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.

Equity Capital Markets

Shanghai MicroPort MedBot Group / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/shanghai-microport-medbot-group-co-ltd" target="_blank" data-smartkarma-citation="entities:33485:1" rel="noopener">Shanghai MicroPort MedBot Group (MMG HK)</a> is a global surgical robot company and a subsidiary of <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>, a 54.61% shareholder. MicroPort MedBot has developed a portfolio with one approved product (DFVision) and eight product candidates at various stages of development, including two candidates (Toumai and Honghu) in the NMPA registration application stage. The core product is the Toumai laparoscopic surgical robot. </p></div><div><p>MicroPort MedBot has launched an HKEx IPO to raise net proceeds of HK$1,332.3 ($171 million) at the mid-point of the IPO price range of HK$36.00-43.20 per share. The IPO raise is materially below the rumoured target of up to $1 billion. </p></div><div><p>Seven cornerstone investors have agreed to invest about $95 million in the IPO (51.6% of the offer shares at the mid-point of the IPO price range). The cornerstones are Aspex Management, Hillhouse, LAV, Snow Lake Capital, Yorkool, CloudAlpha Capital and Artisan Partners.</p></div><div><div>
<p>In <a href="https://www.smartkarma.com/insights/microport-medbot-ipo-initiation-helping-mechanical-hands" target="_blank" data-smartkarma-citation="insights:58411" rel="noopener">MicroPort MedBot IPO Initiation: Helping Mechanical Hands</a>, we stated that MicroPort MedBot’s three flagship products (Toumai, Honghui and DFVision) have been admitted to the Green Path, an elite program under which the NMPA grants priority review and accelerated approval. Crucially, the three flagship products are either approved (DFVision commercial launch in 4Q21) or at the registration approval stage, which provides near-term market visibility. We concluded that MicroPort MedBot is worth a closer look.</p>
<div class="content-highlight"><p>However, our valuation analysis suggests that the IPO price range is full and we would remain on the sidelines awaiting a better entry opportunity. </p></div>
</div></div>

Shanghai MicroPort MedBot Group (MMG HK) is a global surgical robot company and a subsidiary of Microport Scientific (853 HK), a 54.61% shareholder. MicroPort MedBot has developed a portfolio with one approved product (DFVision) and eight product candidates at various stages of development, including two candidates (Toumai and Honghu) in the NMPA registration application stage. The core product is the Toumai laparoscopic surgical robot. MicroPort MedBot has launched an HKEx IPO to raise net proceeds of HK$1,332.3 ($171 million) at the mid-point of the IPO price range of HK$36.00-43.20 per share. The IPO raise is materially below the rumoured target of up to $1 billion. Seven cornerstone investors have agreed to invest about $95 million in the IPO (51.6% of the offer shares at the mid-point of the IPO price range). The cornerstones are Aspex Management, Hillhouse, LAV, Snow Lake Capital, Yorkool, CloudAlpha Capital and Artisan Partners.
In MicroPort MedBot IPO Initiation: Helping Mechanical Hands, we stated that MicroPort MedBot’s three flagship products (Toumai, Honghui and DFVision) have been admitted to the Green Path, an elite program under which the NMPA grants priority review and accelerated approval. Crucially, the three flagship products are either approved (DFVision commercial launch in 4Q21) or at the registration approval stage, which provides near-term market visibility. We concluded that MicroPort MedBot is worth a closer look.
However, our valuation analysis suggests that the IPO price range is full and we would remain on the sidelines awaiting a better entry opportunity. 


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

<p>Shanghai MicroPort MedBot Group (MM), a surgical robot company, aims to raise up to US$200m in its Hong Kong IPO.</p><p>MicroPort MedBot (MM) is a surgical robot company which designs, develops and commercializes surgical robots to assist surgeons in performing complex surgical procedures. It is the only company with a product portfolio covering the five major and fast-growing surgical specialties of laparoscopic, orthopedic, panvascular, natural orifice and percutaneous surgical procedures, as per Frost &amp; Sullivan (F&amp;S).</p><p>We have looked at the company’s background and products in our earlier notes:</p><ul>
<li><a href="https://www.smartkarma.com/insights/microport-medbot-pre-ipo-robodoc-pre-revenue-has-a-large-competitor-but-a-large-market-as-well" target="_blank" rel="noopener">MicroPort MedBot Pre-IPO - RoboDoc - pre-revenue, has a large competitor but a large market as well</a></li>
<li><a href="https://www.smartkarma.com/insights/microport-medbot-pre-ipo-robodoc-phip-updates-and-a-look-at-its-largest-competitor" target="_blank" rel="noopener">MicroPort MedBot Pre-IPO - RoboDoc - PHIP Updates and a Look at Its Largest Competitor, and</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/microport-medbot-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">MicroPort MedBot Pre-IPO - Thoughts on valuation</a></li>
</ul><p>In this note, we will run the deal through our ECM framework and comment on valuations.</p>

Shanghai MicroPort MedBot Group (MM), a surgical robot company, aims to raise up to US$200m in its Hong Kong IPO.MicroPort MedBot (MM) is a surgical robot company which designs, develops and commercializes surgical robots to assist surgeons in performing complex surgical procedures. It is the only company with a product portfolio covering the five major and fast-growing surgical specialties of laparoscopic, orthopedic, panvascular, natural orifice and percutaneous surgical procedures, as per Frost &amp; Sullivan (F&amp;S).We have looked at the company’s background and products in our earlier notes:
MicroPort MedBot Pre-IPO - RoboDoc - pre-revenue, has a large competitor but a large market as well
MicroPort MedBot Pre-IPO - RoboDoc - PHIP Updates and a Look at Its Largest Competitor, and
MicroPort MedBot Pre-IPO - Thoughts on valuation
In this note, we will run the deal through our ECM framework and comment on valuations.

MicroPort MedBot Pre-IPO - Valuation Appears Reasonable but Sentiment Will Weigh

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<p>Intuitive Surgical announced better-than-expected Q3 results, with revenue and EPS modestly beating consensus. Worldwide de Vinci procedures grew 20% y/y, despite negative impact from the resurgence of the COVID-19 in the U.S. The company reduced higher end of its 2021 procedure growth guidance by 100 basis points to 27–29% from 27–30% earlier. da Vinci system placement grew 72% y/y to 336, which should further augment procedure growth. Further delay in surgical robot launch by Johnson &amp; Johnson enhances our conviction on continuation of Intuitive's leadership positioning. </p>

Intuitive Surgical announced better-than-expected Q3 results, with revenue and EPS modestly beating consensus. Worldwide de Vinci procedures grew 20% y/y, despite negative impact from the resurgence of the COVID-19 in the U.S. The company reduced higher end of its 2021 procedure growth guidance by 100 basis points to 27–29% from 27–30% earlier. da Vinci system placement grew 72% y/y to 336, which should further augment procedure growth. Further delay in surgical robot launch by Johnson &amp; Johnson enhances our conviction on continuation of Intuitive's leadership positioning. 

Intuitive Surgical (ISRG US): Q3 Results Beat Consensus, Procedure Growth at Pre-Pandemic Level

<p>Shares of <a href="https://www.smartkarma.com/entities/intuitive-surgical-inc" target="_blank" data-smartkarma-citation="entities:15853:1" rel="noopener">Intuitive Surgical (ISRG US)</a> corrected ~10% from its 52-week high price of $362 achieved in early September. We believe the correction reflects investors’ fear on the pace of recovery of the elective surgeries globally, especially in the U.S. Amidst this backdrop, the company’s Q3 results announcement on October 19 will be a closely watched event. During their Q2 results announcement, management raised 2021 procedure growth (a key performance parameter) guidance to 27–30% y/y from 22–26% y/y announced during Q1 results announcement. So, outlook on procedure growth guidance for the remainder of the year and early trend into Q4 will the major catalysts for the shares.  Shares of Intuitive Surgical have historically been trading at a high multiple, at par with other high growth ideas such as <a href="https://www.smartkarma.com/entities/abiomed-inc" target="_blank" data-smartkarma-citation="entities:7767:1" rel="noopener">Abiomed Inc (ABMD US)</a>, <a href="https://www.smartkarma.com/entities/align-technology-inc" target="_blank" data-smartkarma-citation="entities:2817:1" rel="noopener">Align Technology (ALGN US)</a>, <a href="https://www.smartkarma.com/entities/idexx-laboratories-inc" target="_blank" data-smartkarma-citation="entities:14856:1" rel="noopener">IDEXX Laboratories (IDXX US)</a>, and <a href="https://www.smartkarma.com/entities/illumina-inc" target="_blank" data-smartkarma-citation="entities:8015:1" rel="noopener">Illumina Inc (ILMN US)</a>. Intuitive’s large market opportunity, especially in the international market, less than 10% penetration of its TAM, near monopolistic market positioning, and high switching cost justify its premium valuation. However, the valuation is always questioned amidst the upcoming competition. As Intuitive’s patent expired, big players including <a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a> and <a href="https://www.smartkarma.com/entities/johnson-johnson" target="_blank" data-smartkarma-citation="entities:1132:1" rel="noopener">Johnson &amp; Johnson (JNJ US)</a> are vying to take some share through acquisitions of surgical robot start-up entities. This insight analyzes multiple upcoming competition in the soft tissue surgical robotic market and how Intuitive Surgical is expected to maintain its global leadership amid the competition.</p>

Shares of Intuitive Surgical (ISRG US) corrected ~10% from its 52-week high price of $362 achieved in early September. We believe the correction reflects investors’ fear on the pace of recovery of the elective surgeries globally, especially in the U.S. Amidst this backdrop, the company’s Q3 results announcement on October 19 will be a closely watched event. During their Q2 results announcement, management raised 2021 procedure growth (a key performance parameter) guidance to 27–30% y/y from 22–26% y/y announced during Q1 results announcement. So, outlook on procedure growth guidance for the remainder of the year and early trend into Q4 will the major catalysts for the shares.  Shares of Intuitive Surgical have historically been trading at a high multiple, at par with other high growth ideas such as Abiomed Inc (ABMD US), Align Technology (ALGN US), IDEXX Laboratories (IDXX US), and Illumina Inc (ILMN US). Intuitive’s large market opportunity, especially in the international market, less than 10% penetration of its TAM, near monopolistic market positioning, and high switching cost justify its premium valuation. However, the valuation is always questioned amidst the upcoming competition. As Intuitive’s patent expired, big players including Medtronic Plc (MDT US) and Johnson &amp; Johnson (JNJ US) are vying to take some share through acquisitions of surgical robot start-up entities. This insight analyzes multiple upcoming competition in the soft tissue surgical robotic market and how Intuitive Surgical is expected to maintain its global leadership amid the competition.

Intuitive Surgical (ISRG US): Global Leadership to Continue Amid Upcoming Competition

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

EDDA Healthcare and Technology / Equity Capital Markets

<p>With the continuous improvement of science and technology and the development of healthcare industry, there has been new expectations on digitalization and intelligence. On July 9, 2021, <a href="https://www.smartkarma.com/entities/edda-healthcare-and-technology-holding-limited" target="_blank" data-smartkarma-citation="entities:33805:1" rel="noopener">EDDA Healthcare and Technology (EDD HK),</a> a pioneer in providing innovative intelligent solutions enabling precision surgery, submitted its prospectus to the HKEX for an IPO on the main board. This insight mainly analyzed the industry characteristics, the business and the concerns of the Company.</p>

With the continuous improvement of science and technology and the development of healthcare industry, there has been new expectations on digitalization and intelligence. On July 9, 2021, EDDA Healthcare and Technology (EDD HK), a pioneer in providing innovative intelligent solutions enabling precision surgery, submitted its prospectus to the HKEX for an IPO on the main board. This insight mainly analyzed the industry characteristics, the business and the concerns of the Company.

Pre-IPO EDDA Healthcare and Technology - Concerns Are on Commercialization

United States

Intuitive Surgical, Inc. design, manufactures, and markets surgical systems. The Company offers endoscopes, endoscopic retractors and disectors, scissors, scalpels, forceps, needle holders, electrocautery, ultrasonic cutters, and accessories during surgical procedures. Intuitive Surgical operates worldwide.

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Intuitive Surgical (ISRG US)

MicroPort MedBot IPO: Valuation Insights

Our valuation analysis suggests that the IPO price range is full and we would remain on the sidelines awaiting a better entry opportunity.

Arun George

MicroPort MedBot Pre-IPO - Valuation Appears Reasonable but Sentiment Will Weigh

Shanghai MicroPort MedBot Group (MM), a surgical robot company, aims to raise up to US$200m in its Hong Kong IPO. Valuation appears reasonable but...

Sumeet Singh