Asia Long-Short PM/Analyst

Curtis Lehnert

Equity Bottom-Up

WuXi Apptec is set to be the newest A/H pair with its upcoming HK listing that is set to raise USD 1 billion. The A-share (603289 CH) recorded 15 straight limit up days after listing and the stock now stands at +274% since the IPO in January (it was up over 500% at one point). The H-share listing probably will not experience the same phenomenon, but that doesn't mean the IPO won't go well. WuXi rides on the HK pharma/biotech wave started by pre-revenue biotech firm <a href="https://www.smartkarma.com/entities/27265" target="_blank" data-smartkarma-citation="entities:27265:1">Ascletis Pharma Inc (1672 HK)</a> a couple months ago, but generates more revenue than any other pharmaceutical R&amp;D outsourcing firm in China.
The H-share pricing will be done on a relative basis to the A-share, so performance of the A-share over the coming days will be critical to the strike price of the H-share IPO. Currently, old favorites <a href="https://www.smartkarma.com/entities/389" target="_blank" data-smartkarma-citation="entities:389:1">Anhui Conch Cement Co Ltd A (600585 CH)</a> and <a href="https://www.smartkarma.com/entities/24682" target="_blank" data-smartkarma-citation="entities:24682:1">Ping An Insurance Group Co Of (601318 CH)</a> are the only A-shares trading at a discount to the H, which should cap some of the upside in this deal, but there would still be room for a solid pop upon listing. As the newest entrant to the A/H universe and a company well-positioned for future growth, this is one deal worth spending some time on.
In this insight I will explore the below:
I. The Industry
II. The Company
III. Financials
IV. Recent CDMO Acquistion Data Points

WuXi Apptec is set to be the newest A/H pair with its upcoming HK listing that is set to raise USD 1 billion. The A-share (603289 CH) recorded 15 straight limit up days after listing and the stock now stands at +274% since the IPO in January (it was up over 500% at one point). The H-share listing probably will not experience the same phenomenon, but that doesn't mean the IPO won't go well. WuXi rides on the HK pharma/biotech wave started by pre-revenue biotech firm Ascletis Pharma Inc (1672 HK) a couple months ago, but generates more revenue than any other pharmaceutical R&amp;D outsourcing firm in China.
The H-share pricing will be done on a relative basis to the A-share, so performance of the A-share over the coming days will be critical to the strike price of the H-share IPO. Currently, old favorites Anhui Conch Cement Co Ltd A (600585 CH) and Ping An Insurance Group Co Of (601318 CH) are the only A-shares trading at a discount to the H, which should cap some of the upside in this deal, but there would still be room for a solid pop upon listing. As the newest entrant to the A/H universe and a company well-positioned for future growth, this is one deal worth spending some time on.
In this insight I will explore the below:
I. The Industry
II. The Company
III. Financials
IV. Recent CDMO Acquistion Data Points

Hangzhou Tigermed Consulting (A) (300347 CH)

Wuxi Apptec 药明康德 IPO: Welcome to the A/H Universe