Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Equity Capital Markets

Hangzhou Tigermed Consulting C / Equity Capital Markets

<p>Tigermed, the largest China-based clinical CRO company, launched book building today to raise up to USD 1.4 bn to list in Hong Kong. </p>
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<p>In our previous note, we discussed that the company was listed on the A-share market in 2012. Once listed in Hong Kong, it will be the best CRO company offering exposure to the clinical CRO business in China and therefore will likely receive strong interest from international investors (particularly those who can't invest in the A-share market). The company's A-share already has investments by quality investors, and was widely held by offshore investors via the northbound stock connect. Despite the impact of COVID-19 situation, Tigermed still registered high single-digit revenue growth in 1Q2020.  However, the company also guided that profit in 2020E could be lower than what they have achieved in 2019. Besides the negative impact of COVID-19, the low expectation is also due to the high base of financial gains from financial assets in 2019. </p>
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<p>In this note, we will provide our thoughts on the price range.  We are of the view that the deal offers limited upside for investors though there is hardly any issue for the book to be covered despite no cornerstone investors as the company is well known to the investment community. </p>
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<h2>Our previous coverage on Tigermed A+H:</h2>
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<ul>
<li><a href="https://www.smartkarma.com/insights/tigermed-a-h-listing-hot-deal-of-the-best-china-clinical-cro-play" target="_blank" rel="noopener">Tigermed (泰格医疗) A+H Listing: Hot Deal of the Best China Clinical-CRO Play</a></li>
<li><a href="https://www.smartkarma.com/insights/tigermed-a-h-phip-updates-and-thoughts-on-valuation" target="_blank" rel="noopener">Tigermed (泰格医疗) A+H: PHIP Updates and Thoughts on Valuation</a></li>
</ul>
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Tigermed, the largest China-based clinical CRO company, launched book building today to raise up to USD 1.4 bn to list in Hong Kong. 

In our previous note, we discussed that the company was listed on the A-share market in 2012. Once listed in Hong Kong, it will be the best CRO company offering exposure to the clinical CRO business in China and therefore will likely receive strong interest from international investors (particularly those who can't invest in the A-share market). The company's A-share already has investments by quality investors, and was widely held by offshore investors via the northbound stock connect. Despite the impact of COVID-19 situation, Tigermed still registered high single-digit revenue growth in 1Q2020.  However, the company also guided that profit in 2020E could be lower than what they have achieved in 2019. Besides the negative impact of COVID-19, the low expectation is also due to the high base of financial gains from financial assets in 2019. 


In this note, we will provide our thoughts on the price range.  We are of the view that the deal offers limited upside for investors though there is hardly any issue for the book to be covered despite no cornerstone investors as the company is well known to the investment community. 

Our previous coverage on Tigermed A+H:



Tigermed (泰格医疗) A+H Listing: Hot Deal of the Best China Clinical-CRO Play
Tigermed (泰格医疗) A+H: PHIP Updates and Thoughts on Valuation




Tigermed (泰格医疗) A+H: Past A+H Listings Suggest Upside Might Be Limited

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.

<div><p><a href="https://www.smartkarma.com/entities/hangzhou-tigermed-consulting-h" target="_blank" data-smartkarma-citation="entities:29212:1" rel="noopener">Hangzhou Tigermed Consulting (H) (3347 HK)</a> is a global contract research organisation (CRO). Tigermed is the largest clinical CRO in China with a market share of 8.4% as measured by revenue in China’s clinical CRO market in 2019, according to Frost &amp; Sullivan. Tigermed has launched its Hong Kong IPO at an indicative price range of HK$88-100 per share to raise gross proceeds of $1.2-1.4 billion.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/tigermed-ipo-initiation-trade-offs" target="_blank" rel="noopener">our initiation note</a>, we stated that Tigermed’s financial performance is creditable on a standalone basis and in comparison, to peers. However, our enthusiasm was tempered by a seemingly aggressive revenue recognition policy. Our <a href="https://www.smartkarma.com/insights/tigermed-ipo-phip-highlights-the-trade-offs" target="_blank" rel="noopener">follow-on note</a> which examined the PHIP suggested that the positives outweigh the negatives. Our valuation analysis suggests that the IPO valuation is attractive at the low-end of the proposed IPO price range. </p></div></div></div>

Hangzhou Tigermed Consulting (H) (3347 HK) is a global contract research organisation (CRO). Tigermed is the largest clinical CRO in China with a market share of 8.4% as measured by revenue in China’s clinical CRO market in 2019, according to Frost &amp; Sullivan. Tigermed has launched its Hong Kong IPO at an indicative price range of HK$88-100 per share to raise gross proceeds of $1.2-1.4 billion.In our initiation note, we stated that Tigermed’s financial performance is creditable on a standalone basis and in comparison, to peers. However, our enthusiasm was tempered by a seemingly aggressive revenue recognition policy. Our follow-on note which examined the PHIP suggested that the positives outweigh the negatives. Our valuation analysis suggests that the IPO valuation is attractive at the low-end of the proposed IPO price range. 

China

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.

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)

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.

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.

Viva Biotech Holdings operates as a drug discovery platform. The Company provides target protein expression, structure researching, hit screening, drug candidate determination, and other services. Viva Biotech Holdings serves customers worldwide.

Walvax Biotechnology Company Limited develops, manufactures and sells bio-pharmaceutical vaccination products.  The Company's products include haemophilus influenzae type b conjugate vaccine and meningococcal group A,C bivalent polysaccharide conjugate vaccine.

Jiangsu Nhwa Pharmaceutical Co Ltd integrates science, industry and trade into one Group.  The Group engages in producing medications for central nervous system and preparation of raw materials.

Jiangsu Nhwa Pharmaceutical Co., (002262 CH)

Azenta, Inc. provides life sciences solutions. The Company offers cold-chain sample management solutions and genomic services across areas such as drug development, clinical research, and advanced cell therapies. Azenta serves pharmaceutical, biotech, academic, and healthcare institutions worldwide.

Genscript Biotech Corp is biotech service company. The Company provides life science services and products and pre-clinical drug development services.

Gerresheimer AG develops and produces specialty products made of glass and plastic.  The Company produces containers for a variety of substances and medicines.

MorphoSys AG operates as a biopharmaceutical company. The Company discovers and develops differentiated therapies and medicines for the patients suffering from cancer, inflammations, and autoimmune diseases. MorphoSys serves customers in Germany.

Syngene International Limited provides contract research and manufacturing services to the pharmaceutical industry. The Company offers chemical and formulation development, polymer research, large molecule and clinical development, and stability services. Syngene International serves customers worldwide.

Syneos Health, Inc. operates as a biopharmaceutical solutions organization. The Company offers therapeutic expertise, bioanalytics solutions, clinical development services, medical devices, diagnostics, and commercialization. Syneos Health serves patients worldwide.

LegoChem Biosciences, Inc. (LCB) is a researched-based biotechnology company that discovers, develops, and commercializs of medicines.  The Company utilizes chemistry to make biologics more targeted and potent for patients with diseases of highly unmet medical needs.  The Company focuses on therapy within antibiotics, anti-coagulants, oncology, antibody and protein-drug conjugate.

Tecan Group AG develops, manufactures and distributes laboratory automation components and systems. The Company produces robotic sample processors, stand-alone separation and detection devices, laser scanners, integrated systems, and pumps and valves for high precision liquid handling. The products are mainly used by research and diagnostic laboratories.

NeoGenomics, Inc. operates a network of clinical laboratories that specializes in cancer genetics diagnostic testing services. The Company's services include cytogenetics, fluorescence in-situhybridization (FISH), flow cytometry, morphology, anatomic pathology, and molecular genetic testing. NeoGenomics serves pathologists, oncologists, urologists, and hospitals.

Evotec AG offers drug research, development, and manufacturing services.  The Company offers assay development and screening and compound optimization services to pharmaceutical companies.  Evotec also develops drugs on its own for out-licensing.

Hangzhou Tigermed Consulting Co.,Ltd. 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 offers services worldwide.

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Hangzhou Tigermed Consulting C (3347 HK)

Tigermed (泰格医疗) A+H: Past A+H Listings Suggest Upside Might Be Limited

Tigermed, the largest China-based clinical CRO company, launched book building today to raise up to USD 1.4 bn to list in Hong Kong. In our...

Ke Yan, CFA, FRM

Tigermed IPO: Valuation Insights

Hangzhou Tigermed Consulting (H) (3347 HK) is a global contract research organisation (CRO). Tigermed is the largest clinical CRO in China with a...

Arun George

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