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 the weekly Hong Kong Connect flows with our data engine for holding position as of September 16th.</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 inflows into Wuxi Biologics (Cayman) Inc and CNOOC. </li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 16th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight inflows into Wuxi Biologics (Cayman) Inc and CNOOC. 


Hong Kong Connect Flows (Sep 16th): Chinese Buying Wuxi Biologics After Biden's New Executive Order

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Sep 16th 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), Great Wall Motor (2333 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), Xiaomi (1810 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Sep 16th 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), Great Wall Motor (2333 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), Xiaomi (1810 HK).


Hong Kong Buybacks Weekly (Sep 16th): Tencent, AIA, Xiaomi, Swire, Fosun Intl

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>On Friday morning, <a href="https://www.smartkarma.com/entities/sk-discovery-co-ltd" target="_blank" data-smartkarma-citation="entities:5181:1" rel="noopener">Sk Discovery (006120 KS)</a>, current owner/controller of 36.56% of <a href="https://www.smartkarma.com/entities/sk-chemicals-co-ltd-new" target="_blank" data-smartkarma-citation="entities:26190:1" rel="noopener">Sk Chemicals Co Ltd/New (285130 KS)</a> announced an opportunistic Partial Offer to buy 5.22% more at KRW 108,800/share.</li>
<li>The stated purpose in the <a href="https://kind.krx.co.kr/common/disclsviewer.do?method=search&amp;acptno=20220902000019&amp;docno=&amp;viewerhost=&amp;viewerport=" target="_blank" rel="noopener">Tender Offer Announcement</a> is "Stability of Management Rights." This will get SK Discovery to 41.77%, permitting consolidation of SK Chemicals.</li>
<li>
<em><strong>The real reason?</strong></em>SK Chemicals shares are trading at less than one-third the value of the <a href="https://www.smartkarma.com/entities/sk-bioscience-co-ltd" target="_blank" data-smartkarma-citation="entities:31484:1" rel="noopener">SK Bioscience (302440 KS)</a> shares they hold (with net cash and others free).</li>
</ul>


On Friday morning, Sk Discovery (006120 KS), current owner/controller of 36.56% of Sk Chemicals Co Ltd/New (285130 KS) announced an opportunistic Partial Offer to buy 5.22% more at KRW 108,800/share.
The stated purpose in the Tender Offer Announcement is "Stability of Management Rights." This will get SK Discovery to 41.77%, permitting consolidation of SK Chemicals.

The real reason?SK Chemicals shares are trading at less than one-third the value of the SK Bioscience (302440 KS) shares they hold (with net cash and others free).


SK Discovery Launches Opportunistic Partial Tender on SK Chemicals To Buy SK Bio CHEAP

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>“Measures for the Supervision and Administration of Online Drug Sales” was released, which indicated that the online sale of prescription drugs is allowed, but there are certain restrictions and requirements.</li>
<li>The rise of China biotech is based on the historical opportunities of both alpha (individual efforts) and beta (industry development) superposition. It’s unique. Investors shouldn’t expect to “copy” similar paths.</li>
<li>We have noted that some biotech/biopharma have or are considering changing excess capacity to do CDMO. This is caused by too much “bubble” in the market, which is not logical.</li>
</ul>


“Measures for the Supervision and Administration of Online Drug Sales” was released, which indicated that the online sale of prescription drugs is allowed, but there are certain restrictions and requirements.
The rise of China biotech is based on the historical opportunities of both alpha (individual efforts) and beta (industry development) superposition. It’s unique. Investors shouldn’t expect to “copy” similar paths.
We have noted that some biotech/biopharma have or are considering changing excess capacity to do CDMO. This is caused by too much “bubble” in the market, which is not logical.


China Healthcare Weekly(Sep2)-Online Drug Sale, Biotech's Historical Opportunity, Biotech to Be CDMO

Equity Bottom-Up

<ul>
<li>WuXi Biologics released 2022H1 results. The Company maintained its growth momentum. We highlight some positive sides. However, gross profit margin decreased. Considering the future trend, margin performance is not optimistic.</li>
<li>A drop in demand has already occurred. Meanwhile, after the biologic drug boom has passed, the “low-hanging fruit” is gone, there could be more magnified cyclical problems for WuXi Biologics.</li>
<li>As an old generation CXO, it’s difficult for WuXi Biologics to achieve V-shaped rebound or hit new highs.2022 is a good time to offload. Investors can take advantage of it.</li>
</ul>


WuXi Biologics released 2022H1 results. The Company maintained its growth momentum. We highlight some positive sides. However, gross profit margin decreased. Considering the future trend, margin performance is not optimistic.
A drop in demand has already occurred. Meanwhile, after the biologic drug boom has passed, the “low-hanging fruit” is gone, there could be more magnified cyclical problems for WuXi Biologics.
As an old generation CXO, it’s difficult for WuXi Biologics to achieve V-shaped rebound or hit new highs.2022 is a good time to offload. Investors can take advantage of it.


Wuxi Biologics (2269.HK) 2022H1 - Hard to Achieve V-Share Rebound

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)

Hong Kong Connect Flows (Sep 16th): Chinese Buying Wuxi Biologics After Biden's New Executive Order

We analyzed Hong Connect flows last week and highlight Chinese purchase of Wuxi Biologics post new executive order signed on Monday.

Ke Yan, CFA, FRM

Hong Kong Buybacks Weekly (Sep 16th): Tencent, AIA, Xiaomi, Swire, Fosun Intl

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

SK Discovery Launches Opportunistic Partial Tender on SK Chemicals To Buy SK Bio CHEAP

SK Discovery has launched an opportunistic Offer to buy 5.2% of SK Chem to go >40+%. A small premium to recent but only a 12-week high... ish......

Travis Lundy

China Healthcare Weekly(Sep2)-Online Drug Sale, Biotech's Historical Opportunity, Biotech to Be CDMO

New policy of online drug sales is released,including certain restrictions.The rise of China biotech is based on historical opportunity of alpha...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hong Kong Connect Flows (Sep 16th): Chinese Buying Wuxi Biologics After Biden's New Executive Order

We analyzed Hong Connect flows last week and highlight Chinese purchase of Wuxi Biologics post new executive order signed on Monday.

Ke Yan, CFA, FRM

Hong Kong Buybacks Weekly (Sep 16th): Tencent, AIA, Xiaomi, Swire, Fosun Intl

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

SK Discovery Launches Opportunistic Partial Tender on SK Chemicals To Buy SK Bio CHEAP

SK Discovery has launched an opportunistic Offer to buy 5.2% of SK Chem to go >40+%. A small premium to recent but only a 12-week high... ish......

Travis Lundy

China Healthcare Weekly(Sep2)-Online Drug Sale, Biotech's Historical Opportunity, Biotech to Be CDMO

New policy of online drug sales is released,including certain restrictions.The rise of China biotech is based on historical opportunity of alpha...

Xinyao (Criss) Wang

Wuxi Biologics (2269.HK) 2022H1 - Hard to Achieve V-Share Rebound

WuXi Biologics had solid 2022H1 growth,but after the biologic drug boom has passed, the “low-hanging fruit” is gone.There can be more magnified...

Xinyao (Criss) Wang