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

Medlive Technology / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/medlive-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32985:1" rel="noopener">Medlive Technology (2192 HK)</a> is the largest online professional physician platform in China as measured by the number of registered physician users as of 31 December 2020, according to Frost &amp; Sullivan. Medlive derives most of its revenue from providing solutions that facilitate healthcare marketing to physicians. Medlive ranked first among physician platform-based digital healthcare marketing service providers in China as measured by revenue in 2020, with a 21.4% market share, according to Frost &amp; Sullivan. Medlive is a JV between <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> and Tiantian, each with 50% stakes.</p></div><div><p>Medlive will commence trading on Thursday, 15 July. Medlive priced its IPO at HK$27.20 and <a href="https://inews.hket.com/article/3006198/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%913%E9%9A%BB%E6%96%B0%E8%82%A1%E6%9A%97%E7%9B%A4%E3%80%80%E9%86%AB%E8%84%88%E9%80%9A2192%E5%8D%871%E6%88%90%E3%80%81%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA1350%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">closed 10% up at HK$29.90</a> in the Futu securities grey market. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/medlive-technology-ipo-initiation-what-s-up-doc" target="_blank" data-smartkarma-citation="insights:53683" rel="noopener">Medlive Technology IPO Initiation: What's Up, Doc?</a>, we stated that Medlive believes that it can compete with several players for a slice of healthcare companies’ marketing budgets due to its large and engaged physician user base, which enables it to reach a wider group of physicians more efficiently and achieve a better return on marketing spending. Medlive has strong fundamentals due to fast-paced revenue growth, rising margin and strong cash generation. We concluded that the Medlive IPO is worth a look. In <a href="https://www.smartkarma.com/insights/medlive-technology-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:53879" rel="noopener">Medlive Technology IPO: Valuation Insights</a>, we stated that we would participate in the IPO due to an attractive IPO price range and strong blue-chip cornerstone support.</p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of HK$32.17 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the grey market price is attractive.</p></div></div></div>

Medlive Technology (2192 HK) is the largest online professional physician platform in China as measured by the number of registered physician users as of 31 December 2020, according to Frost &amp; Sullivan. Medlive derives most of its revenue from providing solutions that facilitate healthcare marketing to physicians. Medlive ranked first among physician platform-based digital healthcare marketing service providers in China as measured by revenue in 2020, with a 21.4% market share, according to Frost &amp; Sullivan. Medlive is a JV between M3 Inc (2413 JP) and Tiantian, each with 50% stakes.Medlive will commence trading on Thursday, 15 July. Medlive priced its IPO at HK$27.20 and closed 10% up at HK$29.90 in the Futu securities grey market. In Medlive Technology IPO Initiation: What's Up, Doc?, we stated that Medlive believes that it can compete with several players for a slice of healthcare companies’ marketing budgets due to its large and engaged physician user base, which enables it to reach a wider group of physicians more efficiently and achieve a better return on marketing spending. Medlive has strong fundamentals due to fast-paced revenue growth, rising margin and strong cash generation. We concluded that the Medlive IPO is worth a look. In Medlive Technology IPO: Valuation Insights, we stated that we would participate in the IPO due to an attractive IPO price range and strong blue-chip cornerstone support.Updating for the final IPO net raise, our base-case DCF derived price target of HK$32.17 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the grey market price is attractive.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>Hang Seng Indexes has increased the number of index shares and free float for <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a>, with no change made to the capping factor.</p><p>This will lead to an increase in the index weight for <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> and passive funds benchmarked to the indices will need to buy the stock at the close of trading on 16 July while selling the other index constituents.</p><p>For July, we estimate passive funds will need to buy 45.52m shares (HK$9.34bn; 2 days of ADV) of <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>. The largest impact of passive selling in terms of days of ADV will be on <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>, <a href="https://www.smartkarma.com/entities/clp-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14433:1" rel="noopener">CLP Holdings (2 HK)</a>, <a href="https://www.smartkarma.com/entities/china-construction-bank-h" target="_blank" data-smartkarma-citation="entities:45:1" rel="noopener">China Construction Bank H (939 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a>.</p><p>However, passive funds will need to sell <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> at the implementation of the quarterly rebalance in September when the capping factor will be lowered to cap the weight of the stock at 8% in the three indices.</p>

Hang Seng Indexes has increased the number of index shares and free float for Alibaba Group (9988 HK) in the Hong Kong Hang Seng Index (HSI INDEX), Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX), with no change made to the capping factor.This will lead to an increase in the index weight for Alibaba Group (9988 HK) and passive funds benchmarked to the indices will need to buy the stock at the close of trading on 16 July while selling the other index constituents.For July, we estimate passive funds will need to buy 45.52m shares (HK$9.34bn; 2 days of ADV) of Alibaba Group (9988 HK). The largest impact of passive selling in terms of days of ADV will be on HSBC Holdings (5 HK), CLP Holdings (2 HK), China Construction Bank H (939 HK), Hang Lung Properties (101 HK) and Country Garden Holdings Co (2007 HK).However, passive funds will need to sell Alibaba Group (9988 HK) at the implementation of the quarterly rebalance in September when the capping factor will be lowered to cap the weight of the stock at 8% in the three indices.

Alibaba (9988 HK): Passive Inflow from HSI, HSCEI, HSTECH Trackers in July

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<p>In recent years, the national policy has provided great support for the development of private healthcare providers. Meanwhile, due to the consumption upgrade, residents have raised their requirements on the level of traditional Chinese medicine (TCM), leading to a growing demand for middle and high-end services from providers. Therefore, some private healthcare providers have developed rapidly by taking advantage of the large market demand and favorable policy support, and are heading for IPO. On June 10, <a href="https://www.smartkarma.com/entities/gushengtang-cayman-ltd" target="_blank" data-smartkarma-citation="entities:33503:1" rel="noopener">Gushengtang (GUS HK), </a>a leading neo-TCM healthcare provider, formally submitted its application for listing on the main board of the HKEX. This insight mainly analyzed the industry characteristics, the business and the concerns of the Company.</p>

In recent years, the national policy has provided great support for the development of private healthcare providers. Meanwhile, due to the consumption upgrade, residents have raised their requirements on the level of traditional Chinese medicine (TCM), leading to a growing demand for middle and high-end services from providers. Therefore, some private healthcare providers have developed rapidly by taking advantage of the large market demand and favorable policy support, and are heading for IPO. On June 10, Gushengtang (GUS HK), a leading neo-TCM healthcare provider, formally submitted its application for listing on the main board of the HKEX. This insight mainly analyzed the industry characteristics, the business and the concerns of the Company.

Pre-IPO Gushengtang - Optimistic About Future Development

Chengdu Quanyuantang Pharmacy Chain / Equity Capital Markets

<p>Since the beginning of 2021, the boom of pharmaceutical e-commerce seems to be continuing. Some leading online pharmacies/retail pharmacies are heading for IPOs. On June 9<sup>th</sup>, 2021, the leading omni-channel smart retail pharmacy <a href="https://www.smartkarma.com/entities/chengdu-quanyuantang-pharmacy-chain-joint-stock-co-ltd" target="_blank" data-smartkarma-citation="entities:33478:1" rel="noopener">Chengdu Quanyuantang Pharmacy Chain (QPC HK)</a> submitted the listing application to the HKEX. As a representative of the innovative retail pharmacy in recent years, Quanyuantang held its ground under the "stress test" in the pandemic this year. Also because Quanyuantang is among the first batch of market participants launching online retail pharmacies in China, the news of its IPO caught the market's attention. So, how about this Company? This insight mainly analyzed the industry characteristics, the business, and the concerns of Quanyuantang. </p>

Since the beginning of 2021, the boom of pharmaceutical e-commerce seems to be continuing. Some leading online pharmacies/retail pharmacies are heading for IPOs. On June 9th, 2021, the leading omni-channel smart retail pharmacy Chengdu Quanyuantang Pharmacy Chain (QPC HK) submitted the listing application to the HKEX. As a representative of the innovative retail pharmacy in recent years, Quanyuantang held its ground under the "stress test" in the pandemic this year. Also because Quanyuantang is among the first batch of market participants launching online retail pharmacies in China, the news of its IPO caught the market's attention. So, how about this Company? This insight mainly analyzed the industry characteristics, the business, and the concerns of Quanyuantang. 

Pre-IPO Quanyuantang Pharmacy Chain - Can Quanyuantang Find Its Own Place in the Fierce Competition?

Neusoft Xikang Healthcare Technology Co Ltd / Equity Capital Markets

Neusoft Xikang Healthcare Technology Co Ltd

<p>On the last day of May, <a href="https://www.smartkarma.com/entities/neusoft-medical-systems-co-ltd" target="_blank" data-smartkarma-citation="entities:33446:1" rel="noopener">Neusoft Medical Systems (NMS HK)</a> and <a href="https://www.smartkarma.com/entities/neusoft-xikang-holdings" target="_blank" data-smartkarma-citation="entities:33447:1" rel="noopener">Neusoft Xikang Holdings (NXH HK)</a> submitted their prospectuses to the HKEX at the same time. Actually, the "Neusoft faction" already has two listed companies in A-share and HKEX respectively, namely <a href="https://www.smartkarma.com/entities/neusoft-corp-a" target="_blank" data-smartkarma-citation="entities:6854:1" rel="noopener">Neusoft Corp A (600718 CH)</a> and <a href="https://www.smartkarma.com/entities/neusoft-education-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29234:1" rel="noopener">Neusoft Education Technology Co. Ltd (9616 HK)</a>, with the market value of RMB12 billion and HK$4 billion respectively by the end of July.6, 2021. If Neusoft Medical and <a href="https://www.smartkarma.com/entities/neusoft-xikang-holdings" target="_blank" data-smartkarma-citation="entities:33447:1" rel="noopener">Neusoft Xikang</a> are successfully listed, there will be four public companies in "Neusoft faction". Behind the active capital operation, how about Neusoft Xikang? This insight mainly analyzed the business model and the concerns of the Company.</p>

On the last day of May, Neusoft Medical Systems (NMS HK) and Neusoft Xikang Holdings (NXH HK) submitted their prospectuses to the HKEX at the same time. Actually, the "Neusoft faction" already has two listed companies in A-share and HKEX respectively, namely Neusoft Corp A (600718 CH) and Neusoft Education Technology Co. Ltd (9616 HK), with the market value of RMB12 billion and HK$4 billion respectively by the end of July.6, 2021. If Neusoft Medical and Neusoft Xikang are successfully listed, there will be four public companies in "Neusoft faction". Behind the active capital operation, how about Neusoft Xikang? This insight mainly analyzed the business model and the concerns of the Company.

Pre-IPO Neusoft Xikang Holdings - The Business Model and the Concerns

China

JD Health International Inc. operates drug stores. The Company retails Chinese and Western medicines, nutrition products, health care products, and other products. JD Health International markets its products throughout China.

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JD Health International (6618 HK)

Medlive Technology IPO: Trading Debut

Medlive will commence trading on 15 July. Medlive priced at HK$27.20 and closed 10% up at HK$29.90 in the Futu grey market. Our DCF sensitivity...

Arun George

Alibaba (9988 HK): Passive Inflow from HSI, HSCEI, HSTECH Trackers in July

Following an increase in the number of CCASS shares and free float, Alibaba's index shares will be increased. Passive HSI/ HSCEI/ HSTECH trackers...

Brian Freitas

Pre-IPO Gushengtang - Optimistic About Future Development

This article mainly analyzed Gushengtang in terms of the industry characteristics, the business model, the comparison with peers, the potential...

Xinyao (Criss) Wang

Pre-IPO Quanyuantang Pharmacy Chain - Can Quanyuantang Find Its Own Place in the Fierce Competition?

This article mainly analyzed Quanyuantang in terms of the industry characteristics, the business, the comparison with peers, the concerns and the...

Xinyao (Criss) Wang

Pre-IPO Neusoft Xikang Holdings - The Business Model and the Concerns

This article mainly analyzed Neusoft Xikang in terms of the business model, the financial position, and the related concerns.

Xinyao (Criss) Wang

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