discretionary sectors, and offset by financials, materials.</li>
<li>We highlight flows for CATL, Wuliangye, Moutai, Foxconn Industrial Internet, Midea, BYD, Sany Heavy, Luxshare Precision, Wuxi Apptec, Gree Electric Appliances, Longi Green, Ping An Insurance, Dahua.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of June 16th.
We estimate the weekly inflows to be US$2,312.7 million, led by industrials, information technology, consumer discretionary sectors, and offset by financials, materials.
We highlight flows for CATL, Wuliangye, Moutai, Foxconn Industrial Internet, Midea, BYD, Sany Heavy, Luxshare Precision, Wuxi Apptec, Gree Electric Appliances, Longi Green, Ping An Insurance, Dahua.


Northbound Flows (Jun 16th): CATL, Wuliangye, Moutai, Foxconn Industrial Internet, Midea, Gree

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/viva-biotech-holdings" target="_blank" data-smartkarma-citation="entities:27850:1" rel="noopener">Viva Biotech Holdings (1873 HK)</a> is raising RMB1.06 billion (~$150 million) through offloading ~24% of its equity interest in Viva Shanghai, the primary entity of the company's CRO business.</li>
<li>The consideration implies a revenue ratio and gross profit ratio of 4.90x and 11.04x, respectively. The ratios are at the similar level of the average ratios of other comparable peers.</li>
<li>Going ahead, Viva Biotech is planning to spin off its CRO business for separate listing in the A-shares market. IPO application is expected to be filed by June 30, 2024.</li>
</ul>



Viva Biotech Holdings (1873 HK) is raising RMB1.06 billion (~$150 million) through offloading ~24% of its equity interest in Viva Shanghai, the primary entity of the company's CRO business.
The consideration implies a revenue ratio and gross profit ratio of 4.90x and 11.04x, respectively. The ratios are at the similar level of the average ratios of other comparable peers.
Going ahead, Viva Biotech is planning to spin off its CRO business for separate listing in the A-shares market. IPO application is expected to be filed by June 30, 2024.


Viva Biotech Holdings (1873 HK): Fund Raising Through Offloading Stake in CRO Arm

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of June 9th.</li>
<li>We estimate the weekly inflows to be US$265.3 million, led by financials, consumer discretionary, industrials sectors, and offset by information technology, materials.</li>
<li>We highlight flows for Midea, China Pacific Insurance, Advanced Micro, Huatai Securities, Zhejiang Dahua Technology, Anhui Conch Cement, East Money Information, Asr Microelectronics, Wuliangye.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of June 9th.
We estimate the weekly inflows to be US$265.3 million, led by financials, consumer discretionary, industrials sectors, and offset by information technology, materials.
We highlight flows for Midea, China Pacific Insurance, Advanced Micro, Huatai Securities, Zhejiang Dahua Technology, Anhui Conch Cement, East Money Information, Asr Microelectronics, Wuliangye.


Northbound Flows (Jun 9th): Midea, China Pacific Insurance, Advanced Micro, Huatai Securities, Dahua

CStone Pharmaceuticals / Equity Bottom-Up

<ul>
<li>In the second half of this year, innovative device companies could be listed on the SSE STAR Market one after another, which is a systematic opportunity.</li>
<li>Shareholders' reduction in CXO will continue. Then, CXO could become a company mainly controlled by various funds, with the original owners all cashing out and leaving, such as WuXi AppTec. </li>
<li>We analyzed some key points of <a href="https://www.smartkarma.com/entities/cstone-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:27882:1" rel="noopener">CStone Pharmaceuticals (2616 HK)</a>. We remain conservative about the Company, and its stock price may continue to remain weak.</li>
</ul>


In the second half of this year, innovative device companies could be listed on the SSE STAR Market one after another, which is a systematic opportunity.
Shareholders' reduction in CXO will continue. Then, CXO could become a company mainly controlled by various funds, with the original owners all cashing out and leaving, such as WuXi AppTec. 
We analyzed some key points of CStone Pharmaceuticals (2616 HK). We remain conservative about the Company, and its stock price may continue to remain weak.


China Healthcare Weekly (Jun.2) - New Era for Medical Device, Shareholders' Reduction in CXO, Cstone

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)

Viva Biotech Holdings (1873.HK) - The Restructuring Plan Would Not Turn Things Around

Viva carried out internal restructuring and resolved "redemption crisis” for its convertible bonds by transferring equity in CRO subsidiary....

Xinyao (Criss) Wang

Northbound Flows (Jun 16th): CATL, Wuliangye, Moutai, Foxconn Industrial Internet, Midea, Gree

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for CATL, Wuliangye, Moutai, Foxconn Industrial...

Ke Yan, CFA, FRM

Viva Biotech Holdings (1873 HK): Fund Raising Through Offloading Stake in CRO Arm

Viva Biotech is raising $150M through offloading 24% of its equity interest in Viva Shanghai, the company's CRO business. Going ahead, the company...

Tina Banerjee

Northbound Flows (Jun 9th): Midea, China Pacific Insurance, Advanced Micro, Huatai Securities, Dahua

We analyzed the Shanghai/Shenzhen Connect Scheme for last week and highlight flows for Midea, China Pacific Insurance, Advanced Micro, Huatai...

Ke Yan, CFA, FRM

China Healthcare Weekly (Jun.2) - New Era for Medical Device, Shareholders' Reduction in CXO, Cstone

After A-share released new IPO policy, systematic opportunity for medical device comes.Shareholders' reduction in CXO will continue,leading...

Xinyao (Criss) Wang

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