HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Pharmaron’s disappointing 2022 performance is just a start.Its business layout has always been "one step behind". CGT cannot become the main cornerstone business supporting valuation growth for the next stage.</li>
<li>The overall environment of CXO is different from that of the past. Even if Pharmaron finally achieves end-to-end integration,whether the prosperity of CXO industry still exists is a question mark.</li>
<li>Pharmaron may have entered a vicious circle, so that it is very challenging to generate the expected results no matter which direction the Company tries to break through.  </li>
</ul>


Pharmaron’s disappointing 2022 performance is just a start.Its business layout has always been "one step behind". CGT cannot become the main cornerstone business supporting valuation growth for the next stage.
The overall environment of CXO is different from that of the past. Even if Pharmaron finally achieves end-to-end integration,whether the prosperity of CXO industry still exists is a question mark.
Pharmaron may have entered a vicious circle, so that it is very challenging to generate the expected results no matter which direction the Company tries to break through.  


Pharmaron Beijing Co Ltd (3759.HK/300759.CH) - Start to Enter a Vicious Circle

<ul>
<li>WuXi AppTec is facing how to keep high growth momentum under the high base of last year's performance.If there’s no high growth point with certainty,high valuation is hard to sustain.</li>
<li>The US wouldn’t stop tightening monetary policy until "it’s fully prepared".Investors need to consider a situation that high interest rate environment is longer than expected,under which CXO remains in trouble.</li>
<li>Market sentiment towards CXO has changed. We think CXO isn't suitable for long-term hold but only for short-term trade in 2023. Buying low and selling high is a better strategy.</li>
</ul>


WuXi AppTec is facing how to keep high growth momentum under the high base of last year's performance.If there’s no high growth point with certainty,high valuation is hard to sustain.
The US wouldn’t stop tightening monetary policy until "it’s fully prepared".Investors need to consider a situation that high interest rate environment is longer than expected,under which CXO remains in trouble.
Market sentiment towards CXO has changed. We think CXO isn't suitable for long-term hold but only for short-term trade in 2023. Buying low and selling high is a better strategy.


WuXi AppTec (2359.HK/603259.CH) - Not the Time to Be Happy Even After a Positive Profit Alert

<ul>
<li>The benefits of assisted reproduction being covered by medical insurance are limited. Its main role is still to delay not fundamentally reverse the decline of China's birth rate.</li>
<li>If the valuation collapse occurs collectively in one field, it basically reflects that Miss Market does not hold much hope for this field in the future, such as cell therapy. </li>
<li>We mainly analyzed some key points of the companies that investors may be interested in, such as <a href="https://www.smartkarma.com/entities/iray-technology-company-limited" target="_blank" data-smartkarma-citation="entities:35716:1" rel="noopener">iRay Technology (688301 CH)</a> and <a href="https://www.smartkarma.com/entities/shanghai-medicilon-inc" target="_blank" data-smartkarma-citation="entities:30368:1" rel="noopener">Shanghai Medicilon Inc (688202 CH)</a>.</li>
</ul>


The benefits of assisted reproduction being covered by medical insurance are limited. Its main role is still to delay not fundamentally reverse the decline of China's birth rate.
If the valuation collapse occurs collectively in one field, it basically reflects that Miss Market does not hold much hope for this field in the future, such as cell therapy. 
We mainly analyzed some key points of the companies that investors may be interested in, such as iRay Technology (688301 CH) and Shanghai Medicilon Inc (688202 CH).


China Healthcare Weekly (Feb.10) - Assisted Reproduction into NRDL, Cell Therapy, Medicilon, IRay,

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mankind-pharma-ltd" target="_blank" data-smartkarma-citation="entities:36389:1" rel="noopener">Mankind Pharma</a> is looking to raise around US$1bn in its upcoming India IPO.</li>
<li>MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.</li>
<li>We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.</li>
</ul>



Mankind Pharma is looking to raise around US$1bn in its upcoming India IPO.
MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.


Mankind Pharma Pre-IPO - Thoughts on Valuations

CStone Pharmaceuticals / Equity Capital Markets

<ul>
<li>The revenue brought by CStone’s differentiated layout of pipeline does not match the R&amp;D investment. CStone needs to in-license more late-stage products, but the Company is not cash rich.</li>
<li>CStone was incubated by WuXi Bio. Its business model is“VC+IP+CRO”. Cstone doesn’t have independent R&amp;D capability. The increasingly low cost performance of in-licensed products has made the capital “reconsider” .</li>
<li>Cstone doesn’t have the potential to be a biopharma as it licensed out the key/core candidates. Its future valuation growth would be “discounted”. Corporate governance/instability is also a concern.</li>
</ul>


The revenue brought by CStone’s differentiated layout of pipeline does not match the R&amp;D investment. CStone needs to in-license more late-stage products, but the Company is not cash rich.
CStone was incubated by WuXi Bio. Its business model is“VC+IP+CRO”. Cstone doesn’t have independent R&amp;D capability. The increasingly low cost performance of in-licensed products has made the capital “reconsider” .
Cstone doesn’t have the potential to be a biopharma as it licensed out the key/core candidates. Its future valuation growth would be “discounted”. Corporate governance/instability is also a concern.


CStone Pharmaceuticals Placement (2616.HK) - There Is No Certainty that the Dilemma Will Reverse

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)

Pharmaron Beijing Co Ltd (3759.HK/300759.CH) - Start to Enter a Vicious Circle

Due to slow layout in end-to-end integration/high uncertainty in CGT, Pharmaron has entered a vicious circle as CXO's fast-growing dividend period...

Xinyao (Criss) Wang