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.

Equity Capital Markets

JD Health International  / Equity Capital Markets

<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 has filed for an IPO to list its shares on the Hong Kong Stock Exchange. Reuters reported today that according to a term sheet obtained by them, JD Health is seeking to raise up to US$3.5bn by selling 381.9m shares at an indicative price range of HK$62.8-70.58 per share.The greenshoe option includes the sale of further 15% of the company’s shares which would raise the total IPO proceeds to about US$4bn. The initial size of the deal represents 12.2% of JD Health’s enlarged share capital and at the midpoint of the IPO price of HK$66.69 per share, the company will have a valuation of US$25.6bn.<table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 240.0pt;">JD Health International IPO Details</td></tr>
<tr>
<td style="width: 180.0pt;">No. of Shares Issued (m)</td>
<td style="width: 60.0pt;">381.9</td>
</tr>
<tr>
<td style="width: 180.0pt;">IPO Price (HK$)</td>
<td style="width: 60.0pt;">62.8-70.58</td>
</tr>
<tr>
<td style="width: 180.0pt;">Offer as a % Total Outstanding Shares</td>
<td style="width: 60.0pt;">12.20%</td>
</tr>
<tr>
<td style="width: 180.0pt;">Total Shares Outstanding (m)</td>
<td style="text-align: right; width: 60pt;">         3,130.3</td>
</tr>
<tr>
<td style="width: 180.0pt;">Gross Proceeds (HK$m)</td>
<td style="text-align: right; width: 60pt;">      25,468.9</td>
</tr>
<tr>
<td style="width: 180.0pt;">Gross Proceeds (US$m)</td>
<td style="text-align: right; width: 60pt;">         3,280.8</td>
</tr>
<tr>
<td style="width: 180.0pt;">Market Capitalisation (HK$m)</td>
<td style="text-align: right; width: 60pt;">    208,761.6</td>
</tr>
<tr>
<td style="width: 180.0pt;">Market Capitalisation (US$m)</td>
<td style="text-align: right; width: 60pt;">      26,891.6</td>
</tr>
<tr>
<td style="width: 180.0pt;">Enterprise Value (HK$m)</td>
<td style="text-align: right; width: 60pt;">    199,039.3</td>
</tr>
<tr>
<td style="width: 180.0pt;">Enterprise Value (US$m)</td>
<td style="text-align: right; width: 60pt;">      25,639.2</td>
</tr>
</tbody></table><div class="content-caption">Source: Company Disclosures, Reuters, LSR (gross proceeds, market cap and EV are based on the midpoint of the IPO price of HK$66.69 per share, EV is after adjusting for net cash as of Sep 2020)</div>Read our previous insights on the company's IPO:<a href="https://www.smartkarma.com/insights/jd-health-pre-ipo-poised-to-benefit-from-structural-changes-in-healthcare-in-china-and-the-pandemic" target="_blank" data-smartkarma-citation="insights:44220" rel="noopener">JD Health Pre-IPO: Poised to Benefit from Structural Changes in Healthcare in China and the Pandemic</a> <a href="https://www.smartkarma.com/insights/jd-health-pre-ipo-peer-comparison-reveals-jd-health-s-financials-are-stronger-than-competition" target="_blank" data-smartkarma-citation="insights:44876" rel="noopener">JD Health Pre-IPO: Peer Comparison Reveals JD Health’s Financials Are Stronger than Competition</a> <a href="https://www.smartkarma.com/insights/jd-health-ipo-phip-data-re-affirms-our-positive-view-on-the-company" target="_blank" data-smartkarma-citation="insights:45425" rel="noopener">JD Health IPO: PHIP Data Re-Affirms Our Positive View on the Company</a>

JD Health (6618 HK) , the largest online healthcare platform and retail pharmacy in China has filed for an IPO to list its shares on the Hong Kong Stock Exchange. Reuters reported today that according to a term sheet obtained by them, JD Health is seeking to raise up to US$3.5bn by selling 381.9m shares at an indicative price range of HK$62.8-70.58 per share.The greenshoe option includes the sale of further 15% of the company’s shares which would raise the total IPO proceeds to about US$4bn. The initial size of the deal represents 12.2% of JD Health’s enlarged share capital and at the midpoint of the IPO price of HK$66.69 per share, the company will have a valuation of US$25.6bn.
JD Health International IPO Details

No. of Shares Issued (m)
381.9


IPO Price (HK$)
62.8-70.58


Offer as a % Total Outstanding Shares
12.20%


Total Shares Outstanding (m)
         3,130.3


Gross Proceeds (HK$m)
      25,468.9


Gross Proceeds (US$m)
         3,280.8


Market Capitalisation (HK$m)
    208,761.6


Market Capitalisation (US$m)
      26,891.6


Enterprise Value (HK$m)
    199,039.3


Enterprise Value (US$m)
      25,639.2

Source: Company Disclosures, Reuters, LSR (gross proceeds, market cap and EV are based on the midpoint of the IPO price of HK$66.69 per share, EV is after adjusting for net cash as of Sep 2020)Read our previous insights on the company's IPO:JD Health Pre-IPO: Poised to Benefit from Structural Changes in Healthcare in China and the Pandemic JD Health Pre-IPO: Peer Comparison Reveals JD Health’s Financials Are Stronger than Competition JD Health IPO: PHIP Data Re-Affirms Our Positive View on the Company 

JD Health IPO: Attractive Even at High End on Cheapness and Gearing to Healthcare Transformation

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<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> (JDH) is looking to raise about US$3.47bn in its upcoming Hong Kong IPO JDH’s retail pharmacy and online healthcare services form a strong, closed loop, end-to-end healthcare ecosystem that is well-positioned to benefit from the digitalization of China’s healthcare system. It has an extensive network of online and offline pharmacies which is expanding into offering more online healthcare services. Revenue has been strong in the past three years and it has accelerated further due to COVID-19. We will share our final thoughts on valuation and deal dynamics.Our previous coverage of the IPO:<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/jd-health-pre-ipo-well-positioned-to-ride-china-s-healthcare-digitalization" target="_blank" data-smartkarma-citation="insights:43711" rel="noopener">JD Health (京东健康) Pre-IPO - Well-Positioned to Ride China’s Healthcare Digitalization</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-health-pre-ipo-peer-comparison-it-s-a-close-fight-and-competition-is-intensifying" target="_blank" data-smartkarma-citation="insights:45062" rel="noopener">JD Health (京东健康) Pre-IPO - Peer Comparison - It's a Close Fight and Competition Is Intensifying</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-health-pre-ipo-assumptions-and-valuations" target="_blank" data-smartkarma-citation="insights:45266" rel="noopener">JD Health (京东健康) Pre-IPO - Assumptions and Valuations</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/jd-health-pre-ipo-updates-from-phip-fine-tuning-forecasts" target="_blank" data-smartkarma-citation="insights:45368" rel="noopener">JD Health (京东健康) Pre-IPO - Updates from PHIP - Fine-Tuning Forecasts</a> </li>
</ul>

JD Health (6618 HK) (JDH) is looking to raise about US$3.47bn in its upcoming Hong Kong IPO JDH’s retail pharmacy and online healthcare services form a strong, closed loop, end-to-end healthcare ecosystem that is well-positioned to benefit from the digitalization of China’s healthcare system. It has an extensive network of online and offline pharmacies which is expanding into offering more online healthcare services. Revenue has been strong in the past three years and it has accelerated further due to COVID-19. We will share our final thoughts on valuation and deal dynamics.Our previous coverage of the IPO:

JD Health (京东健康) Pre-IPO - Well-Positioned to Ride China’s Healthcare Digitalization 

JD Health (京东健康) Pre-IPO - Peer Comparison - It's a Close Fight and Competition Is Intensifying 

JD Health (京东健康) Pre-IPO - Assumptions and Valuations 

JD Health (京东健康) Pre-IPO - Updates from PHIP - Fine-Tuning Forecasts 


JD Health (京东健康) IPO - Paying to Ride the Early Innings of Healthcare Transformation

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

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.

<a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (JDH HK)</a> is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. The rumoured valuation is a significant increase to the August 2020 Series B round - a raise of $914 million at a $19.2 billion valuation. <div class="content-highlight">In <a href="https://www.smartkarma.com/insights/jd-health-ipo-initiation-e-ppointments" target="_blank" data-smartkarma-citation="insights:45106" rel="noopener">JD Health IPO Initiation: E-Ppointments</a>, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In <a href="https://www.smartkarma.com/insights/jd-health-ipo-phip-new-data-points-and-peer-comparison" target="_blank" data-smartkarma-citation="insights:45377" rel="noopener">JD Health IPO: PHIP New Data Points and Peer Comparison</a>, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In this note, we take a first look at JD Health's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.</div>

JD Health (JDH HK) is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. The rumoured valuation is a significant increase to the August 2020 Series B round - a raise of $914 million at a $19.2 billion valuation. In JD Health IPO Initiation: E-Ppointments, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In JD Health IPO: PHIP New Data Points and Peer Comparison, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In this note, we take a first look at JD Health's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

1.Industry viewpoints:<ul>
<li>Recently, the National Medical Products Administration has released a new policy (draft version) about the online drug sales.</li>
<li>Vaccine is a hot topic in 2020, so let’s talk about vaccine.</li>
<li>The upsurge in the application of AI in medical imaging in China provides a new direction for the development, which may be the most promising field for China to surpass foreign countries.</li>
</ul>2. Company news:News about the updated progress of new drugs and the marketing approval of new products from <a href="https://www.smartkarma.com/entities/betta-pharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:25883:1" rel="noopener">Betta Pharmaceuticals (300558 CH)</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a> , Kangpu Biopharmaceuticals, and <a href="https://www.smartkarma.com/entities/venus-medtech-hangzhou-inc" target="_blank" data-smartkarma-citation="entities:28257:1" rel="noopener">Venus MedTech (2500 HK).</a>3. Market review:Last week, stock price for healthcare sector in A share decreased 1.43%, while CSI 300 increased 1.78% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1.Industry viewpoints:
Recently, the National Medical Products Administration has released a new policy (draft version) about the online drug sales.
Vaccine is a hot topic in 2020, so let’s talk about vaccine.
The upsurge in the application of AI in medical imaging in China provides a new direction for the development, which may be the most promising field for China to surpass foreign countries.
2. Company news:News about the updated progress of new drugs and the marketing approval of new products from Betta Pharmaceuticals (300558 CH), BeiGene Ltd (6160 HK) , Kangpu Biopharmaceuticals, and Venus MedTech (2500 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 1.43%, while CSI 300 increased 1.78% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion. Our analysis indicates that the online pharmacy business could be worth US$10 billion assuming some degree of margin improvement. Further, the online healthcare services business will have to penetrate roughly 2% of healthcare services spending to justify the balance (US$10 billion) valuation, which we think is achievable.

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion. Our analysis indicates that the online pharmacy business could be worth US$10 billion assuming some degree of margin improvement. Further, the online healthcare services business will have to penetrate roughly 2% of healthcare services spending to justify the balance (US$10 billion) valuation, which we think is achievable.  

JD Health: Framing the Valuation Discussion

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: Attractive Even at High End on Cheapness and Gearing to Healthcare Transformation

Reuters reported today that according to a term sheet obtained by them, JD Health is seeking to raise up to US$3.5bn by selling 381.9m shares at an...

Shifara Samsudeen, ACMA, CGMA

JD Health (京东健康) IPO - Paying to Ride the Early Innings of Healthcare Transformation

JD Health launched its Hong Kong IPO to raise up to US$3.47bn. Valuation is reasonable relative to peers and we think that there's decent upside...

Zhen Zhou, Toh

JD Health IPO: Valuation First Look

JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. Overall, based on valuation analysis, we think that the...

Arun George

China Healthcare Weekly (Nov. 20)

The article summarized the new healthcare policy released, major industry viewpoints, company news and capital market review in China healthcare...

Xinyao (Criss) Wang

JD Health: Framing the Valuation Discussion

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion with a buildup by each business...

Kemp Dolliver, CFA

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