HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Since <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> was listed on the SSE STAR Market in November 2019, in less than two years, its share price has been up about 1535%, the highest among all CRO companies in A-share. By the end of October 18, 2021, its market value was RMB42.9 billion. So, what is so special about this CRO company that its stock is rising so sharply? This insight mainly analyzed the business, the financial performance, the outlook and the concerns of the Company.

Since Shanghai Medicilon Inc (688202 CH) was listed on the SSE STAR Market in November 2019, in less than two years, its share price has been up about 1535%, the highest among all CRO companies in A-share. By the end of October 18, 2021, its market value was RMB42.9 billion. So, what is so special about this CRO company that its stock is rising so sharply? This insight mainly analyzed the business, the financial performance, the outlook and the concerns of the Company. 

Shanghai Medicilon (688202.CH)- Concerns on Long-Term Outlook Despite Amazing Short Term Performance

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

Hong Kong SFC reported aggregate short position as of Sep 30. The aggregate short value for equities increased by $634m (+1.0%) WoW but decreased by $2,946m (-4.3%) over the preceding four weeks. Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($3,222m, +1.6% WoW), China Merchants Bank Co., Ltd./3968 HK($1,958m, -2.9% WoW), Meituan/3690 HK($1,866m, +12.4% WoW), Zhongsheng Group Holdings Limited/881 HK($1,844m, +0.4% WoW), Tencent Holdings Limited/700 HK($1,456m, +10.0% WoW).<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/354/original/Hong_Kong_Market_Short_Position_Value_%28line%29_and_1W_Changes_%28bar%29_%28%24m%292021-10-09+17_49_30.png?1633834880" class="editor-image img-responsive" data-smartkarma-image-id="234354"></figure></section>

Hong Kong SFC reported aggregate short position as of Sep 30. The aggregate short value for equities increased by $634m (+1.0%) WoW but decreased by $2,946m (-4.3%) over the preceding four weeks.  Most shorted stocks by aggregate short value of positions are Ping An Insurance (Group) Company Of China, Ltd./2318 HK($3,222m, +1.6% WoW), China Merchants Bank Co., Ltd./3968 HK($1,958m, -2.9% WoW), Meituan/3690 HK($1,866m, +12.4% WoW), Zhongsheng Group Holdings Limited/881 HK($1,844m, +0.4% WoW), Tencent Holdings Limited/700 HK($1,456m, +10.0% WoW).

HK Short Interest: Wuxi Apptec, China Resource Power Short Spiked in September

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>Thoughts and concerns on domestic pharmaceutical companies.</li>
<li>Quite a few policies about the VBP on Chinese patent medicine have been launched in some provinces.</li>
<li>Foreign companies have made good preparation for the upcoming 2021 medical insurance negotiation on their PD-1/L1 products. 
</li>
</ul>Company news:News about the updated progress on M&amp;A deal and new drugs of <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK),</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> and <a href="https://www.smartkarma.com/entities/luye-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:488:1" rel="noopener">Luye Pharma (2186 HK)</a>.Market review:Last week, stock price for healthcare sector in A share increased 0.69%, while CSI 300 increased 1.31% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
Thoughts and concerns on domestic pharmaceutical companies.
Quite a few policies about the VBP on Chinese patent medicine have been launched in some provinces.
Foreign companies have made good preparation for the upcoming 2021 medical insurance negotiation on their PD-1/L1 products. 

Company news:News about the updated progress on M&amp;A deal and new drugs of Microport Scientific (853 HK),BeiGene Ltd (6160 HK) and Luye Pharma (2186 HK).Market review:Last week, stock price for healthcare sector in A share increased 0.69%, while CSI 300 increased 1.31% over the same period of time.Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

China Healthcare Weekly (Oct.8)-Summary of Concerns on Pharma Companies, VBP on TCM, Q4 PD-1 Bidding

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Novotech Holdings / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/novotech-health-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33411:1" rel="noopener">Novotech Holdings (NVT HK)</a> is an Asia-Pacific biotech-focused CRO that provides clinical research services for customers from Phase I to Phase IV trials across multiple countries in the Asia-Pacific region including Greater China, South Korea and Australia/New Zealand. In our previous insight on Novotech Health’s IPO, we examined the company’s business model, revenue, margins and the outlook for the company.In this insight, we provide our forecasts for the company’s financials and what could be a potential valuation for Novotech.

Novotech Holdings (NVT HK) is an Asia-Pacific biotech-focused CRO that provides clinical research services for customers from Phase I to Phase IV trials across multiple countries in the Asia-Pacific region including Greater China, South Korea and Australia/New Zealand. In our previous insight on Novotech Health’s IPO, we examined the company’s business model, revenue, margins and the outlook for the company.In this insight, we provide our forecasts for the company’s financials and what could be a potential valuation for Novotech.

Novotech Health IPO: Forecasts, Peer Comparison and Thoughts on Valuation

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Shanghai MicroPort MedBot Group / Equity Capital Markets

<div>MicroPort MedBot (MM), a surgical robot company, aims to raise up to US$1bn in its Hong Kong IPO. It is a subsidiary of <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a> and is backed by Hillhouse and other  mainly domestic investors.</div><div>MicroPort MedBot (MM) is a surgical robot company which designs, develops and commercializes surgical robots to assist surgeons in performing complex surgical procedures. It is the only company with a product portfolio covering the five major and fast-growing surgical specialties of laparoscopic, orthopedic, panvascular, natural orifice and percutaneous surgical procedures, as per Frost &amp; Sullivan (F&amp;S).</div><div>Its flagship products, Toumai Laparoscopic Surgical Robot, DFVision 3D Electronic Laparoscope and Honghu Orthopedic Surgical Robot, have all been admitted to the NMPA’s Green Path. Toumai and Honghu are at or near the registration approval stage, and DFVision has recently received NMPA approval.</div>We have looked at the company’s background and products in our earlier note, <a href="https://www.smartkarma.com/insights/microport-medbot-pre-ipo-robodoc-pre-revenue-has-a-large-competitor-but-a-large-market-as-well" target="_blank" rel="noopener">MicroPort MedBot Pre-IPO - RoboDoc - pre-revenue, has a large competitor but a large market as well</a>. In this note, we will talk about the PHIP updates and look at the performance of its largest competitor.

MicroPort MedBot (MM), a surgical robot company, aims to raise up to US$1bn in its Hong Kong IPO. It is a subsidiary of Microport Scientific (853 HK) and is backed by Hillhouse and other  mainly domestic investors.MicroPort MedBot (MM) is a surgical robot company which designs, develops and commercializes surgical robots to assist surgeons in performing complex surgical procedures. It is the only company with a product portfolio covering the five major and fast-growing surgical specialties of laparoscopic, orthopedic, panvascular, natural orifice and percutaneous surgical procedures, as per Frost &amp; Sullivan (F&amp;S).Its flagship products, Toumai Laparoscopic Surgical Robot, DFVision 3D Electronic Laparoscope and Honghu Orthopedic Surgical Robot, have all been admitted to the NMPA’s Green Path. Toumai and Honghu are at or near the registration approval stage, and DFVision has recently received NMPA approval.We have looked at the company’s background and products in our earlier note, MicroPort MedBot Pre-IPO - RoboDoc - pre-revenue, has a large competitor but a large market as well. In this note, we will talk about the PHIP updates and look at the performance of its largest competitor.

MicroPort MedBot Pre-IPO - RoboDoc - PHIP Updates and a Look at Its Largest Competitor

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)

Shanghai Medicilon (688202.CH)- Concerns on Long-Term Outlook Despite Amazing Short Term Performance

The insight mainly analyzed Medicilon in terms of the business, the financial performance, the comparison with peers, the outlook, the concerns and...

Xinyao (Criss) Wang

HK Short Interest: Wuxi Apptec, China Resource Power Short Spiked in September

We highlighted significant increase in short interest in Wuxi Apptec (2359 HK) and China Resource Power (836 HK) in September based on the latest...

Ke Yan, CFA, FRM

China Healthcare Weekly (Oct.8)-Summary of Concerns on Pharma Companies, VBP on TCM, Q4 PD-1 Bidding

The article analyzed thoughts and concerns on domestic pharmaceutical companies, VBP on Chinese patent medicine and foreign companies' preparation...

Xinyao (Criss) Wang

Novotech Health IPO: Forecasts, Peer Comparison and Thoughts on Valuation

Novotech Health is an Asia-Pacific biotech-focused CRO and in this insight, we provide our forecasts for the company’s financials and what could be...

Shifara Samsudeen, ACMA, CGMA

MicroPort MedBot Pre-IPO - RoboDoc - PHIP Updates and a Look at Its Largest Competitor

MicroPort MedBot, a surgical robot company, aims to raise up to US$1bn in its Hong Kong IPO. It is a subsidiary of Microport Scientific (853 HK)...

Sumeet Singh

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