HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Ascentage Pharma Group Corp / Equity Capital Markets

Ascentage Pharma Group International operates as a clinical-stage biotechnology company. The Company develops novel therapies for cancers, hepatitis B virus, age-related diseases, and more. Ascentage Pharma Group International conducts businesses in China, the United States, and other countries.

<ul>
<li>Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.</li>
<li>The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion. </li>
<li>Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets. </li>
</ul>


Ascentage has filed with the SEC to raise up to US$100 million in a US IPO. We think its future market value is expected to surpass that of Hutchmed.
The outlook of olverembatinib is clear. Takeda can give more possibilities to olverembatinib. 2025 Sales of olverembatinib is expected to reach RMB500 million.Market value contribution from olverembatinib is US$1-1.5 billion. 
Investors have higher expectations on APG-2575 to be out-licensed to MNCs. We think the peak sales of APG-2575 is expected to surpass that of olverembatinib in overseas markets. 


Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

S. F. Holding Co., Ltd. offers express courier services. The Company provides logistics, order tracking, supply chain management, warehousing, and other services. S. F. Holding offers services worldwide.

<ul>
<li>The Time-definite express services are actually a double-edged sword for S.F.- Although it helps S.F. establish core competitiveness, such strategy limits the Company's market share and growth ceiling in China.</li>
<li>The issue here is that S.F. has encountered growth bottlenecks, but due to its heavy asset model, the only truly suitable solution is internationalization, which however is full of uncertainties.</li>
<li>S.F. is facing many challenges. The IPO final offer price of HK$34.3 is expensive, which might explain why S.F.'s share price has been a bit “boring” since its listing.</li>
</ul>


The Time-definite express services are actually a double-edged sword for S.F.- Although it helps S.F. establish core competitiveness, such strategy limits the Company's market share and growth ceiling in China.
The issue here is that S.F. has encountered growth bottlenecks, but due to its heavy asset model, the only truly suitable solution is internationalization, which however is full of uncertainties.
S.F. is facing many challenges. The IPO final offer price of HK$34.3 is expensive, which might explain why S.F.'s share price has been a bit “boring” since its listing.


S.F. Holding (6936 HK) - Here's Why Post-IPO Share Price Performance Is So "Boring"

Equity Bottom-Up

China Shineway Pharmaceutical / Equity Bottom-Up

China Shineway Pharmaceutical (2877.HK) is the largest manufacturer of Chinese medicine injections, soft capsules, and granules in China.

<ul>
<li>Shineway’s 24Q1-Q3 performance is disappointing. So, we adjusted our forecast- 2024 Revenue could be about RMB3.7-4 billion, down 11-18% YoY. Net profit could reach about RMB1.05-1.1 billion, up 8-13% YoY.  </li>
<li>VBP is the biggest headwinds - Injection products/TCM formula granules/OTC medications all face VBP, which brings uncertainties to future performance. It’s uncertain whether the 2025 performance will rebound as expected.</li>
<li>Shineway seems to have lost growth momentum after COVID-19.Considering large cash balance, it doesn't make much sense to hold the Company long term if it doesn't significantly raise its dividend.</li>
</ul>


Shineway’s 24Q1-Q3 performance is disappointing. So, we adjusted our forecast- 2024 Revenue could be about RMB3.7-4 billion, down 11-18% YoY. Net profit could reach about RMB1.05-1.1 billion, up 8-13% YoY.  
VBP is the biggest headwinds - Injection products/TCM formula granules/OTC medications all face VBP, which brings uncertainties to future performance. It’s uncertain whether the 2025 performance will rebound as expected.
Shineway seems to have lost growth momentum after COVID-19.Considering large cash balance, it doesn't make much sense to hold the Company long term if it doesn't significantly raise its dividend.


China Shineway Pharmaceutical (2877 HK) - The Outlook Is Deteriorating

Bloks Groups (Bloks) operates in the toy segment where it primarily assembles character toys.

<ul>
<li>The assembly character toy segment market size is not big and Bloks is already China’s largest player. So, there will be a day when the growth ceiling is reached.</li>
<li>Bloks’ business model is more similar to Pop Mart, rather than LEGO, but Bloks’ profitability is lagging behind both of them. The current high revenue growth may not be sustainable.</li>
<li>Pre-IPO valuation of Bloks reached RMB7.2 billion. Valuation of Bloks should be lower than Pop Mart. If Bloks’ valuation could reach the industry average after IPO, it is already good.</li>
</ul>


The assembly character toy segment market size is not big and Bloks is already China’s largest player. So, there will be a day when the growth ceiling is reached.
Bloks’ business model is more similar to Pop Mart, rather than LEGO, but Bloks’ profitability is lagging behind both of them. The current high revenue growth may not be sustainable.
Pre-IPO valuation of Bloks reached RMB7.2 billion. Valuation of Bloks should be lower than Pop Mart. If Bloks’ valuation could reach the industry average after IPO, it is already good.


Pre-IPO Bloks Group (PHIP Updates) - Some Points Worth the Attention

Qingdao Haier Biomedical  Lt / Equity Capital Markets

Qingdao Haier Biomedical Co., Ltd. designs, manufacture, and markets low temperature storage equipment for biomedical samples. The Company provides complete storage solutions for biological sample banks, blood safety, vaccine safety, medical supplies, and reagent safety as well. Qingdao Haier Biomedical

<ul>
<li>Haier Biomedical plans to merge with and absorb Shanghai RAAS through the issuance of shares, and both parties have signed a letter of intent for the potential merger.</li>
<li>Haier's acquisition of RAAS helps connect the software and hardware of the blood industry and strengthen the company's dominant position in the entire industry chain in the blood products industry.</li>
<li>The market value/financial performance of these two are far apart. If the acquisition is completed, it will help Haier improve financial performance, which is obviously more beneficial for Haier. </li>
</ul>


Haier Biomedical plans to merge with and absorb Shanghai RAAS through the issuance of shares, and both parties have signed a letter of intent for the potential merger.
Haier's acquisition of RAAS helps connect the software and hardware of the blood industry and strengthen the company's dominant position in the entire industry chain in the blood products industry.
The market value/financial performance of these two are far apart. If the acquisition is completed, it will help Haier improve financial performance, which is obviously more beneficial for Haier. 


China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

Over 15 years' experience in both finance and healthcare, covering clinic operations, investment and equity research in both China and overseas.

Xinyao (Criss) Wang
HK/China Healthcare Analyst (ex-Fosun Pharma)

Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

Xinyao (Criss) Wang

China Shineway Pharmaceutical (2877 HK) - The Outlook Is Deteriorating

Due to Shineway's weak performance, we lowered forecast for 2024.Rebound in 2025 may fall short of expectation.VBP pose uncertainty for future...

Xinyao (Criss) Wang

Pre-IPO Bloks Group (PHIP Updates) - Some Points Worth the Attention

As China's largest assembly character toy player, Bloks faces growth ceiling/lagging profitability compared to peers. The key question is how to...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...

Xinyao (Criss) Wang

Pre-IPO Ascentage Pharma - The US Stock Listing Will Stimulate Future Growth Potential

​Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

Xinyao (Criss) Wang

S.F. Holding (6936 HK) - Here's Why Post-IPO Share Price Performance Is So "Boring"

S.F. has encountered growth bottlenecks. Due to heavy asset model, internationalization is the only solution but is full of uncertainties. The IPO...

Xinyao (Criss) Wang

China Shineway Pharmaceutical (2877 HK) - The Outlook Is Deteriorating

Due to ​Shineway's weak performance, we lowered forecast for 2024.Rebound in 2025 may fall short of expectation.VBP pose uncertainty for future...

Xinyao (Criss) Wang

Pre-IPO Bloks Group (PHIP Updates) - Some Points Worth the Attention

As ​China's largest assembly character toy player, Bloks faces growth ceiling/lagging profitability compared to peers. The key question is how to...

Xinyao (Criss) Wang

China Healthcare Weekly (Dec.29) - Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS

​Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...

Xinyao (Criss) Wang

Ascentage aims to raise $100 million in US IPO, with potential valuation surpassing Hutchmed. Olverembatinib's outlook is certain. Catalyst is...

Due to Shineway's weak performance, we lowered forecast for 2024.Rebound in 2025 may fall short of expectation.VBP pose uncertainty for future...

As China's largest assembly character toy player, Bloks faces growth ceiling/lagging profitability compared to peers. The key question is how to...

Haier to merge with RAAS, enhancing dominance in blood products industry and improving financial performance.The deal is clearly more beneficial...