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

Joinn Laboratories China  Lt / Equity Capital Markets

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<p>Joinn Lab, a China-based niche market leader in the drug safety segment, launched the book building to raise up to USD 843m to list in Hong Kong.  Joinn Lab raised HKD 6,287 million (USD 811m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, Feb 26th.</p>
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<p>In our previous note, we discussed that Joinn Lab's business segment. We note that it has a strong presence in the drug safety segment, particularly the IND application for biologic candidates thanks to its long history in the market and high standard of lab facilities and operation. We think the company has strong growth ahead, driven by the Wuzhou breeding facility, Suzhou lab and California lab in the next two years, followed by expansion in Chongqing and Guangzhou in the longer term. We were of the view that investors would like to pay a premium for the company's strong leadership in the niche market and high growth ahead, but the premium will be offset by its smaller size of operation compared to other CRO players.</p>
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<p>In this note, we look at the updates since our last note. We think the deal attracted strong demand but its upside is capped by its A-share prices. </p>
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<h2>Our previous coverage on Joinn Lab</h2>
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<ul style="list-style-type: disc;">
<li dir="ltr" aria-level="1">
<p><a href="https://www.smartkarma.com/insights/joinn-lab-a-h-leader-in-the-niche-drug-safety-cro-segment" target="_blank" rel="noopener">Joinn Lab (昭衍新药) A+H: Leader in niche drug safety CRO segment</a></p>
</li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/joinn-lab-a-h-visible-upside" target="_blank" rel="noopener">Joinn Lab (昭衍新药) A+H: Visible Upside</a></li>
</ul>
</div>


Joinn Lab, a China-based niche market leader in the drug safety segment, launched the book building to raise up to USD 843m to list in Hong Kong.  Joinn Lab raised HKD 6,287 million (USD 811m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, Feb 26th.


In our previous note, we discussed that Joinn Lab's business segment. We note that it has a strong presence in the drug safety segment, particularly the IND application for biologic candidates thanks to its long history in the market and high standard of lab facilities and operation. We think the company has strong growth ahead, driven by the Wuzhou breeding facility, Suzhou lab and California lab in the next two years, followed by expansion in Chongqing and Guangzhou in the longer term. We were of the view that investors would like to pay a premium for the company's strong leadership in the niche market and high growth ahead, but the premium will be offset by its smaller size of operation compared to other CRO players.


In this note, we look at the updates since our last note. We think the deal attracted strong demand but its upside is capped by its A-share prices. 


Our previous coverage on Joinn Lab




Joinn Lab (昭衍新药) A+H: Leader in niche drug safety CRO segment

Joinn Lab (昭衍新药) A+H: Visible Upside



Joinn Lab (昭衍新药) A+H Trading: Fall in A-Share Limits the Upside

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

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Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Joinn Laboratories China  Lt / Technical Analysis

<p><a href="https://www.smartkarma.com/entities/joinn-laboratories-china-co-a" target="_blank" data-smartkarma-citation="entities:28273:1" rel="noopener">Joinn Laboratories China Co-A (603127 CH) </a>is attractive on weakness near the gap support zone after the explosive breakout above the 108 barrier which now becomes macro support. Align an entry with RSI support just under 40.</p><p><strong>Macro chart point:</strong> The 108 breakout is now key support and after a pullback should see bull energy resume the rise toward a new high with projection at 194.</p>

Joinn Laboratories China Co-A (603127 CH) is attractive on weakness near the gap support zone after the explosive breakout above the 108 barrier which now becomes macro support. Align an entry with RSI support just under 40.Macro chart point: The 108 breakout is now key support and after a pullback should see bull energy resume the rise toward a new high with projection at 194.

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.

<p><a href="https://www.smartkarma.com/entities/joinn-laboratories-china-co-a" target="_blank" data-smartkarma-citation="entities:28273:1" rel="noopener">Joinn Laboratories China Co-A (603127 CH)</a> , the pioneer of commercial GLP laboratories in China has filed for a secondary listing to list its shares on the Hong Kong Stock Exchange. The company plans to issue 43.3m shares at an indicative IPO price range of HK$133-151 per share. At the above indicative price range, the company will raise net proceeds of HK$4.8-5.5bn (approx. US$625-710m). Joinn Laboratories shares are currently trading at RMB161.35 per share on the Shenzhen Stock Exchange (approx. HK$137 per share at an exchange rate of 0.83RMB/HK$).</p><p>The company intends to use the above proceeds on expanding the service capacity of its Suzhou facilities, strengthen its operations in the US (Biomere), further strengthening and expanding its facility network and service capabilities and broaden and deepen the company’s integrated CRO service offerings.</p><p>In our previous insight on the company’s IPO, we discussed Joinn Laboratories’ business model, segments and financials. Refer the extract below from our previous insight:</p><div class="content-highlight"><p><em>China’s CRO market is expanding rapidly and Joinn Laboratories stands to benefit from being the market leader in China’s non-clinical drug safety assessment services industry. The company’s revenues have seen strong growth over the past 2-3 years and the company has taken several initiatives to expand its revenue base through the launch of new services and also expanding into overseas markets. Although the company’s gross margin has declined slightly, due to expanding revenues from non-drug safety assessment services, we expect the company’s GPM to improve in the medium-term with clinical trials and related services achieving more scale. We will discuss the company’s valuation and risks in a follow-up insight</em></p></div>

Joinn Laboratories China Co-A (603127 CH) , the pioneer of commercial GLP laboratories in China has filed for a secondary listing to list its shares on the Hong Kong Stock Exchange. The company plans to issue 43.3m shares at an indicative IPO price range of HK$133-151 per share. At the above indicative price range, the company will raise net proceeds of HK$4.8-5.5bn (approx. US$625-710m). Joinn Laboratories shares are currently trading at RMB161.35 per share on the Shenzhen Stock Exchange (approx. HK$137 per share at an exchange rate of 0.83RMB/HK$).The company intends to use the above proceeds on expanding the service capacity of its Suzhou facilities, strengthen its operations in the US (Biomere), further strengthening and expanding its facility network and service capabilities and broaden and deepen the company’s integrated CRO service offerings.In our previous insight on the company’s IPO, we discussed Joinn Laboratories’ business model, segments and financials. Refer the extract below from our previous insight:China’s CRO market is expanding rapidly and Joinn Laboratories stands to benefit from being the market leader in China’s non-clinical drug safety assessment services industry. The company’s revenues have seen strong growth over the past 2-3 years and the company has taken several initiatives to expand its revenue base through the launch of new services and also expanding into overseas markets. Although the company’s gross margin has declined slightly, due to expanding revenues from non-drug safety assessment services, we expect the company’s GPM to improve in the medium-term with clinical trials and related services achieving more scale. We will discuss the company’s valuation and risks in a follow-up insight

JOINN Laboratories IPO: Attractive Valuation; Overseas Expansion Should Open Up Room for LT Growth

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/joinn-laboratories-h" target="_blank" data-smartkarma-citation="entities:31498:1" rel="noopener">Joinn Laboratories (H) (6127 HK)</a> is a global contract research organisation (CRO). JOINN is the largest CRO in non-clinical drug safety assessment in China with a revenue market share of 15.5% in 2019, according to Frost &amp; Sullivan. </p></div><div>
<p>In <a href="https://www.smartkarma.com/insights/joinn-laboratories-ipo-initiation-on-demand-science" target="_blank" data-smartkarma-citation="insights:47482" rel="noopener">JOINN Laboratories IPO Initiation: On-Demand Science</a>, we stated that JOINN potentially gives investors another avenue to gain exposure to the China CRO industry. On balance, we concluded that JOINN’s fundamentals are attractive as the positives outweigh the negatives. In <a href="https://www.smartkarma.com/insights/joinn-laboratories-ipo-phip-points-to-progress" target="_blank" data-smartkarma-citation="insights:47985" rel="noopener">JOINN Laboratories IPO: PHIP Points to Progress</a>, we noted that the 9M20 results reinforce our belief that JOINN is worth a closer look at and has attractive fundamentals. In <a href="https://www.smartkarma.com/insights/joinn-laboratories-ipo-valuation-first-look" target="_blank" data-smartkarma-citation="insights:48172" rel="noopener">JOINN Laboratories IPO: Valuation First Look</a>, we took a first look at the potential AH discount range for JOINN's H-share listing. </p>
<p>JOINN has launched its Hong Kong IPO at an indicative price range of HK$133-151 per H-share to raise net proceeds of HK$5,909.8 million ($762 million), at the mid-point of the price range. Ten cornerstone investors will subscribe for $268 million of the offer shares (33.8% of the offer shares at the mid-point of the IPO price). The cornerstone investors include OrbiMed Funds, Lake Bleu Capital, China Structural Reform Fund, China Pinnacle Equity Management, Sequoia Capital, Janchor Partners, CRF Investment,  Carmignac Funds, Octagon Capital and Valliance Fund.</p>
<div class="content-highlight"><p>Overall, the combination of a reasonable AH discount and relative valuation suggests the proposed H-share price range is attractive, in our view.</p></div>
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Joinn Laboratories (H) (6127 HK) is a global contract research organisation (CRO). JOINN is the largest CRO in non-clinical drug safety assessment in China with a revenue market share of 15.5% in 2019, according to Frost &amp; Sullivan. 
In JOINN Laboratories IPO Initiation: On-Demand Science, we stated that JOINN potentially gives investors another avenue to gain exposure to the China CRO industry. On balance, we concluded that JOINN’s fundamentals are attractive as the positives outweigh the negatives. In JOINN Laboratories IPO: PHIP Points to Progress, we noted that the 9M20 results reinforce our belief that JOINN is worth a closer look at and has attractive fundamentals. In JOINN Laboratories IPO: Valuation First Look, we took a first look at the potential AH discount range for JOINN's H-share listing. 
JOINN has launched its Hong Kong IPO at an indicative price range of HK$133-151 per H-share to raise net proceeds of HK$5,909.8 million ($762 million), at the mid-point of the price range. Ten cornerstone investors will subscribe for $268 million of the offer shares (33.8% of the offer shares at the mid-point of the IPO price). The cornerstone investors include OrbiMed Funds, Lake Bleu Capital, China Structural Reform Fund, China Pinnacle Equity Management, Sequoia Capital, Janchor Partners, CRF Investment,  Carmignac Funds, Octagon Capital and Valliance Fund.
Overall, the combination of a reasonable AH discount and relative valuation suggests the proposed H-share price range is attractive, in our view.


JOINN Laboratories IPO: Valuation Insights

<p>Joinn Lab, a China-based niche market leader in the drug safety segment, launched the book building to raise up to USD 843m to list in Hong Kong.  </p><p>In our previous note, we discussed that Joinn Lab's business segment. We note that it has a strong presence in the drug safety segment, particularly the IND application for biologic candidates thanks to its long history in the market and high standard of lab facilities and operation. We think the company has strong growth ahead, driven by the Wuzhou breeding facility, Suzhou lab and California lab in the next two years, followed by expansion in Chongqing and Guangzhou in the longer term. </p><p>We are of the view that investors would like to pay a premium for the company's strong leadership in the niche market and high growth ahead, but the premium will be offset by its smaller size of operation compared to other CRO players.</p><p>In this note, we look at the deal term. We think there is clear upside from the high end. The line-up of cornerstone investors is strong. There will also be plenty of shares for institutional investors even if clawback is triggered. We will participate in the deal.</p><h2>Our previous coverage on Joinn Lab</h2><ul><li dir="ltr" aria-level="1"><p><a href="https://www.smartkarma.com/insights/joinn-lab-a-h-leader-in-the-niche-drug-safety-cro-segment" target="_blank" rel="noopener">Joinn Lab (昭衍新药) A+H: Leader in niche drug safety CRO segment</a></p></li></ul>

Joinn Lab, a China-based niche market leader in the drug safety segment, launched the book building to raise up to USD 843m to list in Hong Kong.  In our previous note, we discussed that Joinn Lab's business segment. We note that it has a strong presence in the drug safety segment, particularly the IND application for biologic candidates thanks to its long history in the market and high standard of lab facilities and operation. We think the company has strong growth ahead, driven by the Wuzhou breeding facility, Suzhou lab and California lab in the next two years, followed by expansion in Chongqing and Guangzhou in the longer term. We are of the view that investors would like to pay a premium for the company's strong leadership in the niche market and high growth ahead, but the premium will be offset by its smaller size of operation compared to other CRO players.In this note, we look at the deal term. We think there is clear upside from the high end. The line-up of cornerstone investors is strong. There will also be plenty of shares for institutional investors even if clawback is triggered. We will participate in the deal.Our previous coverage on Joinn LabJoinn Lab (昭衍新药) A+H: Leader in niche drug safety CRO segment

Joinn Lab (昭衍新药) A+H: Visible Upside

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.

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Joinn Laboratories China Lt (603127 CH)

JOINN Lab Gap Buy Target

Joinn Laboratories China Co-A (603127 CH) is attractive on weakness near the gap support zone. 108 breakout point is now macro support. Align an...

Thomas Schroeder

JOINN Laboratories IPO: Attractive Valuation; Overseas Expansion Should Open Up Room for LT Growth

Joinn Laboratories, the pioneer of commercial GLP laboratories in China has filed for a secondary listing to list its shares on the Hong Kong Stock...

Shifara Samsudeen, ACMA, CGMA

JOINN Laboratories IPO: Valuation Insights

JOINN has launched its HK IPO at an indicative price range of HK$133-151 per H-share. The combination of a reasonable AH discount and relative...

Arun George

Joinn Lab (昭衍新药) A+H: Visible Upside

There is clear upside from the high end with strong line-up of cornerstone investors. There will also be plenty of shares for institutional...

Ke Yan, CFA, FRM

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52-week Range

Market Cap (USDm)

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Joinn Lab (昭衍新药) A+H Trading: Fall in A-Share Limits the Upside

In this note, we look at updates since our last note. We think the deal attracted strong demands but its upside is capped by its A-share prices.

Ke Yan, CFA, FRM

JOINN Lab Gap Buy Target

Joinn Laboratories China Co-A (603127 CH) is attractive on weakness near the gap support zone. 108 breakout point is now macro support. Align an...

Thomas Schroeder

JOINN Laboratories IPO: Attractive Valuation; Overseas Expansion Should Open Up Room for LT Growth

Joinn Laboratories, the pioneer of commercial GLP laboratories in China has filed for a secondary listing to list its shares on the Hong Kong Stock...

Shifara Samsudeen, ACMA, CGMA

JOINN Laboratories IPO: Valuation Insights

JOINN has launched its HK IPO at an indicative price range of HK$133-151 per H-share. The combination of a reasonable AH discount and relative...

Arun George

Joinn Lab (昭衍新药) A+H: Visible Upside

There is clear upside from the high end with strong line-up of cornerstone investors. There will also be plenty of shares for institutional...

Ke Yan, CFA, FRM