HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Xunfei Healthcare Technology / Equity Capital Markets

<ul>
<li>Medical industry characteristics are the seriousness of diagnosis/treatment and the irreversibility of the process, which are the difficulties in implementing technology. The value that AI can provide is limited. </li>
<li>Xunfei’s business model is not To C, but To G (government) model. It’s not possible for SOE customers to pay high price for Xunfei’s AI model/products, leading to questionable profitability.</li>
<li>Pre-IPO valuation has reached RMB8.4 billion. Without sustainable growth and stable profitability, valuation/liquidity of Xunfei after listing wouldn’t be good. We think Xunfei’s valuation could be similar to Yidu Tech.</li>
</ul>


Medical industry characteristics are the seriousness of diagnosis/treatment and the irreversibility of the process, which are the difficulties in implementing technology. The value that AI can provide is limited. 
Xunfei’s business model is not To C, but To G (government) model. It’s not possible for SOE customers to pay high price for Xunfei’s AI model/products, leading to questionable profitability.
Pre-IPO valuation has reached RMB8.4 billion. Without sustainable growth and stable profitability, valuation/liquidity of Xunfei after listing wouldn’t be good. We think Xunfei’s valuation could be similar to Yidu Tech.


Pre-IPO Xunfei Healthcare Technology (PHIP Updates) - Profitability Are Always the Pain Points

<ul>
<li>In healthcare AI industry, the commercialization process is complex and burdened with challenges. Related products mainly plays an auxiliary role in medical scenarios, rather than a core support or rigid-demand. </li>
<li>The idea of creating corresponding solutions for C-end and B-end customers by FUNFEI is not inappropriate. However, both B-end and C-end businesses of FUNFEI have encountered varying degrees of problems.</li>
<li>We’re not optimistic about XUNFEI's profitability. The sluggish stock price performance after Airdoc’s listing indicates that the market/investors have not fully recognized healthcare AI enterprises, leading to low valuation.</li>
</ul>


In healthcare AI industry, the commercialization process is complex and burdened with challenges. Related products mainly plays an auxiliary role in medical scenarios, rather than a core support or rigid-demand. 
The idea of creating corresponding solutions for C-end and B-end customers by FUNFEI is not inappropriate. However, both B-end and C-end businesses of FUNFEI have encountered varying degrees of problems.
We’re not optimistic about XUNFEI's profitability. The sluggish stock price performance after Airdoc’s listing indicates that the market/investors have not fully recognized healthcare AI enterprises, leading to low valuation.


Pre-IPO Xunfei Healthcare Technology - Continuous Losses Will Be the Norm

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

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.

Qingdao Ainnovation Technology Group / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/qingdao-ainnovation-technology-group-co-ltd" target="_blank" data-smartkarma-citation="entities:35405:1" rel="noopener">Qingdao Ainnovation Technology Group (2121 HK)</a> was listed on 27th Jan 2022, with its one-year lockup expiring on 27th January 2023.</li>
<li>Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions.</li>
<li>Coming up for one-year lockup expiry are the pre-IPO shareholders. Bulk of them are in the money as some have invested as early as 2018.</li>
</ul>



Qingdao Ainnovation Technology Group (2121 HK) was listed on 27th Jan 2022, with its one-year lockup expiring on 27th January 2023.
Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions.
Coming up for one-year lockup expiry are the pre-IPO shareholders. Bulk of them are in the money as some have invested as early as 2018.


AInnovation Technology Lock-Up - US$670m Worth of Pre-IPO Investment Is Still Well in the Money

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Beijing Airdoc Technology / Equity Bottom-Up

<div><div><div><div><ul><li>Airdoc’s 1H22 revenue declined 24.4% YoY to RMB37.4mn primarily due to decreasing number of users of the SaMDs and high risk assessment solutions amid COVID lockdowns which has led to the shrinking revenue of AI-based software solutions (-26.0% YoY).</li><li>Given the declined revenue size, gross profit was down 30.4% YoY to RMB22.1mn and gross profit margin decreased from 64.1% in 1H21 to 59.0% in 1H22.</li><li>Number of detection cases was negatively impacted by COVID restrictions but has rebounded since June.</li></ul></div></div></div></div><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Airdoc’s 1H22 revenue declined 24.4% YoY to RMB37.4mn primarily due to decreasing number of users of the SaMDs and high risk assessment solutions amid COVID lockdowns which has led to the shrinking revenue of AI-based software solutions (-26.0% YoY).Given the declined revenue size, gross profit was down 30.4% YoY to RMB22.1mn and gross profit margin decreased from 64.1% in 1H21 to 59.0% in 1H22.Number of detection cases was negatively impacted by COVID restrictions but has rebounded since June.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Airdoc Technology (2251 HK) – Expect Recovery from 2H22

<ul>
<li>Without entering NRDL and public hospital markets, Airdoc’s core product Airdoc-AIFUNDUS would be hard to generate solid performance due to its high pricing but limited value to patients and doctors.</li>
<li>Due to lockdown/pandemic, we lowered our forecast on revenue growth/gross margin in 2022. As competition intensified, Airdoc's revenue growth and margin could be significantly reduced in the coming years. </li>
<li>The biggest concern for Airdoc is the commercialization prospects. The real turning point for AI medical imaging has not arrived. We are not optimistic that Airdoc will end up profitable. </li>
</ul>


Without entering NRDL and public hospital markets, Airdoc’s core product Airdoc-AIFUNDUS would be hard to generate solid performance due to its high pricing but limited value to patients and doctors.
Due to lockdown/pandemic, we lowered our forecast on revenue growth/gross margin in 2022. As competition intensified, Airdoc's revenue growth and margin could be significantly reduced in the coming years. 
The biggest concern for Airdoc is the commercialization prospects. The real turning point for AI medical imaging has not arrived. We are not optimistic that Airdoc will end up profitable. 


Beijing Airdoc Technology (2251.HK) - Not Optimistic About Turning Loss into Profit

China

Beijing Airdoc Technology Co. Ltd. is a company headquartered in Beijing, China, that operates as an artificial intelligence start up company that serves medical industry.

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Beijing Airdoc Technology (2251 HK)

Pre-IPO Xunfei Healthcare Technology (PHIP Updates) - Profitability Are Always the Pain Points

Challenges in implementing AI technology in medical industry will lead to low value. Xunfei's To G model faces profitability issues. High...

Xinyao (Criss) Wang

Pre-IPO Xunfei Healthcare Technology - Continuous Losses Will Be the Norm

The willingness to purchase healthcare AI products/services is not strong enough. The real turning point for commercialization of healthcare AI...

Xinyao (Criss) Wang

AInnovation Technology Lock-Up - US$670m Worth of Pre-IPO Investment Is Still Well in the Money

Qingdao Ainnovation Technology Group (2121 HK) was listed on 27th Jan 2023, with its one-year lockup expiring on 27th January 2023. Coming up for...

Clarence Chu

Airdoc Technology (2251 HK) – Expect Recovery from 2H22

Given the declined revenue size, gross profit was down 30.4% YoY to RMB22.1mn and gross profit margin decreased from 64.1% in 1H21 to 59.0% in 1H22.

CMB International