HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>It seems that Mr Market was not satisfactory with WuXi AppTec’s 2022H1 performance. If excluding COVID-19 projects (which are regarded as a one-time increment), the performance growth was not high.</li>
<li>Considering that the CXO preliminary bid winning has declined largely in the US, domestic CXO would not begin to gradually reflect the slowdown of newly added orders until Q4.</li>
<li>We are concerned about WuXi AppTec's performance in 2023. As an old generation CXO, it's hard to achieve V-shaped rebound. So, 2022 is a good time to offload the Company.</li>
</ul>


It seems that Mr Market was not satisfactory with WuXi AppTec’s 2022H1 performance. If excluding COVID-19 projects (which are regarded as a one-time increment), the performance growth was not high.
Considering that the CXO preliminary bid winning has declined largely in the US, domestic CXO would not begin to gradually reflect the slowdown of newly added orders until Q4.
We are concerned about WuXi AppTec's performance in 2023. As an old generation CXO, it's hard to achieve V-shaped rebound. So, 2022 is a good time to offload the Company.


WuXi AppTec (603259.CH/2359.HK) 2022H1 - The Concerns Behind and the Outlook

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.</li>
<li>Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.</li>
<li>Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.</li>
</ul>


Industrials and Consumer Staples Remain Top Overweights, Though Sentiment Fragile for Both.
Energy sector shows signs of a turnaround from long-term decline, whilst Financials remain unloved by China investors.
Real Estate allocations have hit record lows, with average holdings at just 2.93%, while Consumer Discretionary sector approaches all-time highs.


Thematic (Sector/Industry)

<ul>
<li>Due to the popularity of GLP-1 target, the entire GLP-1 upstream and downstream industry chain has received great enthusiasm. We analyzed related investment opportunities but also concerns in this market.  </li>
<li>Domestic CXOs should focus on securing orders for overseas weight loss drugs. The market value increment brought by weight loss drugs to CXO should be higher than that of APIs.</li>
<li>Due to increasing competition/potential price war, how big the real market space is uncertain. So, the market value increment of weight loss drugs business for pharmaceutical companies could be lower-than-expected.</li>
</ul>


Due to the popularity of GLP-1 target, the entire GLP-1 upstream and downstream industry chain has received great enthusiasm. We analyzed related investment opportunities but also concerns in this market.  
Domestic CXOs should focus on securing orders for overseas weight loss drugs. The market value increment brought by weight loss drugs to CXO should be higher than that of APIs.
Due to increasing competition/potential price war, how big the real market space is uncertain. So, the market value increment of weight loss drugs business for pharmaceutical companies could be lower-than-expected.


China's Weight Loss Drug Market – The Investment Opportunities and the Risks Behind

Joinn Laboratories China  Lt / Equity Bottom-Up

<ul>
<li>The "Monkey Price Index" could be a direct indicator of the fervor of biopharmaceutical development, and the accounting treatment of biological assets would have a big impact on Joinn’s performance.</li>
<li>The current business layout, strategy, revenue structure, CXO industry trend as well as the domestic negative policy impact would cast doubts on Joinn’s future development.</li>
<li>Based on our analysis, Joinn still lacks the strong logic to support its long-term growth and high valuation. Therefore, we are conservative about Joinn’s outlook at the current stage.</li>
</ul>


The "Monkey Price Index" could be a direct indicator of the fervor of biopharmaceutical development, and the accounting treatment of biological assets would have a big impact on Joinn’s performance.
The current business layout, strategy, revenue structure, CXO industry trend as well as the domestic negative policy impact would cast doubts on Joinn’s future development.
Based on our analysis, Joinn still lacks the strong logic to support its long-term growth and high valuation. Therefore, we are conservative about Joinn’s outlook at the current stage.


Joinn Laboratories (6127.HK) - Concerns Begin to Arise when the Monkeys Become More Expensive

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 about 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>In this note, we will undertake a peer comparison with some of the India listed and domestically focussed pharmaceutical firms.</li>
</ul>



Mankind Pharma is looking to raise about 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.
In this note, we will undertake a peer comparison with some of the India listed and domestically focussed pharmaceutical firms.


Mankind Pharma Pre-IPO - Peer Comparison - One of the Largest, with Better Growth and Margins

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 (603259 CH)