Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<p><a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> , the largest online healthcare platform and retail pharmacy in China started trading on the 7<sup>th</sup> of December. The company set the final IPO pricing at the upper end of the IPO price range of HK$70.58 per share and raised net proceeds of HK$26.46bn (approximately US$3.41bn).</p><p>JD Health’s shares had a bold debut at the IPO, hitting an intra-day high of HK$123.3 per share, about 75% higher than the IPO price. The company’s shares are currently trading at HK$166 per share (end of today’s trading), a 135% increase compared to the IPO price of HK$70.58 per share.</p><p>In our previous insights on the company’s IPO, we examined the company’s business model, financials, valuations and a comparison with its peers.</p><p>We highlighted that the company has a strong business model which is poised to benefit from the structural changes in the Chinese healthcare market that is currently shifting towards digitisation. Moreover, the Covid-19 outbreak has further accelerated this transition towards online channels, and we believe the company’s business is sustainable beyond Covid-19.</p>

JD Health (6618 HK) , the largest online healthcare platform and retail pharmacy in China started trading on the 7th of December. The company set the final IPO pricing at the upper end of the IPO price range of HK$70.58 per share and raised net proceeds of HK$26.46bn (approximately US$3.41bn).JD Health’s shares had a bold debut at the IPO, hitting an intra-day high of HK$123.3 per share, about 75% higher than the IPO price. The company’s shares are currently trading at HK$166 per share (end of today’s trading), a 135% increase compared to the IPO price of HK$70.58 per share.In our previous insights on the company’s IPO, we examined the company’s business model, financials, valuations and a comparison with its peers.We highlighted that the company has a strong business model which is poised to benefit from the structural changes in the Chinese healthcare market that is currently shifting towards digitisation. Moreover, the Covid-19 outbreak has further accelerated this transition towards online channels, and we believe the company’s business is sustainable beyond Covid-19.

JD Health IPO Trading Update: Be Ready to Buy if It Drops Post Index Inclusion

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

Alibaba Health Information Tec / Equity Bottom-Up

<p>This Insight summarizes the takeaways from a recent China healthcare industry conference focused on biopharmaceuticals and medical devices, and builds on our Originals Insight <a href="https://www.smartkarma.com/insights/asian-healthcare-coming-of-age" target="_blank" data-smartkarma-citation="insights:45676" rel="noopener">Asian Healthcare - Coming of Age</a>.  Topics addressed include value-based purchasing for drugs and devices; development of commercial health insurance; internet hospitals and online pharmacies; DRGs for hospitals; issues for medical device companies; and amendments to China's patent laws.</p>

This Insight summarizes the takeaways from a recent China healthcare industry conference focused on biopharmaceuticals and medical devices, and builds on our Originals Insight Asian Healthcare - Coming of Age.  Topics addressed include value-based purchasing for drugs and devices; development of commercial health insurance; internet hospitals and online pharmacies; DRGs for hospitals; issues for medical device companies; and amendments to China's patent laws.

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<p style="text-align: justify;"><a target="_blank"></a>In recent years, China digital healthcare industry has grown rapidly. The increasing cost of diseases and traditional medical treatment provides potential impetus for the long-term development of digital medicine. Especially during the epidemic, digital medical tools have helped people make full use of existing medical resources. Methods such as real-time epidemic information broadcast, Internet diagnosis and treatment platform, and remote drug purchase have all played an important role in the epidemic. Comprehensive intelligent digital healthcare treatment is gradually accepted and recognized by people, and will become the new direction of the development in the post-epidemic era (Related companies: <a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a>, and <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)).</a></p>

In recent years, China digital healthcare industry has grown rapidly. The increasing cost of diseases and traditional medical treatment provides potential impetus for the long-term development of digital medicine. Especially during the epidemic, digital medical tools have helped people make full use of existing medical resources. Methods such as real-time epidemic information broadcast, Internet diagnosis and treatment platform, and remote drug purchase have all played an important role in the epidemic. Comprehensive intelligent digital healthcare treatment is gradually accepted and recognized by people, and will become the new direction of the development in the post-epidemic era (Related companies: JD Health (6618 HK), Alibaba Health Information Technology (241 HK), and Ping An Healthcare and Technology Company Limited (1833 HK)).

Industry Report - Insights on China Digital Healthcare Industry

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

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<p><em>This week in StubWorld ...</em></p>
<p><a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> was listed on the 8 December at an IPO price of <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1207/9539949/2020120700123.pdf" target="_blank" rel="noopener">HK$70.58</a>, towards the top-end of its price range, and has traded up ~88% to HK$132.50/share, with a current market cap of US$52.7bn. </p>
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<p>JDH is the spin-off of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a> / <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, which owns <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1208/2020120800216.pdf" target="_blank" rel="noopener">68.73%</a> in JDH after the IPO, down from 81.04% pre-IPO.</p>
<p>That stake is worth US$36.5bn, or around 30% of its current market cap, therefore this is not a super strong parent/subsidiary relationship. </p>
<p>Yet the implied stub is trading at a not-undemanding forward PER of 34x, for a company with a three-year net profit CAGR of 44%.</p>
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<p>Preceding my comments on JD.com are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...
JD Health (6618 HK) was listed on the 8 December at an IPO price of HK$70.58, towards the top-end of its price range, and has traded up ~88% to HK$132.50/share, with a current market cap of US$52.7bn. 


JDH is the spin-off of JD.com (HK) (9618 HK) / JD.com Inc (ADR) (JD US), which owns 68.73% in JDH after the IPO, down from 81.04% pre-IPO.
That stake is worth US$36.5bn, or around 30% of its current market cap, therefore this is not a super strong parent/subsidiary relationship. 
Yet the implied stub is trading at a not-undemanding forward PER of 34x, for a company with a three-year net profit CAGR of 44%.




Preceding my comments on JD.com are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.



Equity Capital Markets

JD Health International  / Equity Capital Markets

<p style="text-align: justify;">On Dec 8<sup>th</sup>, <a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> went public on Hong Kong Stock Exchange, making it the largest IPO in Asia in 2020. Stock price of JD Health jumped more than 55% on the first day of trading. As of December 11<sup>th</sup>, its closing price was HK$112, with a total market value of HK$381.5 billion, not only more than the market value of <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a> and <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK),</a> but also surpassed a third of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a>'s latest market value of about HK$1 trillion. Getting the favor of the capital markets is only the first step on the journey. After the COVID-19, will its performance continue to achieve such high growth? In addition to online pharmacy business, how could JD Health find new and sustainable business growth points so as to establish its core competitive advantages? </p>

On Dec 8th, JD Health (6618 HK) went public on Hong Kong Stock Exchange, making it the largest IPO in Asia in 2020. Stock price of JD Health jumped more than 55% on the first day of trading. As of December 11th, its closing price was HK$112, with a total market value of HK$381.5 billion, not only more than the market value of Alibaba Health Information Technology (241 HK) and Ping An Healthcare and Technology Company Limited (1833 HK), but also surpassed a third of JD.com (HK) (9618 HK)'s latest market value of about HK$1 trillion. Getting the favor of the capital markets is only the first step on the journey. After the COVID-19, will its performance continue to achieve such high growth? In addition to online pharmacy business, how could JD Health find new and sustainable business growth points so as to establish its core competitive advantages? 

JD Health (6618.HK) - Opportunities Coexist with Challenges

China

Alibaba Health Information Technology Limited is an integrated healthcare information and content service provider. The Company uses product identification, authentication, and tracking system data for its healthcare information.

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Alibaba Health Information Tec (241 HK)

JD Health IPO Trading Update: Be Ready to Buy if It Drops Post Index Inclusion

JD Health’s shares had a bold debut at the IPO and the shares are currently trading at HK$166 per share (end of today’s trading), a 135% increase...

Shifara Samsudeen, ACMA, CGMA

China Healthcare: Macro Themes

This Insight summarizes the takeaways from a recent China healthcare industry conference. There is much talk of pressures on the industry, but...

Kemp Dolliver, CFA

Industry Report - Insights on China Digital Healthcare Industry

The article analyzed China digital healthcare industry in terms of market potential, regional development, main business models(online...

Xinyao (Criss) Wang

StubWorld: JD.com In JD Health's Shadow

JD looks attractive here, down 13.5% from its recent peak. The market is assigning US$9.4bn less to the stub ops since JDH's debut, while JD has...

David Blennerhassett

JD Health (6618.HK) - Opportunities Coexist with Challenges

This article analyzed JD Health's current business model, the industry, its opportunities and challenges, the future development direction and...

Xinyao (Criss) Wang

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