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 statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 15th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Wuxi Biologics (2269 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), China Petroleum &amp; Chemical (386 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 15th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Wuxi Biologics (2269 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), China Petroleum &amp; Chemical (386 HK).


Hong Kong Buybacks Weekly (Dec 15th): Tencent, AIA, Wuxi Biologics

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>Pharmaron’s performance has shown a clear downward trend this year, and the growth in 23Q4 may be even lower. That means this year's results could fall short of management's expectations.</li>
<li>The essence of unsatisfactory profit margin is due to low capacity utilization/management efficiency.The underlying reason is the sharp decline in drug R&amp;D demand due to the deterioration of financing environment.</li>
<li>Pharmaron seems ill-prepared in peptide CDMO, and its performance would further lag behind Wuxi AppTec in the future. Pharmaron may not be able to contribute alpha during industry downturns.</li>
</ul>


Pharmaron’s performance has shown a clear downward trend this year, and the growth in 23Q4 may be even lower. That means this year's results could fall short of management's expectations.
The essence of unsatisfactory profit margin is due to low capacity utilization/management efficiency.The underlying reason is the sharp decline in drug R&amp;D demand due to the deterioration of financing environment.
Pharmaron seems ill-prepared in peptide CDMO, and its performance would further lag behind Wuxi AppTec in the future. Pharmaron may not be able to contribute alpha during industry downturns.


Pharmaron Beijing (3759.HK/300759.CH) - Share Price Would Continue to Underperform

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>SOUTHBOUND flows showing reversion tendencies continues for a second or third week after weeks of momentum. </li>
<li>SOUTHBOUND saw HK$11.2bn of INFLOWS on the week, a chunk of which was net buys on HK-listed ETFs, but Hs underperformed their A counterparts in the H/A pairs once again. </li>
<li>High-Div SOEs again saw action. This time with both <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a><em>and</em><a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> seeing strong net buying as a percentage of volume. Tech was sold.  </li>
</ul>


SOUTHBOUND flows showing reversion tendencies continues for a second or third week after weeks of momentum. 
SOUTHBOUND saw HK$11.2bn of INFLOWS on the week, a chunk of which was net buys on HK-listed ETFs, but Hs underperformed their A counterparts in the H/A pairs once again. 
High-Div SOEs again saw action. This time with both CNOOC Ltd (883 HK)andChina Mobile (941 HK) seeing strong net buying as a percentage of volume. Tech was sold.  


HK Connect SOUTHBOUND Flows (To 8Dec23); CNOOC & China Mobile Both Now To The Buy Side, Tencent Not

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 8th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Meituan, CNOOC, Tencent, Wuxi Biologics, HKEx, Xiaomi.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of December 8th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Meituan, CNOOC, Tencent, Wuxi Biologics, HKEx, Xiaomi.


Hong Kong Connect Flows (Dec 8th): Meituan, CNOOC, Tencent, Wuxi Biologics, HKEx, Xiaomi

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>In Q2FY24, <a href="https://www.smartkarma.com/entities/avid-bioservices-inc" target="_blank" data-smartkarma-citation="entities:13309:1" rel="noopener">Avid Bioservices (CDMO US)</a> reported 27% YoY and 33% QoQ revenue decline to $25.4M, due to annual maintenance shutdown and reduction in process development services from early-stage customers.</li>
<li>During Q2FY24, Avid Bioservices signed $35M in net new business orders from both new and existing customers, resulting in a record high backlog of $199M, up 35% YoY.</li>
<li>Avid Bioservices has lowered FY24 revenue guidance to $137–147 million from $145–165 million. For reference, the company reported revenue of $149 million in FY23.</li>
</ul>


In Q2FY24, Avid Bioservices (CDMO US) reported 27% YoY and 33% QoQ revenue decline to $25.4M, due to annual maintenance shutdown and reduction in process development services from early-stage customers.
During Q2FY24, Avid Bioservices signed $35M in net new business orders from both new and existing customers, resulting in a record high backlog of $199M, up 35% YoY.
Avid Bioservices has lowered FY24 revenue guidance to $137–147 million from $145–165 million. For reference, the company reported revenue of $149 million in FY23.


Avid Bioservices (CDMO US): Q2 Result Falls Below Expectation; FY24 Guidance Lowered Amid Slowdown

China

Shanghai Pharmaceuticals Holding Co., Ltd. manufactures, retails, and wholesales a variety of pharmaceuticals including biopharmaceuticals, chemical and Chinese traditional medicines, and healthcare products. The Company also invests in new medicine development and provides related services.

Shanghai Pharmaceuticals Holding (2607 HK)

Huadong Medicine Co., Ltd. wholesales and retails medicines, pharmaceutical preparations, biological products, and medical instruments.  Through its subsidiaries, the Company also manufactures antibiotic medicines and biochemical products.

Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. manufactures and sells Chinese patent medicine. The Company also wholesales, retails, imports, and exports Western and Chinese pharmaceutical products and various medical apparatus.

Guangzhou Baiyunshan Pharmaceu (600332 CH)

Sinopharm Group Co Ltd is a pharmacy distribution company. The Company also owns several pharmacy enterprise groups in different industries such as logistics, retail stores, pharmaceutical manufacturing, and chemical testing.

Topchoice Medical Investment Corporation provides dental and oral health care services.

China National Medicines Corp. Ltd. wholesales and retails chemical material medicines, western medicine preparations, biochemical medicines, biological products, and Chinese traditional medicines.  Through its subsidiaries, the Company also manufactures pharmaceuticals including injections, capsules, tablets, and other related products under the CNCM brand name.

Tibet Rhodiola Pharmaceutical Holding Co. develops, manufactures, and markets Tibet medicines.  The Company's products include Rhodiola capsules, Rhodiola pellets, and other related medicines.

Zhejiang Dian Diagnostics Co., Ltd. provides medical diagnostic solutions, as an outsourcer, to various general hospitals, specialized hospitals, community health service centers (stations), township (county) hospitals, medical centers,  disease prevention and control centers.

Shenzhen Neptunus Bioengineering Co., Ltd. develops, manufactures, and markets biochemical pharmaceuticals, biological products, traditional Chinese medicines, and healthcare products.  Through its subsidiaries, the Company also manufactures food.

Searainbow Holding Corp., produces chemical fibers and other textile products. The company, through its subsidiaries, also provides medical e-commerce and on-line games.

Ramsay Health Care Ltd. provides health care services. The Company offers private hospital services, including, rehabilitation, psychiatric care, day, and complex surgery. Ramsay Health Care owns, operates, and manages health care facilities throughout Australia, Indonesia, and Europe.

Fortis Healthcare Ltd. is a health care provider.  The Company operates multi- specialty hospitals, a boutique-style hospital, and various satellite and heart command centers.

Bumrungrad Hospital Public Company Limited, through its subsidiaries,  owns and operates the Bumrungrad Hospital. Located in Bangkok, the Hospital has capacity of international standard medical care with 554 beds for inpatients and approximately 125 clinic examination suites that can serve up to 3,000 outpatients daily.

LHC Group Inc. provides post-acute healthcare services primarily to Medicare beneficiaries in rural markets in the southern United States. The company provides home-based services through home nursing agencies and hospices and facility-based services through long-term acute care hospitals and  outpatient rehabilitation clinics.

RadNet, Inc. owns and operates outpatient diagnostic imaging centers.  The Company's centers are located throughout California.

HealthEquity, Inc. provides technology-enabled services platforms that allow consumers to make healthcare saving and spending decisions. Consumers can access their tax-advantaged healthcare savings, compare treatment options and pricing, evaluate and pay healthcare bills, receive personalized benefit and clinical information, and earn wellness incentives.

Acadia Healthcare Co Ltd operates a network of behavioral health centers. The Company provides psychiatric and chemical dependency services, inpatient psychiatric hospitals, residential treatment centers, outpatient clinics, and therapeutic school based programs across the United States.

Select Medical Holdings Corporation is an operator of specialty hospitals and outpatient rehabilitation clinics. The Company provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior care centers, schools and work sites.

Option Care Health, Inc. provides infusion and home care management solutions. The Company offers products, services, and condition-specific clinical management programs for gastrointestinal abnormalities, infectious diseases, cancer, organ and blood cell transplants, bleeding disorders, and heart failures. Option Care Health serves patients in the United States.

CorVel Corporation provides managed care services in the workers' compensation, accident and health, and auto insurance markets across the United States.  The Company provides services to employers, government entities, insurance companies, and third party administrators.  CorVel provides a network of preferred providers, as well as case management, bill review, and other services.

WuXi Biologics (Cayman) Inc. is a leading open-access R&D capability and technology platform company serving the pharmaceutical, biotechnology, and medical device industries, with operations in China, U.S., and Iceland.  We provide a broad and integrated portfolio of laboratory and manufacturing services throughout the drug and medical device R&D process.  Our services are designed to help our global partners in shortening the cycle and lowering the cost of drug and medical device R&D through cost-effective and efficient solutions. 

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Wuxi Biologics (2269 HK)

Hong Kong Buybacks Weekly (Dec 15th): Tencent, AIA, Wuxi Biologics

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

HK Connect SOUTHBOUND Flows (To 8Dec23); CNOOC & China Mobile Both Now To The Buy Side, Tencent Not

SOUTHBOUND flows were a strong HK$11.2bn net inflow, with both ETFs and high-div SOEs seeing big net inflows. Despite that, Hs underperformed their...

Travis Lundy

Hong Kong Connect Flows (Dec 8th): Meituan, CNOOC, Tencent, Wuxi Biologics, HKEx, Xiaomi

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Meituan, CNOOC, Tencent, Wuxi Biologics, HKEx, Xiaomi.

Ke Yan, CFA, FRM

Avid Bioservices (CDMO US): Q2 Result Falls Below Expectation; FY24 Guidance Lowered Amid Slowdown

Avid Bioservices reported 27% YoY and 33% QoQ revenue decline to $25.4M in Q2FY24. The company has lowered FY24 revenue guidance to $137M–147M...

Tina Banerjee

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hong Kong Buybacks Weekly (Dec 15th): Tencent, AIA, Wuxi Biologics

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Pharmaron Beijing (3759.HK/300759.CH) - Share Price Would Continue to Underperform

Pharmaron’s 2023 results could fall short of management's guidance due to declining demand. Growth potential of CGT business is not as good as...

Xinyao (Criss) Wang

HK Connect SOUTHBOUND Flows (To 8Dec23); CNOOC & China Mobile Both Now To The Buy Side, Tencent Not

SOUTHBOUND flows were a strong HK$11.2bn net inflow, with both ETFs and high-div SOEs seeing big net inflows. Despite that, Hs underperformed their...

Travis Lundy

Hong Kong Connect Flows (Dec 8th): Meituan, CNOOC, Tencent, Wuxi Biologics, HKEx, Xiaomi

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Meituan, CNOOC, Tencent, Wuxi Biologics, HKEx, Xiaomi.

Ke Yan, CFA, FRM

Avid Bioservices (CDMO US): Q2 Result Falls Below Expectation; FY24 Guidance Lowered Amid Slowdown

​Avid Bioservices reported 27% YoY and 33% QoQ revenue decline to $25.4M in Q2FY24. The company has lowered FY24 revenue guidance to $137M–147M...

Tina Banerjee

Avid Bioservices reported 27% YoY and 33% QoQ revenue decline to $25.4M in Q2FY24. The company has lowered FY24 revenue guidance to $137M–147M...