Frost & Sullivan, TradeGo, and LeadLeo jointly released the 'Blue Book on the Development of the Hong Kong 18A & Sci-Tech Innovation Board Biotech Industry in 2023' (with full access available upon purchase)

Report Release Venue

Mr. Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China Region

Report Release Venue

From right: Dr. Yang Jianxin, CEO and Executive Director of Cornerstone Pharmaceuticals; Ms. Liu Zheng, Head of Capital Markets at Lüzhú Biology; Ms. Cheng Xi, IR Manager at Beikang Medical; Mr. Mao Hua, Partner and Managing Director of Frost & Sullivan Greater China Region

As of August 31, 2023, there is one constituent stock in the Hong Kong 18A Biotechnology Index with a market value exceeding 100 billion RMB, accounting for 30.0% of the weight; there are three listed companies with a market value of at least 30 billion RMB but less than 100 billion RMB, accounting for 21.0% of the weight; and seven listed companies with a market value of at least 10 billion but less than 30 billion RMB, accounting for 19.0% of the weight. Together, these three categories account for 79.0%. Overall, there are fewer companies with large market values among its constituent stocks. However, since the index is weighted by market value, larger listed companies have a higher proportion of weight. There are 49 companies with a market value less than 10 billion RMB, accounting for 30.0% of the weight, reflecting that the overall market value distribution of the Hong Kong 18A Biotechnology Index is relatively balanced.

Source: Wind, Hong Kong Exchange, Frost & Sullivan analysis

As of August 31, 2023, among the biotechnology companies listed through the fifth listing criterion of the Sci-Tech Innovation Board, there is one stock with a market value exceeding 30 billion RMB, accounting for 14.4% of the weight; two stocks with a market value of 20 billion RMB or more but less than 30 billion RMB each, accounting for 22.6% of the weight; and six stocks with a scale of 10 billion RMB or more but less than 20 billion RMB, totaling six stocks, which together account for 69% of the total. Overall, there are no companies with a market value exceeding 1000 billion RMB, and the total market value is relatively small, with most being companies with a scale less than 10 billion RMB, totaling 11 companies, accounting for 31.0% of the total market value, indicating a relatively balanced distribution of overall market value.

Source: Wind, Shanghai Exchange, Frost & Sullivan analysis

The 'Blue Book' provides a detailed analysis of the index performance, market value, and sub-industries of the Hong Kong 18A/Sci-Tech Innovation Board biotech market, company list, valuation levels and performance for 2023, as well as information on the investment and financing environment. For more detailed content, please refer to the full report.

Source: Analysis by Frost & Sullivan

From 2017 to 2021, the market scale of China's pharmaceutical industry increased from 1,430.4 billion yuan to 1,591.2 billion yuan, with an annual compound growth rate of 2.7%. The market saw a slight decline in 2020 due to the impact of the COVID-19 pandemic. In the future, China's pharmaceutical market will expand at a rate exceeding that of the global pharmaceutical market. The annual compound growth rates from 2021 to 2025 and from 2025 to 2030 are expected to reach 6.7% and 5.8%, respectively, with the market scale increasing to 2,064.5 billion yuan and 2,739 billion yuan by 2025 and 2030, respectively.

The 'Blue Book' conducts an in-depth analysis of the market scale and driving factors of biomedicine in China. It elaborates on small molecule chemical drugs, antibody drugs, human vaccines, nucleic acid drugs, peptide drugs, cell and gene therapy drugs, etc., from dimensions such as product characteristics, market scale, and development trends. It analyzes five major hot tracks: anti-tumor drugs, digestive tract and metabolic drugs, cardiovascular drugs, systemic anti-infective drugs, and central nervous system drugs, from dimensions such as industry introduction, development drivers, development trends, and market scale. For more detailed content, please refer to the full report.

The development of the medical device market in China started relatively late but has been developing at a rapid pace. From 2017 to 2021, the scale of the medical device market in China increased from 440.3 billion yuan to 843.8 billion yuan, with a compound annual growth rate of 17.7%. It is estimated that by 2025, the scale of the medical device market in China will reach 1244.2 billion yuan, and by 2030, the market scale will further expand to 1660.6 billion yuan.

The 'Blue Book' conducts an in-depth analysis of the scale and driving factors of China's medical device market. It elaborates on in vitro diagnostic devices, medical imaging equipment, cardiovascular interventional devices, orthopedic devices, ophthalmic devices, dental devices, surgical robots, and artificial intelligence (AI)-enabled medical imaging from dimensions such as basic concepts, product characteristics, market scale, and development trends. For more detailed content, please refer to the full report.

Pre-listing financing can not only solve the financial difficulties faced by enterprises during production and R&D but also directly reflect the value of the company's R&D pipeline at each R&D milestone, thereby driving up the company's valuation. As of August 31, 2023, 60 18A companies have gone public (12 companies have had their -B flag removed and are included in the following statistical analysis), and among these listed 18A companies (excluding Chinese concept stocks returning to the market), they have all undergone financing at varying rounds before going public. This not only complies with the listing rules for 18A companies set by the Hong Kong Stock Exchange but also aligns more closely with the actual situation of 18A companies in production and operations.

As shown in the chart below, among the 18 A-share listed companies, those with a pre-listing valuation increase ranging from 10 to 50 times have the most data. Most companies had 2 to 6 rounds of financing before listing, and there are a total of 50 such companies, accounting for 86.21% of all 18 A-share listed companies.

Source: Analysis by Frost & Sullivan

The 'Blue Book' provides an in-depth analysis of the situations of 18 A-share listed companies and the fifth batch of companies on the Sci-tech Innovation Board in Hong Kong from three stages: pre-exhibition, during the exhibition, and post-exhibition. For more detailed content, please refer to the full report.