European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The 1,350p offer for <a href="https://www.smartkarma.com/entities/ergomed-plc" target="_blank" data-smartkarma-citation="entities:23411:1" rel="noopener">Ergomed Plc (ERGO LN)</a> (28% premium, 18.9x EV/Fwd NTM EBITDA using IBES estimated) seems optically attractive considering share underperformance, and in line with closest peer Medpace at 19.06x.</li>
<li>Nevertheless there'd be synergies available to a trade buyer and other than 18% from the Founder, there aren't any other irrevocables, which indicates the offer price is far from knock-out.</li>
<li>I set my TP at 1,350p. Spread turned negative last week, now 0.59%/1.71% (gross/annualised, assuming settlement by mid-February). I would be long considering there's still time for a competing offer.</li>
</ul>


The 1,350p offer for Ergomed Plc (ERGO LN) (28% premium, 18.9x EV/Fwd NTM EBITDA using IBES estimated) seems optically attractive considering share underperformance, and in line with closest peer Medpace at 19.06x.
Nevertheless there'd be synergies available to a trade buyer and other than 18% from the Founder, there aren't any other irrevocables, which indicates the offer price is far from knock-out.
I set my TP at 1,350p. Spread turned negative last week, now 0.59%/1.71% (gross/annualised, assuming settlement by mid-February). I would be long considering there's still time for a competing offer.


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

Novotech Holdings / Equity Capital Markets

<p><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 an Asia-Pacific biotech-focused CRO that provides clinical research services for customers from Phase I to Phase IV trials across multiple countries in the Asia-Pacific region including Greater China, South Korea and Australia/New Zealand. In our previous insight on Novotech Health’s IPO, we examined the company’s business model, revenue, margins and the outlook for the company.</p><p>In this insight, we provide our forecasts for the company’s financials and what could be a potential valuation for Novotech.</p>

Novotech Holdings (NVT HK) is an Asia-Pacific biotech-focused CRO that provides clinical research services for customers from Phase I to Phase IV trials across multiple countries in the Asia-Pacific region including Greater China, South Korea and Australia/New Zealand. In our previous insight on Novotech Health’s IPO, we examined the company’s business model, revenue, margins and the outlook for the company.In this insight, we provide our forecasts for the company’s financials and what could be a potential valuation for Novotech.

Novotech Health IPO: Forecasts, Peer Comparison and Thoughts on Valuation

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/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 $0.5-1.0 billion, according to press reports.</p></div><div>
<div><p>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. </p></div>
<div><div><p>In <a href="https://www.smartkarma.com/insights/novotech-health-ipo-a-solid-start-to-2021" target="_blank" data-smartkarma-citation="insights:57255" rel="noopener">Novotech Health IPO: A Solid Start to 2021</a>, we examined the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we maintained our view that the fundamentals look attractive. </p></div></div>
</div><div><div><div class="content-highlight"><p>In this note, we present our forecasts and take the first look at Novotech's potential valuation range. </p></div></div></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 $0.5-1.0 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 Novotech Health IPO: A Solid Start to 2021, we examined the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we maintained our view that the fundamentals look attractive. 
In this note, we present our forecasts and take the first look at Novotech's potential valuation range. 

Novotech Health IPO: Valuation First-Look

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>We remain concerned about the prospect for additional weakness for the broad market due to deterioration in several metrics that we often turn to to get a pulse on the market. At the same time, several cyclical areas of the market have bounced off of logical support while RS has been unable to break out to new highs for defensive Sectors. Absent bearish price inflections in the cyclicals and new RS highs for defensive areas of the market, equities are likely to remain in a state of purgatory.  In today’s report we highlight attractive Groups and stocks within Consumer Staples, Health Care, and Utilities.</p>

We remain concerned about the prospect for additional weakness for the broad market due to deterioration in several metrics that we often turn to to get a pulse on the market. At the same time, several cyclical areas of the market have bounced off of logical support while RS has been unable to break out to new highs for defensive Sectors. Absent bearish price inflections in the cyclicals and new RS highs for defensive areas of the market, equities are likely to remain in a state of purgatory.  In today’s report we highlight attractive Groups and stocks within Consumer Staples, Health Care, and Utilities.

U.S. Equity Strategy: Market Still Susceptible

Frontage Holdings / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/27754" target="_blank" data-smartkarma-citation="entities:27754:1">Frontage Holdings (1521 HK)</a> has launched its Hong Kong IPO at a price range of HK$2.55-3.20 per share to raise HK$1.27-1.60 billion ($160-200 million). Three cornerstone investors, Hillhouse Capital, Greenwoods Asset Management and OrbiMed Advisors, intend to purchase $90 million of the offering.</p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/frontage-holdings-ipo-preview-an-uncertain-transition" target="_blank">our IPO initiation note</a>, we cautioned that while the market backdrop is favourable, Frontage is a business in the middle of an uncertain transition. Overall, with the caveat that Frontage has yet to prove that it can reaccelerate organic revenue growth, we believe that the risk-reward profile is favourable at the low-end of IPO price range. </p></div>

Frontage Holdings (1521 HK) has launched its Hong Kong IPO at a price range of HK$2.55-3.20 per share to raise HK$1.27-1.60 billion ($160-200 million). Three cornerstone investors, Hillhouse Capital, Greenwoods Asset Management and OrbiMed Advisors, intend to purchase $90 million of the offering.In our IPO initiation note, we cautioned that while the market backdrop is favourable, Frontage is a business in the middle of an uncertain transition. Overall, with the caveat that Frontage has yet to prove that it can reaccelerate organic revenue growth, we believe that the risk-reward profile is favourable at the low-end of IPO price range. 

Frontage Holdings IPO: Risk-Reward Is Favourable at the Low-End of Price Range

United States

ICON PLC provides contract clinical research services to the global pharmaceutical industry.  The Company manages clinical studies in addition to providing data management, regulatory, and central laboratory services.  ICON currently operates offices in multiple countries.

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ICON PLC (ICLR US)

No Danger in Being Long

Spread turned negative and widened in the last week. I believe the risk/reward of adding at or below 1,340p is more favourable considering that...

Jesus Rodriguez Aguilar

Novotech Health IPO: Forecasts, Peer Comparison and Thoughts on Valuation

Novotech Health is an Asia-Pacific biotech-focused CRO and in this insight, we provide our forecasts for the company’s financials and what could be...

Shifara Samsudeen, ACMA, CGMA

Novotech Health IPO: Valuation First-Look

Novotech is pre-marketing an HKEx IPO to raise $0.5-1.0 billion. In this note, we present our forecasts and take the first look at Novotech's...

Arun George

U.S. Equity Strategy: Market Still Susceptible

We remain concerned about the prospect for additional weakness for the broad market due to deterioration in several metrics that we often turn to...

Vermilion Research

Frontage Holdings IPO: Risk-Reward Is Favourable at the Low-End of Price Range

Frontage Holdings (1521 HK) has launched its Hong Kong IPO at a price range of HK$2.55-3.20 per share to raise HK$1.27-1.60 billion ($160-200...

Arun George

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