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.

Event-Driven

<ul>
<li>BGH’s revised scheme offer will pay $7.65 per <a href="https://www.smartkarma.com/entities/virtus-health-ltd" target="_blank" data-smartkarma-citation="entities:14776:1" rel="noopener">Virtus Health (VRT AU)</a> share, which is 0.7% and 2.0% higher than CapVest’s rival scheme (A$7.60) and off-market takeover offer (A$7.50), respectively.</li>
<li>BGH (19.99% stake) will vote against the CapVest scheme and will not accept any takeover offer from CapVest. Consequently, CapVest’s best option is an improved off-market takeover bid.</li>
<li>As CapVest's offer is marginally below BGH's revised offer, CapVest retains the potential to lob an improved offer, in our view.</li>
</ul>


BGH’s revised scheme offer will pay $7.65 per Virtus Health (VRT AU) share, which is 0.7% and 2.0% higher than CapVest’s rival scheme (A$7.60) and off-market takeover offer (A$7.50), respectively.
BGH (19.99% stake) will vote against the CapVest scheme and will not accept any takeover offer from CapVest. Consequently, CapVest’s best option is an improved off-market takeover bid.
As CapVest's offer is marginally below BGH's revised offer, CapVest retains the potential to lob an improved offer, in our view.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/virtus-health-ltd" target="_blank" data-smartkarma-citation="entities:14776:1" rel="noopener">Virtus Health (VRT AU)</a> announced an offer from CapVest comprising of A$7.60 per share via a scheme (a 7.0% premium to BGH’s A$7.10 offer) or A$7.50 via an off-market takeover. </li>
<li>CapVest’s offer is contingent on exclusivity and cost recovery protections. The Board will recommend a binding offer of at least A$7.60 via a scheme or A$7.50 via an off-market takeover.</li>
<li>Due to the healthy premium to historical multiples and share prices implied by the CapVest offer, it is likely that BGH will be hesitant to start a bidding war.    </li>
</ul>



Virtus Health (VRT AU) announced an offer from CapVest comprising of A$7.60 per share via a scheme (a 7.0% premium to BGH’s A$7.10 offer) or A$7.50 via an off-market takeover. 
CapVest’s offer is contingent on exclusivity and cost recovery protections. The Board will recommend a binding offer of at least A$7.60 via a scheme or A$7.50 via an off-market takeover.
Due to the healthy premium to historical multiples and share prices implied by the CapVest offer, it is likely that BGH will be hesitant to start a bidding war.    


Virtus Receives a Competing Offer from CapVest

<ul>
<li>BGH Capital has lobbed a non-binding A$7.10 cash per share offer. The offer price represents a 36.3% premium to the unaffected price of A$5.21 (13 December).</li>
<li>On 13 December, BGH Capital acquired a 9.99% stake at A$7.10 per share and has entered into a swap deal for another 10.00% stake. </li>
<li>We think that the offer is reasonable in the context of historical share prices and multiples. At the last close price of A$6.70, the gross spread is 6.0%.</li>
</ul>


BGH Capital has lobbed a non-binding A$7.10 cash per share offer. The offer price represents a 36.3% premium to the unaffected price of A$5.21 (13 December).
On 13 December, BGH Capital acquired a 9.99% stake at A$7.10 per share and has entered into a swap deal for another 10.00% stake. 
We think that the offer is reasonable in the context of historical share prices and multiples. At the last close price of A$6.70, the gross spread is 6.0%.


Virtus Receives a A$7.10 Per Share Offer from BGH Capital

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 Bottom-Up

Jinxin Fertility Group  / Equity Bottom-Up

<ul>
<li>Jinxin Fertility is a leading IVF player with strong foothold in Southwest China, Greater Bay Area in China and the Westcoast of the US.</li>
<li>The company's growth will come from both organic and inorganic expansion, with recovery of international business as its long term catalyst.</li>
<li>The company's valuation is appealing with potential of more than 100% upside. </li>
</ul>


Jinxin Fertility is a leading IVF player with strong foothold in Southwest China, Greater Bay Area in China and the Westcoast of the US.
The company's growth will come from both organic and inorganic expansion, with recovery of international business as its long term catalyst.
The company's valuation is appealing with potential of more than 100% upside. 


2022 High Conviction: Tail Winds for Jinxin Fertility

<p>Jinxin Fertility announced that it is acquiring the Jinxin Woman and Children Hospital from its main shareholder with a mix of cash and convertible bond. We attended the call which provided more details of the transaction and the rationale behind. While the transaction is EPS accretive to the listed company and the explanation makes sense as to capture more value over the O&amp;B value chain, we do think the acquisition could be viewed as controversial. Though we continue to like the company, we think there could be de-rating of the PER multiple due to increasing contribution from traditional O&amp;B business.  </p>

Jinxin Fertility announced that it is acquiring the Jinxin Woman and Children Hospital from its main shareholder with a mix of cash and convertible bond. We attended the call which provided more details of the transaction and the rationale behind. While the transaction is EPS accretive to the listed company and the explanation makes sense as to capture more value over the O&amp;B value chain, we do think the acquisition could be viewed as controversial. Though we continue to like the company, we think there could be de-rating of the PER multiple due to increasing contribution from traditional O&amp;B business.  

Jinxin Fertility: Accretive but Slightly Controversial Acquisition of Jinxin WCH

China

Jinxin Fertility Group Limited provides assisted reproductive services. The Company offers vitro fertilization services, embryo transfer services, management services, and other services. Jinxin Fertility Group also provides ancillary medical services.

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Jinxin Fertility Group (1951 HK)

BGH’s Revised Higher Offer for Virtus

BGH has returned with a revised offer of $7.65 per share, which is 7.7% higher than BGH’s original offer of A$7.10. CapVest’s (rival suitor) best...

Arun George

Virtus Receives a Competing Offer from CapVest

CapVest's offer comprises A$7.60 via a scheme (7.0% premium to BGH’s A$7.10 offer) or A$7.50 via an off-market takeover. Due to the healthy...

Arun George

2022 High Conviction: Tail Winds for Jinxin Fertility

We like Jinxin Fertility as a leading IVF player with strong foothold in Southwest China, Greater Bay Area in China and the Westcoast of the US. It...

Ke Yan, CFA, FRM

Jinxin Fertility: Accretive but Slightly Controversial Acquisition of Jinxin WCH

We attended management call to understand its acquisition of Jinxin Woman and Children Hospital. Though the deal dilutes the core IVF business it...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BGH’s Revised Higher Offer for Virtus

BGH has returned with a revised offer of $7.65 per share, which is 7.7% higher than BGH’s original offer of A$7.10. CapVest’s (rival suitor) best...

Arun George

Virtus Receives a Competing Offer from CapVest

CapVest's offer comprises A$7.60 via a scheme (7.0% premium to BGH’s A$7.10 offer) or A$7.50 via an off-market takeover. Due to the healthy...

Arun George

Virtus Receives a A$7.10 Per Share Offer from BGH Capital

BGH Capital has lobbed a non-binding A$7.10 cash per share offer, a 36.3% premium to the unaffected price. The offer is reasonable in the context...

Arun George

2022 High Conviction: Tail Winds for Jinxin Fertility

We like Jinxin Fertility as a leading IVF player with strong foothold in Southwest China, Greater Bay Area in China and the Westcoast of the US. It...

Ke Yan, CFA, FRM

Jinxin Fertility: Accretive but Slightly Controversial Acquisition of Jinxin WCH

We attended management call to understand its acquisition of Jinxin Woman and Children Hospital. Though the deal dilutes the core IVF business it...

Ke Yan, CFA, FRM