Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>WuXi XDC Cayman shares significantly underperformed in 2024 with shares down ~28% year-to-date versus a ~19% gain on the Hang Seng Index.</li>
<li>Shares of both WuXi Biologics and WuXi AppTec also saw selling pressure due to Biosecure Act potential concerns. The US House of Representatives passed the Biosecure Act in September.</li>
<li>I believe that at current levels, the WuXi XDC Cayman valuation is full. My PT of HK$23.00 per share suggests limited upside. </li>
</ul>


WuXi XDC Cayman shares significantly underperformed in 2024 with shares down ~28% year-to-date versus a ~19% gain on the Hang Seng Index.
Shares of both WuXi Biologics and WuXi AppTec also saw selling pressure due to Biosecure Act potential concerns. The US House of Representatives passed the Biosecure Act in September.
I believe that at current levels, the WuXi XDC Cayman valuation is full. My PT of HK$23.00 per share suggests limited upside. 


WuXi XDC Cayman:  The Stock Still Trades at a Premium Multiple, Lack of Upside Catalysts

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>WuXi XDC’s YoY revenue growth rate fell to double-digit while it was kept triple-digit growth rate in previous periods. How much revenue generated from backlog isn’t within WuXi XDC’s control. </li>
<li>The significance of healthy growth of the global ADC market is that the good story of ADC CXO is able to continue. So, WuXi XDC’s short-term performance growth is guaranteed.</li>
<li>The establishment of an independent biopharmaceutical supply chain based on US national security concerns is inevitable. So, WuXi XDC’s stock price performance is more influenced by geopolitical conflicts than fundamentals. </li>
</ul>


WuXi XDC’s YoY revenue growth rate fell to double-digit while it was kept triple-digit growth rate in previous periods. How much revenue generated from backlog isn’t within WuXi XDC’s control. 
The significance of healthy growth of the global ADC market is that the good story of ADC CXO is able to continue. So, WuXi XDC’s short-term performance growth is guaranteed.
The establishment of an independent biopharmaceutical supply chain based on US national security concerns is inevitable. So, WuXi XDC’s stock price performance is more influenced by geopolitical conflicts than fundamentals. 


WuXi XDC Cayman (2268.HK) 24H1- High Growth of ADC Market Ensures Investment Logic, but Risks Remain

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wuxi-xdc-cayman-inc" target="_blank" data-smartkarma-citation="entities:39917:1" rel="noopener">WuXi XDC Cayman (2268 HK)</a> was listed in Hong Kong on 17th Nov 2023 after raising US$470m. Its six-month lockup will expire on 16th May 2024.</li>
<li>WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>



WuXi XDC Cayman (2268 HK) was listed in Hong Kong on 17th Nov 2023 after raising US$470m. Its six-month lockup will expire on 16th May 2024.
WuXi XDC Cayman (WXDC) is a contract research, development, and manufacturing organization (CRDMO) focused on the global antibody drug conjugates (ADC) and broader bioconjugate market providing integrated and end-to-end services.
In this note, we will talk about the lock-up dynamics and updates since our last note.


Wuxi XDC Lock-Up - US$300m Lockup Expiry Could See Some Selling Owing to the Regulatory Overhang

<ul>
<li>Theoretically, there’s no need to doubt WuXi XDC's growth momentum. What needs to be proven is how large the actual ADC market is, which determines how much valuation it deserves.</li>
<li>However, the biggest problem currently is geopolitical risks, which make performance forecasts groundless. In the context of Sino-US confrontation, there is “a hesitation” towards sustained high growth of WuXi XDC.</li>
<li>If several pieces of news are put together, this is not just about China CXO/TikTok being sanctioned by US. New balance point in the game between great powers will emerge.</li>
</ul>


Theoretically, there’s no need to doubt WuXi XDC's growth momentum. What needs to be proven is how large the actual ADC market is, which determines how much valuation it deserves.
However, the biggest problem currently is geopolitical risks, which make performance forecasts groundless. In the context of Sino-US confrontation, there is “a hesitation” towards sustained high growth of WuXi XDC.
If several pieces of news are put together, this is not just about China CXO/TikTok being sanctioned by US. New balance point in the game between great powers will emerge.


WuXi XDC Cayman (2268.HK) - Don't Rush to Bottom Fish This Stock

<ul>
<li>WuXi XDC looks like “an outlier” among domestic CXOs - Its share price has performed well so far. As a niche player, WuXi XDC’s short-term performance growth is relatively guaranteed.</li>
<li>We analyzed the valuation of <a href="https://www.smartkarma.com/entities/wuxi-xdc-cayman-inc" target="_blank" data-smartkarma-citation="entities:39917:1" rel="noopener">WuXi XDC Cayman (2268 HK)</a> under different scenarios. How much upside WuXi XDC’s valuation would have depends on the future real market size of ADCs.</li>
<li>We’re conservative about whether we could have a US$50 billion ADC market. The "lucky" part for WuXi XDC is the current ADC market brings "a safe window period" for investors.</li>
</ul>


WuXi XDC looks like “an outlier” among domestic CXOs - Its share price has performed well so far. As a niche player, WuXi XDC’s short-term performance growth is relatively guaranteed.
We analyzed the valuation of WuXi XDC Cayman (2268 HK) under different scenarios. How much upside WuXi XDC’s valuation would have depends on the future real market size of ADCs.
We’re conservative about whether we could have a US$50 billion ADC market. The "lucky" part for WuXi XDC is the current ADC market brings "a safe window period" for investors.


WuXi XDC Cayman (2268.HK) - Would It Be An "Oasis in the Desert"?

China

WuXi XDC Cayman Inc. operates as a leading contract testing, development and manufacturing organization focused on the global antibody drug conjugates and broader bioconjugate market. The Company provides bioconjugation discovery, analytical development, intermediate and conjugation manufacturing, and other services. WuXi XDC Cayman provides its services worldwide.

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WuXi XDC Cayman (2268 HK)

WuXi XDC Cayman: The Stock Still Trades at a Premium Multiple, Lack of Upside Catalysts

WuXi XDC Cayman stock rebounded strongly and trades above IPO offer price of HK$20.60. In my insight, I discuss the company’s valuation and...

Andrei Zakharov