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 analyzed the latest HK SFC report for aggregate short position as of Apr 14th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Li Auto, Wuxi Bio, Baba, Tencent, Sensetime.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Apr 14th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Li Auto, Wuxi Bio, Baba, Tencent, Sensetime.


HK Short Interest Weekly: Li Auto, Wuxi Bio, Baba, Tencent, Sensetime

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>The market of biopharmaceuticals and CDMO keeps growing, with CAGR of about 10%. However, CGT is the "outlier". The whole story of CGT business isn’t persuasive at the current stage.</li>
<li>Lonza is still the leader.WuXi bio has secured the second place. Samsung Biologics is catching up in terms of profit margin. Different production capacity structures can bring about different changes.</li>
<li>Industry concentration of CDMO would further increase, making it difficult for new entrants to seize orders from Top CDMOs.We advise investors not to spend too much time on small CDMOs.</li>
</ul>


The market of biopharmaceuticals and CDMO keeps growing, with CAGR of about 10%. However, CGT is the "outlier". The whole story of CGT business isn’t persuasive at the current stage.
Lonza is still the leader.WuXi bio has secured the second place. Samsung Biologics is catching up in terms of profit margin. Different production capacity structures can bring about different changes.
Industry concentration of CDMO would further increase, making it difficult for new entrants to seize orders from Top CDMOs.We advise investors not to spend too much time on small CDMOs.


A Different View on Global CDMO - The Industry Trend, the Major Players, and the Outlook

<ul>
<li>We analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.</li>
<li>We highlight inflows into Tencent, Meituan, China Mobile, ICBC, Bilibili, and outflows from CCB, Geely, Sunny Optical.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.
We highlight inflows into Tencent, Meituan, China Mobile, ICBC, Bilibili, and outflows from CCB, Geely, Sunny Optical.


Hong Kong Connect Flows Monthly: 1Y High Inflows in March

Equity Bottom-Up

<ul>
<li>WuXi Bio’s performance growth is obviously decreasing. Based on customer structure/development trend, overseas biotech is the main growth point,which means WuXi Bio would be more vulnerable to the external financing environment.</li>
<li>WuXi Bio expands manufacturing capacity aggressively through new construction/acquisitions. An important assumption is WuXi Bio can continue receiving overseas orders, otherwise its CDMO production capacity would be considered excessive.</li>
<li>Due to IRA,whether US market would reflect a slowdown in growth of healthcare spending, thereby depressing the potential return on drug R&amp;D? This is a fatal blow to China CXO.</li>
</ul>


WuXi Bio’s performance growth is obviously decreasing. Based on customer structure/development trend, overseas biotech is the main growth point,which means WuXi Bio would be more vulnerable to the external financing environment.
WuXi Bio expands manufacturing capacity aggressively through new construction/acquisitions. An important assumption is WuXi Bio can continue receiving overseas orders, otherwise its CDMO production capacity would be considered excessive.
Due to IRA,whether US market would reflect a slowdown in growth of healthcare spending, thereby depressing the potential return on drug R&amp;D? This is a fatal blow to China CXO.


Wuxi Biologics (2269.HK) 2022 Results - Key Takeaways and the Outlook

Equity Capital Markets

Shanghai Duoning Biotechnology / Equity Capital Markets

<ul>
<li>The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.</li>
<li>Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.</li>
<li>A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns. </li>
</ul>


The logic of Duoning’s business layout is that self-produced upstream products reduce the cost and increase customer stickiness, then lock in the purchase of future customers from the source.
Although lagging behind imported enterprises in product performance, the upstream production cost control is one of the driving forces for the localization of pharmaceutical supply chain. Duoning has growth potential.
A slow-down or reversal of trend related to life sciences industry growth could have an adverse effect on Duoning’s business. Overseas sanctions and policy risks are also the concerns. 


Pre-IPO Shanghai Duoning Biotechnology - The Industry, the Business and the Concerns

China

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)

HK Short Interest Weekly: Li Auto, Wuxi Bio, Baba, Tencent, Sensetime

We analyzed the latest HK SFC report for aggregate short position as of Apr 14th and highlight short interest changes in Li Auto, Wuxi Bio, Baba,...

Ke Yan, CFA, FRM

A Different View on Global CDMO - The Industry Trend, the Major Players, and the Outlook

After the release of 2022 annual reports by leading global CDMOs (Lonza, WuXi Bio, Samsung Biologics), we shared our different views and identified...

Xinyao (Criss) Wang

Hong Kong Connect Flows Monthly: 1Y High Inflows in March

We analyzed the Hong Kong Connect Scheme for March and highlight flows for Tencent, Meituan, China Mobile, ICBC, Bilibili, CCB, Geely, Sunny Optical.

Ke Yan, CFA, FRM