In today’s briefing:
- HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March
- WuXi XDC Cayman (2268.HK) – Would It Be An “Oasis in the Desert”?
- Eisai Co Ltd (4523 JP): Why Performance Reversal Is Not Expected in Near-Term
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HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March
- We see 30 potential adds (including plenty of new listings) and 28 potential deletes (on market cap and liquidity) for the Hang Seng Composite Index in March.
- We expect 26 stocks to be added to Southbound Stock Connect following the rebalance while 25 stocks could be deleted from the trading link and become Sell-only.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
WuXi XDC Cayman (2268.HK) – Would It Be An “Oasis in the Desert”?
- 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.
Eisai Co Ltd (4523 JP): Why Performance Reversal Is Not Expected in Near-Term
- Eisai Co Ltd (4523 JP) shares corrected more than 60% from highs over the disappointment from Alzheimer’s disease drug Leqembi. During H1FY24, Leqembi reported revenue of just ¥400M ($3M).
- With approximately 40% revenue contribution, anti-cancer drug Lenvima is the top selling drug of Eisai. In the U.S., Lenvima patent protection will start to expire in US in October 2025.
- In December, Eisai has submitted a marketing authorization application in Japan for tasurgratinib for biliary tract cancer. If approved, tasurgratinob will be a late entrant in a crowded market.