IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Novotech Holdings / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/novotech-health-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33411:1" rel="noopener">Novotech Holdings (NVT HK)</a> is a global contract research organisation (CRO). Novotech is the third-largest Asia-Pacific-based CRO and the largest biotech-specialist CRO in the Asia-Pacific region, both in terms of revenue in 2020, according to Frost &amp; Sullivan. The controlling shareholder is TPG and the other shareholders include GIC, Kaiser Foundation Hospitals and Sequoia Capital. Novotech has started pre-marketing an HKEx IPO to raise up to $1.5 billion, according to press reports.In <a href="https://www.smartkarma.com/insights/novotech-health-ipo-initiation-on-demand-science" target="_blank" data-smartkarma-citation="insights:57198" rel="noopener">Novotech Health IPO Initiation: On-Demand Science</a>, we noted that, unlike other H-listed CRO peers, Novotech gives investors an avenue to gain exposure to the broader Asia-Pacific CRO industry. We concluded that Novotech’s fundamentals are solid and the IPO is worth a look for investors willing to brave the current weak sentiment on HKEx IPOs. <div class="content-highlight">In this note, we examine the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we continue to maintain our view that the fundamentals look attractive. </div>

Novotech Holdings (NVT HK) is a global contract research organisation (CRO). Novotech is the third-largest Asia-Pacific-based CRO and the largest biotech-specialist CRO in the Asia-Pacific region, both in terms of revenue in 2020, according to Frost &amp; Sullivan. The controlling shareholder is TPG and the other shareholders include GIC, Kaiser Foundation Hospitals and Sequoia Capital. Novotech has started pre-marketing an HKEx IPO to raise up to $1.5 billion, according to press reports.In Novotech Health IPO Initiation: On-Demand Science, we noted that, unlike other H-listed CRO peers, Novotech gives investors an avenue to gain exposure to the broader Asia-Pacific CRO industry. We concluded that Novotech’s fundamentals are solid and the IPO is worth a look for investors willing to brave the current weak sentiment on HKEx IPOs. In this note, we examine the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we continue to maintain our view that the fundamentals look attractive. 

Novotech Health IPO: A Solid Start to 2021

<a href="https://www.smartkarma.com/entities/novotech-health-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33411:1" rel="noopener">Novotech Holdings (NVT HK)</a> is a global contract research organisation (CRO). Novotech is the third-largest Asia-Pacific-based CRO and the largest biotech-specialist CRO in the Asia-Pacific region, both in terms of revenue in 2020, according to Frost &amp; Sullivan.The controlling shareholder is TPG and the other shareholders include GIC, Kaiser Foundation Hospitals and Sequoia Capital. Novotech is set to pre-market an HKEx IPO to raise up to $1.5 billion, according to press reports.While the Chinese regulatory reset has wreaked havoc on several sectors, investor sentiment on the China CRO industry remains relatively solid with the H-shares of <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a> and <a href="https://www.smartkarma.com/entities/pharmaron-beijing-co-ltd" target="_blank" data-smartkarma-citation="entities:28428:1" rel="noopener">Pharmaron Beijing Co Ltd-H (3759 HK)</a> up 18% and 30% YTD, respectively.<div class="content-highlight">Unlike other H-listed CRO peers, Novotech gives investors an avenue to gain exposure to the broader Asia-Pacific CRO industry. On balance, we think that Novotech’s fundamentals are solid and the IPO is worth a look for investors willing to brave the current weak sentiment on HKEx IPOs. </div>

Novotech Holdings (NVT HK) is a global contract research organisation (CRO). Novotech is the third-largest Asia-Pacific-based CRO and the largest biotech-specialist CRO in the Asia-Pacific region, both in terms of revenue in 2020, according to Frost &amp; Sullivan.The controlling shareholder is TPG and the other shareholders include GIC, Kaiser Foundation Hospitals and Sequoia Capital. Novotech is set to pre-market an HKEx IPO to raise up to $1.5 billion, according to press reports.While the Chinese regulatory reset has wreaked havoc on several sectors, investor sentiment on the China CRO industry remains relatively solid with the H-shares of WuXi AppTec Co. Ltd. (2359 HK) and Pharmaron Beijing Co Ltd-H (3759 HK) up 18% and 30% YTD, respectively.Unlike other H-listed CRO peers, Novotech gives investors an avenue to gain exposure to the broader Asia-Pacific CRO industry. On balance, we think that Novotech’s fundamentals are solid and the IPO is worth a look for investors willing to brave the current weak sentiment on HKEx IPOs. 

Novotech Health IPO Initiation: On-Demand Science

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Asymchem Laboratories Tianjin / Equity Bottom-Up

On August 15, 2021, <a href="https://www.smartkarma.com/entities/asymchem-laboratories-tianjin-co-ltd" target="_blank" data-smartkarma-citation="entities:28265:1" rel="noopener">Asymchem Laboratories (002821 CH)</a> released its 2021/1H financial results. In the first half of 2021, the revenue of Asymchem was RMB1.76 billion, up 39.04% YoY. Net profit attributed to shareholders was RMB429 million, up 36.03% YoY. Net profit after deducting non-recurring gains and losses was RMB353 million, up 27.29% YoY. Obviously, the market is not satisfied with the performance. On August 16, Asymchem share price decreased by 10%. Meanwhile, the star institution Hillhouse Capital significantly reduced its holdings of about 2.2 million shares, which could lead to more concerns from the investors. This article mainly analyzed the performance of Asymchem in 2021/1H, the concerns and the outlook of the Company.

On August 15, 2021, Asymchem Laboratories (002821 CH) released its 2021/1H financial results. In the first half of 2021, the revenue of Asymchem was RMB1.76 billion, up 39.04% YoY. Net profit attributed to shareholders was RMB429 million, up 36.03% YoY. Net profit after deducting non-recurring gains and losses was RMB353 million, up 27.29% YoY. Obviously, the market is not satisfied with the performance. On August 16, Asymchem share price decreased by 10%. Meanwhile, the star institution Hillhouse Capital significantly reduced its holdings of about 2.2 million shares, which could lead to more concerns from the investors. This article mainly analyzed the performance of Asymchem in 2021/1H, the concerns and the outlook of the Company. 

Asymchem Laboratories (002821.CH) 2021H1 Results - Not Good Enough

Ambio Pharmaceuticals / Equity Capital Markets

On June 25, 2021, <a href="https://www.smartkarma.com/entities/ambio-pharmaceuticals" target="_blank" data-smartkarma-citation="entities:33696:1" rel="noopener">Ambio Pharmaceuticals (ABP HK)</a> filed a prospectus with the HKEX and officially started its IPO process. Ambio is a leading peptide CDMO and also the fourth largest peptide CDMO service provider globally in terms of revenue in 2020. This insight mainly analyzed the industry characteristics, the business and the concerns of the Company.

On June 25, 2021, Ambio Pharmaceuticals (ABP HK) filed a prospectus with the HKEX and officially started its IPO process. Ambio is a leading peptide CDMO and also the fourth largest peptide CDMO service provider globally in terms of revenue in 2020. This insight mainly analyzed the industry characteristics, the business and the concerns of the Company.

Pre-IPO Ambio Pharmaceuticals - The Particularity of Peptide Drugs, the Strength and the Concerns

Asymchem Laboratories Tianjin / Equity Capital Markets

On June 28, 2021, <a href="https://www.smartkarma.com/entities/asymchem-laboratories-tianjin-co-ltd" target="_blank" data-smartkarma-citation="entities:28265:1" rel="noopener">Asymchem Laboratories (002821 CH)</a>, the fifth largest drug substance CDMO globally and the largest China-based commercial stage chemical drug CDMO, submitted its listing application to the HKEX, which means that, after <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a>, <a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-co-ltd-1008d609-73bd-4d76-8315-b29502a448ff" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK) </a>and <a href="https://www.smartkarma.com/entities/pharmaron-beijing-co-ltd" target="_blank" data-smartkarma-citation="entities:28428:1" rel="noopener">Pharmaron Beijing Co Ltd-H (3759 HK)</a>, there would be another A+H listed CXO company in China. This insight mainly analyzed the industry characteristics, the strength and the concerns of Asymchem.

On June 28, 2021, Asymchem Laboratories (002821 CH), the fifth largest drug substance CDMO globally and the largest China-based commercial stage chemical drug CDMO, submitted its listing application to the HKEX, which means that, after WuXi AppTec Co. Ltd. (2359 HK), Hangzhou Tigermed Consulting (H) (3347 HK) and Pharmaron Beijing Co Ltd-H (3759 HK), there would be another A+H listed CXO company in China. This insight mainly analyzed the industry characteristics, the strength and the concerns of Asymchem.

Pre-IPO Asymchem Laboratories - The Strength and the Concerns

China

Hangzhou Tigermed Consulting Company Limited provides professional clinical research services for domestic and foreign pharmaceutical and health-related research and development. The Company's main services include clinical trial technology services, data management, and statistical analysis.

Hangzhou Tigermed Consulting (A) (300347 CH)

Pharmaron Beijing Co., Ltd. engages in discovery, development, and manufacturing spectrum for small molecule drugs, cell therapies, and gene therapies as well as providing testing services for medical devices and clinic research. The Company offers laboratory, clinical development, chemistry manufactory and control, and other services. Pharmaron Beijing conducts businesses based in China.

Joinn Laboratories (China) Co., Ltd. operates as a medicines development company. The Company offers drug development, pharmaceutical analysis, pharmacologic testing, and other related services. Joinn Laboratories (China) also provides pesticide and medical device safety evaluation services.

Maccura Biotechnology Co., Ltd. specializes in the research, development, manufacturing, sales, and service of in-vitro diagnostic products. The Company provides biochemistry, immunity, rapid detection, blood, molecular diagnosis, pathology, raw materials, and more. Maccura Biotechnology conducts business in China.

Guangzhou Boji Medical & Biotechnological Co., Ltd. is an outsourcing drug research and development company. The Company provides pharmaceutical companies the ability to conduct its researches and developments at lower cost levels and offers support to bring drugs and devices to the Chinese market quicker.

CSPC Pharmaceutical Group Limited, through its subsidiaries, manufactures and sells pharmaceutical products.  The Company's products include vitamin C, antibiotics and common generic drugs. The Company is also engages in the development of innovative drugs and antibiotics.

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. manufactures and markets Chinese traditional medicines, including Pientzehuang, Pientzehuang capsules, Pientzehuang lozenge, cough syrup, and other related products.

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd.

Guangzhou Improve Medical Instruments Co., Ltd. researches, develops, and manufactures medical instruments. The Company's products include evacuated blood collection system, microbe specimen collection and transport, clinical testing reagent, equipment for clinical specimen testing & processing, etc.

Yunnan Baiyao Group Co., Ltd. manufactures and markets traditional Chinese medicines.  The Company also operates in pharmaceutical wholesale and retail trading, empty capsules manufacturing, and hotel operation.

Divi's Laboratories Ltd. manufactures pharmaceutical products which include generic drugs and their intermediates. The Company also undertakes contract research activities for other pharmaceutical companies.

Charles River Laboratories International, Inc. provides research tools and support services that enable drug discovery and development.  The Company provides the animal research models required in research and development for new drugs, devices, and therapies.  Charles River's customers include pharmaceutical and biotechnology companies, hospitals, and academic institutions.

Illumina, Inc. develops, manufactures and markets integrated systems for the large scale analysis of genetic variation and biological function. The Company provides a comprehensive line of products and services that currently serve the sequencing, genotyping and gene expression markets for genomic research centers, pharmaceutical companies, academic institutions and biotechnology companies.

Bio-Techne Corp develops, manufactures and sells biotechnology products and clinical diagnostic controls. The Company specializes in proteins, cytokines, growth factors, immunoassays and small molecules.

Bruker Corporation designs, manufactures, and markets proprietary  life science systems based on spectrometry technology platforms.  The Company  also sells a range of field analytical systems for substance detection and  pathogen identification.  Bruker develops life science and advanced materials  research tools based on X-ray technology.

QIAGEN N.V. is a global provider of Sample to Insight solutions to transform biological materials into valuable molecular insights. The Company provides its workflows to customers in Molecular Diagnostics (human healthcare), Applied Testing (forensics, veterinary testing and food safety), Pharma (pharmaceutical and biotechnology companies) and Academia (life sciences research).

Medpace Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides cardiovascular, hematology, oncology, neurology, pediatrics, nephrology, and diagnostic services. Medpace Holdings serves patients worldwide.

Avantor, Inc. manufactures and distributes chemicals, reagents, and laboratory supplies. The Company offers amino acids, silicones, bioreagents, denaturants, gas, solvents, stains, dyes, and minerals. Avantor serves biopharma, healthcare, education and government, advanced technologies, life sciences, and applied materials industries worldwide.

Bio-Rad Laboratories, Inc. is a multinational manufacturer and distributor of life science research products, clinical diagnostics, and analytical instrumentation.  The Company's products and systems separate complex chemical and biological materials, as well as identify, analyze, and purify their components.

Bachem Holding AG specializes in the development and manufacture of peptides and oligonucleotides. The Company provides products for research, clinical development and commercial application to pharmaceutical and biotechnology companies. Bachem Holding serves customers worldwide.

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

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WuXi AppTec (603259 CH)

Novotech Health IPO: A Solid Start to 2021

We examine the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we continue to maintain...

Arun George

Novotech Health IPO Initiation: On-Demand Science

Novotech is set to pre-market an HKEx IPO to raise up to $1.5 bn. Novotech’s fundamentals are solid and the IPO is worth a look for investors...

Arun George

Asymchem Laboratories (002821.CH) 2021H1 Results - Not Good Enough

This article analyzed Asymchem in terms of its 2021/1H financial results, the comparison with peers, the concerns on growth, the valuation and the...

Xinyao (Criss) Wang

Pre-IPO Ambio Pharmaceuticals - The Particularity of Peptide Drugs, the Strength and the Concerns

The article mainly analyzed Ambio Pharmaceuticals in terms of the particularity of peptide drugs & industry characteristics, the strength of its...

Xinyao (Criss) Wang

Pre-IPO Asymchem Laboratories - The Strength and the Concerns

The article mainly analyzed Asymchem Laboratories in terms of the industry characteristics, the strength of its business, the comparison with...

Xinyao (Criss) Wang

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