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>
<a href="https://www.smartkarma.com/entities/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>, the largest virtual pharmacy network in China, disclosed a privatisation proposal from a co-founder-led consortium at US$3.66 per ADS, a 20.0% premium to the undisturbed price. </li>
<li>For privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. The co-founders represent 92.04% of the total voting power.</li>
<li>The offer price is unattractive but this is a done deal. At the last close, the gross and annualised spread for a January 2023 completion is 11.6% and 33.4%, respectively. </li>
</ul>



111 Inc (YI US), the largest virtual pharmacy network in China, disclosed a privatisation proposal from a co-founder-led consortium at US$3.66 per ADS, a 20.0% premium to the undisturbed price. 
For privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. The co-founders represent 92.04% of the total voting power.
The offer price is unattractive but this is a done deal. At the last close, the gross and annualised spread for a January 2023 completion is 11.6% and 33.4%, respectively. 


111’s Opportunistic US$3.66 Bid from the Co-Founders

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Huayiwang Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/huayiwang-technology-inc" target="_blank" data-smartkarma-citation="entities:35518:1" rel="noopener">Huayiwang Technology (1985554D HK)</a> is strong in its digital medical education solutions, which is the cornerstone business for the continuous expansion of other solution offerings and ecosystem.</li>
<li>HUAYIWANG charges service fees mainly from pharmaceutical companies, which could be a more sustainable profit model than charging from patients directly.</li>
<li>However, the increasing competition and potential risk of losing medical professionals could shake the foundations of HUAYIWANG's business. </li>
</ul>



Huayiwang Technology (1985554D HK) is strong in its digital medical education solutions, which is the cornerstone business for the continuous expansion of other solution offerings and ecosystem.
HUAYIWANG charges service fees mainly from pharmaceutical companies, which could be a more sustainable profit model than charging from patients directly.
However, the increasing competition and potential risk of losing medical professionals could shake the foundations of HUAYIWANG's business. 


Pre-IPO Huayiwang Technology - The Business Model Is Reasonable, but There Are Also Challenges

Equity Bottom-Up

<ul>
<li>The revenue YoY growth, net profit YoY growth and net profit margin reached a new low in 2021. The performance of Medlive cannot meet the market's expectations of high growth.</li>
<li>The medical knowledge solutions is the cornerstone business and vital to the attractiveness of platform for users. However, this business is not strong enough to make the outlook certain.</li>
<li>In the fierce competition, more efforts are needed on how to convert physician resources into business value continuously. Due to unreliable logic, we are conservative about Medlive at current stage.</li>
</ul>


The revenue YoY growth, net profit YoY growth and net profit margin reached a new low in 2021. The performance of Medlive cannot meet the market's expectations of high growth.
The medical knowledge solutions is the cornerstone business and vital to the attractiveness of platform for users. However, this business is not strong enough to make the outlook certain.
In the fierce competition, more efforts are needed on how to convert physician resources into business value continuously. Due to unreliable logic, we are conservative about Medlive at current stage.


Medlive Technology (2192.HK) - The Logic Has Shaken

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.

<ul>
<li>Medlive’s shares are currently trading at HK$8.15 per share and lost almost 70% YTD which we think was due to the ongoing regulatory crackdown on tech platforms in China.</li>
<li>Medlive's 2021 revenues grew 33.2% YoY to RMB284m while adjusted OP grew 19.0% YoY to RMB123m. Shares reacted negatively due to slowdown in top line growth.</li>
<li>Medlive is currently trading at FY2 EV/Revenue of 0.97x compared to 34.3x when we last wrote. We think shares are extremely cheap and offers a good entry point.</li>
</ul>


Medlive’s shares are currently trading at HK$8.15 per share and lost almost 70% YTD which we think was due to the ongoing regulatory crackdown on tech platforms in China.
Medlive's 2021 revenues grew 33.2% YoY to RMB284m while adjusted OP grew 19.0% YoY to RMB123m. Shares reacted negatively due to slowdown in top line growth.
Medlive is currently trading at FY2 EV/Revenue of 0.97x compared to 34.3x when we last wrote. We think shares are extremely cheap and offers a good entry point.


<ul>
<li>Medlive is trading at HK$36.0 per share, 32.4% higher than the company’s IPO price of HK$27.2. The company’s shares have continued to trade at levels higher than its IPO price.</li>
<li>At FY2 EV/Revenue of 34.30x, Medlive appears attractive to us given the company is going through its high-growth phase alongside its proven business model and strong financials.</li>
<li>Medlive is well positioned to benefit from growing demand for digital healthcare in China which is at an early stage. </li>
</ul>


Medlive is trading at HK$36.0 per share, 32.4% higher than the company’s IPO price of HK$27.2. The company’s shares have continued to trade at levels higher than its IPO price.
At FY2 EV/Revenue of 34.30x, Medlive appears attractive to us given the company is going through its high-growth phase alongside its proven business model and strong financials.
Medlive is well positioned to benefit from growing demand for digital healthcare in China which is at an early stage. 


2022 High Conviction – Medlive: Key Beneficiary of Digital Healthcare Marketing in China

Hong Kong

Medlive Technology Co., Ltd. operates as an online professional physician platform. The Company provides medical information, clinical guidelines, medical conferences, case readings, diagnosis and treatment knowledge base, and other medical information. Medlive Technology offers services in China.

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Medlive Technology (2192 HK)

111’s Opportunistic US$3.66 Bid from the Co-Founders

The offer price is unattractive, but this is a done deal as the co-founders control 92.0% of the voting power. At the last close, the annualised...

Arun George

Pre-IPO Huayiwang Technology - The Business Model Is Reasonable, but There Are Also Challenges

The business model of taking medical professional network as the foundation for expansion of other solution offerings/ecosystem is logical....

Xinyao (Criss) Wang