On July 30, the listing of Kangxinuo Biology Entrepreneurship Board is approaching, priced at 209.71 yuan, or HK $232.128, and yesterday's closing price of H shares was HK $246, which was cheaper than that of Hong Kong shares. Today, Kangxinuo biological H shares rose again by 10%, and the company's share price has soared by 354% so far this year, making it a Hong Kong stock. Science and Technology Innovation Board is looking forward to the trend. But Junshi creaturesSMICWill the negative decline repeat itself? Why are H shares keen on Science and Technology Innovation Board listing? What is the investment logic of Kangchino biology?

Kangxinoko pioneer board discount issue, how to calculate the total market value?

The announcement shows that according to the results of the preliminary inquiry, the issuer and the co-lead underwriter have negotiated and determined that the price of this issue is 209.71 yuan per share, and the offline offering will no longer conduct a cumulative bid inquiry. It is worth noting that Kangxinuo will formally apply for the purchase on Friday, the application code is 787185, and the Shanghai stock market capitalization of 45000 yuan is required for Dingge.

As for the company's discount offering, Pang Ming, chief strategist at Huaxing Securities, said that the company chose to issue at a discount because domestic investors do not yet understand the valuation logic, methods and models of unprofitable biomedical companies.

Yan Zhaojun, an analyst at Sino-Thai International Strategy, said that at that time, Junshi was also the same. No matter the A-share discount or premium issue, it must have skyrocketed on the day of listing, and the result was that A-share was higher than H-share, so there was no difference between Kangxinuo's discount issue.

Kangxinuo Biology Entrepreneurship Board issued 24.8 million shares and 222.65 million H shares. After this issue, the total share capital has increased to 247 million shares. Based on Science and Technology Innovation Board's offering price, A shares will have a market capitalization of at least HK $5.757 billion. Based on Science and Technology Innovation Board's average first-day increase of 167%, the company's share price will be as high as HK $620, and the successful signing of Cangxino may make a big profit of more than 170000 yuan. At that time, Science and Technology Innovation Board's market capitalization will be as high as 15.376 billion Hong Kong dollars.

So, suppose Kangxinuo Bio rose 167% and the company's share price reached HK $620, would the total market capitalization of the company be HK $620 * (2.22650.248) = HK $153.4 billion?

Last time, the whole network made a joke, most of the media said that SMIC's market capitalization was as high as 600 billion yuan. At that time, we wrote that A shares were quoted at 89.1 yuan, equivalent to HK $9.884 billion, H shares were quoted at HK $32, AH premium was 3.09 times, and A shares were valued at more than 300 times. Obviously, this market capitalization is very empty, at least for now, H shares did not give a share price as high as 90 yuan. Therefore, a more reasonable method of market capitalization calculation is A share price * A share capital + Hong Kong stock price * Hong Kong share capital = 1502-1561 = 306.3 billion yuan. (intraday data)

So, will the market value of Kangxinuo Biology jump this time, with a market capitalization of much more than 100 billion yuan?

Assuming that Kangxinoko's gem rises by 167%, the company's Science and Technology Innovation Board share price will more than double its premium, meaning that the market capitalization of HK $150 billion is still inflated. A more reasonable calculation is still A share price * A share capital + Hong Kong stock price * Hong Kong share capital = 153.76 to 598 = HK $75.2 billion.

Will SMIC appear in the H-shares on the day of Kangxinuo's listing?

On the day of SMIC's Science and Technology Innovation Board listing, the AH premium rate was easily tripled and profit-making funds fled sharply. At one point, the H-share price plummeted 27 per cent, closing down 25 per cent, with an offer of HK $28.75. based on the share capital of the H shares, SMIC lost at least HK $50 billion in market value.

According to wind data, SMIC's H shares traded 710 million shares, involving 22.6 billion shares, 26 times the volume of King Tencent, and nearly 2 times the turnover.

So, will there be a sell-off in the company's H-share price on the day Kangxinuo goes public?

Pang Ming said that the recent reaction of H shares to the Kochuang version of the roadshow is relatively positive, coupled with the hot pursuit of the vaccine concept in the global stock market over the past week, the performance is expected to be good.

"Biopharmaceuticals is a relatively scarce sector for Kochuang, and domestic investors may be willing to pay higher valuations for this scarcity," he said. But I would like to note that as more and more companies log in to start-ups and A-share capital market reform in an all-round way, the scarcity of the listed targets of scientific and technological innovation and the scarcity of the scientific and technological innovation itself are likely to decline.

Yan Zhaojun said that the share price of Kangxinuo is similar to that of SMIC and Junshi Bio, which is also speculated higher before the A-share inquiry is not listed, but the H-share prices of the latter two shares are given back rapidly immediately after the A-share listing. Beware of the adjustment that H shares will also cash in good news after the day of listing.

He said that as the share prices of AH are not interchangeable and investors cannot carry out arbitrage, in fact, the rise in the valuation of A shares may not necessarily improve the valuation of H shares. As a matter of fact, at present, the premium of many AH shares has not been narrowed, but has increased. Therefore, investors cannot unilaterally expect a rise in A-shares to boost H-share valuations. However, from a long-term point of view, the company's research and development strength is very strong, and the vaccine is making good progress, if the future phase III clinical trials are successful, it will bring another catalyst to the stock price.

Daniel stock Kangxino, it is not easy to get rid of the market doubt.

Kangxinuo Biology is an innovative vaccine company dedicated to R & D, production and sales. It landed in Hong Kong in March 2019. Since its listing, its share price has soared 11 times, which is undoubtedly 10 times that of Daniel. It is the well-known "COVID-19 Vaccine first share" in the Hong Kong stock market. The company's share price has also risen 3.6 times this year, taking advantage of the COVID-19 vaccine.

Kangxinuo Biology, founded in Tianjin in 2009, is a vaccine research and development company founded by a team of senior executives of multinational pharmaceutical companies. According to the company's shareholding structure, Yu Xuefeng, Qiu Dongxu, Chao Shoubai and Mao Huihua are concerted actors and actual controllers of the company, holding about 31% of the company. Among them, Yu Xuefeng is currently chairman of the board, chief executive officer and general manager of Kangxinuo Biological Co., Ltd.

At present, the company has established four core technology platforms based on adenovirus vector vaccine technology, protein structure design and recombination technology, binding technology, and preparation technology. The first product, Ebola vaccine Ad5-EBOV, has been approved by new drugs in 2017, and two meningococcal vaccines (MCV2 and MCV4) have been submitted for listing. In addition, the company's 13-valent pneumococcal conjugate vaccine and full-age diphtheria tetanus vaccine are also in clinical trials.

After the emergence of COVID-19 's epidemic situation, the company jointly developed the recombinant novel coronavirus vaccine (adenovirus vector) "Ad5-nCoV" with the Institute of Biological Engineering of the Academy of military Medicine of the Academy of military Sciences, which has passed the clinical research registration and evaluation and has been approved to enter the clinical trial.

However, the company is still subject to all kinds of skepticism.

First of all, the company is an unprofitable biotech company, which is still a new track for A-shares, and it remains to be seen whether it will be recognized by investors.

So far, Kangxinuo's vaccine products have not been commercially sold, and the company has not made a profit during the reporting period. According to the prospectus, Kangxinuo achieved revenue of 4.03 million yuan in the first quarter of 2020, an increase of 605.1% over the same period last year, while the net loss attributed to shareholders of the parent company was 23.103 million yuan, a year-on-year decrease of 48.9%.

For non-profit biotech companies, Hong Kong stock funds are constantly sought after. Some people in the industry even shouted that "Hong Kong stocks Class B stocks must hit the new market". Sina Hong Kong stock statistics found that since the beginning of this year, six Class B shares have been listed, of which five have made a profit, and Peijia Medical and Kang Fang Bio have made a net profit of more than HK $10,000 per hand.

Secondly, how effective is the recombinant adenovirus vector vaccine?

The COVID-19 vaccine from the University of Oxford failed to prevent monkeys from being infected by novel coronavirus in a trial on May 21, which focused on recombinant adenovirus vector vaccines and inactivated vaccines. The researchers found that rhesus monkeys vaccinated with recombinant adenovirus vectors were infected by novel coronavirus. It can be seen that the recombinant adenovirus vector vaccine does not provide immunity to virus attack and has no protective effect. And Kangxinuo is in the development of adenovirus vector vaccine, the company's share price also plummeted 20% of class B shares even staged a slump.

On May 25th, Kangxinuo announced the results of the phase I clinical trial of recombinant novel coronavirus vaccine (adenovirus vector). The research paper has been published in the Lancet. The results showed that Ad5 vector COVID-19 vaccine could be tolerated 28 days after inoculation and had immunogenicity.

The company began the phase II clinical trial in April and completed the phase II clinical trial on June 11. On June 25, the COVID-19 vaccine was approved by the Health Bureau of the Logistics support Department of the Central military Commission, which is valid for one year.

The Lancet published a research paper on the results of clinical trial II of the recombinant COVID-19 vaccine, which showed that most of the subjects had a significant immune response after single injection immunization, Kangxinuo announced on July 21.

Pang Ming said that adenoviruses are mainly faced with the problem of pre-stored immunity, the human adenovirus used by Kangxinuo, so the problem of pre-stored immunity is more difficult, and the risks associated with company vaccines should be paid attention to in the future. The Oxford University project team used animal adenoviruses, and it was expected that the results were better.

Huajin Securities said that domestic enterprises are currently focused on the adenovirus pathway, and the technology is relatively mature, but some studies have also pointed out that after the adenovirus is injected into the human body, it is likely to be cleared by the immune system, thus will not produce COVID-19 antibody.

Finally, the shareholders of the company significantly reduced their holdings of the company.

On March 2nd and 4th of this year, OrbiMed Capital LLC reduced its holdings in the company for two consecutive days, totaling 1.2 million shares, from 6 per cent to 4.65 per cent, cashing out about HK $100m.

On April 9, Shi Yi, the company's main shareholder, reduced its holdings by 5.45 million shares, cashing out 770 million, and reducing its position by 21%.

JPMorgan began to sell its holdings for the first time in March. On March 19, it reduced its holdings of 440000 shares to cash out 32 million; on May 14, it reduced its holdings of 140000 shares to about 25 million; on May 21, it cashed out 4.88 million shares to HK $1.15 billion. It has cashed out a total of 1.2 billion, and its shareholding has fallen to 3.39 per cent from 7 per cent on May 19. On May 21, the huge sell-off of Motorola became the catalyst for the collapse of Class B shares on that day, and the company's share price still failed to reach the level before the reduction of its holdings.

The return of Hong Kong stock Science and Technology Innovation Board has become a craze, and the effect of making money is prominent.

Hong Kong listed companies are actively listed on Kechuang Board, whether it is spin-off listing, AH listing at the same time, or delisting from Hong Kong stocks to Hong Kong listing.

China General accountZhangjiang, Fudan, Junshi Biological, SMIC and other Hong Kong stock companies have returned to Kechuang Board for listing. And every time before listing, the general Hong Kong stock listed companies will be hyped.

On March 19, Junshi Bio announced its return to A shares, and the company was the first to rise 7% on the 18th. From the announcement date to the day before its listing on July 15, the Hong Kong stock Junshi Bio increased by 109.5%.

On May 5, SMIC announced its return to A-shares, and its share price rose 11% the next day. From the announcement date to the day before the listing on July 16, the company's share price has risen 152%.

For the return of Hong Kong technology stocks, on the one hand, the change of Science and Technology Innovation Board rules allows unprofitable companies to be listed on the stock market; on the other hand, return to Kechuang Board can enjoy high valuation dividends.

Yu Haoliang, an assistant analyst at Zhongtai International, said that the listing threshold of Hong Kong stock main board and A-share gem board has tended to be similar: 1) the examination and approval system is a registration system, 2) enterprises with VIE structure can be listed, 3) unprofitable companies can be listed, and 4) companies with different rights of the same shares can be listed, so it is easier for companies that have been listed in Hong Kong shares to meet Science and Technology Innovation Board's listing requirements if they return to A shares. In addition, Hattora's model also enables enterprises to obtain refinancing opportunities, which expands the influence of the company.

Yu Haoliang said that compared with the Hong Kong stock market, A-share market has three major characteristics: 1) the A-share market is dominated by Chinese investors, and there is no overseas investors who do not have a deep understanding of Chinese corporate culture. Corporate products and business conditions are not fully familiar with and other problems; 2) A-share market is dominated by individual investors, which is more perceptual than institutional investors. And (3) driven by monetary easing in the mainland, the overall valuation level of A shares is higher than that of Hong Kong stocks.

Qin Yue, Assistant Vice President of Sino-Thai International Research Department, made a list of potential Hong Kong stocks listed on Kechuang Board:Fuhong Hanlin-B、Kangshino organism-B、Stone Pharmaceutical Group、Yisheng biotechnology、China Resources Medicine、Kangchen Pharmaceutical Co., Ltd.、Chinese traditional medicine、Chunli Medical treatment、Vega sharesVegor orthopaedic materials,Shanghai Fudan、Huahong semiconductor、BYDBYD Semiconductor,Geely car、Celestial energy powerThe celestial energy battery,Shanghai ElectricElectrical and wind power,China Railway ConstructionJD.com of Railway Construction heavy Industry, JD.com,NetDragonThe educational business.

It is worth noting that at present, Kangxino, Weigao, Chunli Medical, Fuhong Hanlin, Shanghai Fudan, Geely Automobile, Tianneng Power, Shanghai Electric, China Railway Construction, JD.com are interested in or are on their way back to Science and Technology Innovation Board. (text / Stone)