In today’s briefing:
- Zhihu Dual-Primary Listing: A Question of Judgment
- Simcere Pharmaceutical (2096 HK): Double-Digit Topline Growth; Margin Deteriorating Spoils the Party
- Zai Lab Ltd (ZLAB.US/9688.HK) – Will Zai Lab Go into a Vicious Circle?
- Morning Views Asia: Central China Securities, China Jinmao Holdings, Country Garden Holdings Co
Zhihu Dual-Primary Listing: A Question of Judgment
- Zhihu Technology (ZH US) has launched an HKEx dual-primary listing to raise $150-200 million. Zhihu will not receive any of the net proceeds as it is offering from selling shareholders.
- Zhihu shares are down 73% from the IPO price of $9.50 per ADS (March 2021) largely due to the tech sell-off and regulatory uncertainty on ADR listings.
- While a loss-making Chinese tech name is not everybody’s cup of tea in the current environment, Zhihu has delivered resilient performance and the valuation is undemanding.
Simcere Pharmaceutical (2096 HK): Double-Digit Topline Growth; Margin Deteriorating Spoils the Party
- Simcere Pharmaceutical Group (2096 HK) reported an 11% y/y revenue growth to RMB5 billion, mainly driven by 54% y/y revenue growth from innovative pharmaceuticals.
- However, gross margin contracted 160 basis point to 78.4%, reflecting pricing headwind. Heavy R&D and selling and distribution expenses are taking toll on operating profit.
- During 2021, Simcere has added six registered clinical trials for phase 3, two trails for phase 2, three trails for phase 1, and obtained 12 clinical trial approvals for drugs.
Zai Lab Ltd (ZLAB.US/9688.HK) – Will Zai Lab Go into a Vicious Circle?
- Due to its early involvement in license-in mode, Zai Lab could in-license many high-quality candidates at a low price in the early stage, thus leading to today’s achievements.
- However, the increasingly low cost performance of in-licensed products has made the capital “reconsider”, because it is increasingly difficult to maintain high growth as before based on license-in mode.
- Zai Lab could be a good short-term trade,especially when it reaches licensing deals or launch new products,but doubts about long-term prospects could discourages investors from holding it for long term.
Morning Views Asia: Central China Securities, China Jinmao Holdings, Country Garden Holdings Co
Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.
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