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

Beijing Airdoc Technology / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/beijing-airdoc-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:33524:1" rel="noopener">Beijing Airdoc Technology (2251 HK)</a><span> is a global market leader and pioneer in providing AI-empowered retina-based early detection, auxiliary diagnosis and health risk assessment solutions. The core product is Airdoc-AIFUNDUS which is an AI-based Software-as-a-Medical Device (SaMD) that uses deep learning algorithms to accurately detect and diagnose chronic diseases from retinal images. Airdoc-AIFUNDUS (1.0), the first version of the core product, was commercialised at the start of 2021. </span></p></div><div><p>At the proposed IPO price range of HK$75.10-81.30 per share, Airdoc will have a market cap of HK$7,778-8,420 million ($1.0-1.1 billion). At the mid-point of the IPO price range, the net proceeds are HK$1,632.7 million ($210 million).</p></div><div><p>Eight cornerstone investors will purchase $69.5 million worth of the offer shares (31.0% of the offer shares at the mid-point of the IPO price range). Three out of the eight cornerstones are existing investors. They are LAV Group, Lake Bleu Capital and OrbiMed. The remaining cornerstones which are not existing shareholders are CloudAlpha Capital, GF Fund, IvyRock Funds, LMR Fund and WT Funds.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/airdoc-technology-ipo-initiation-seeing-the-light" target="_blank" data-smartkarma-citation="insights:58501" rel="noopener">Airdoc Technology IPO Initiation: Seeing the Light</a>, we opined that, unlike most healthcare IPO hopefuls, Airdoc has recently commercially launched a version of its core product. With industry-leading sensitivity and specificity achieved in multi-centre clinical trials, Airdoc-AIFUNDUS has the potential to succeed in a competitive market. We concluded that Airdoc is worth a closer look.</p></div><div><div><div class="content-highlight"><p>Our valuation analysis suggests that the IPO price range is attractive. We also note that the mid-point of the IPO price range is a modest 5.7% discount to the last valuation round (Series D to raise $38 million on 30 April 2021).  </p></div></div></div>

Beijing Airdoc Technology (2251 HK) is a global market leader and pioneer in providing AI-empowered retina-based early detection, auxiliary diagnosis and health risk assessment solutions. The core product is Airdoc-AIFUNDUS which is an AI-based Software-as-a-Medical Device (SaMD) that uses deep learning algorithms to accurately detect and diagnose chronic diseases from retinal images. Airdoc-AIFUNDUS (1.0), the first version of the core product, was commercialised at the start of 2021. At the proposed IPO price range of HK$75.10-81.30 per share, Airdoc will have a market cap of HK$7,778-8,420 million ($1.0-1.1 billion). At the mid-point of the IPO price range, the net proceeds are HK$1,632.7 million ($210 million).Eight cornerstone investors will purchase $69.5 million worth of the offer shares (31.0% of the offer shares at the mid-point of the IPO price range). Three out of the eight cornerstones are existing investors. They are LAV Group, Lake Bleu Capital and OrbiMed. The remaining cornerstones which are not existing shareholders are CloudAlpha Capital, GF Fund, IvyRock Funds, LMR Fund and WT Funds.In Airdoc Technology IPO Initiation: Seeing the Light, we opined that, unlike most healthcare IPO hopefuls, Airdoc has recently commercially launched a version of its core product. With industry-leading sensitivity and specificity achieved in multi-centre clinical trials, Airdoc-AIFUNDUS has the potential to succeed in a competitive market. We concluded that Airdoc is worth a closer look.Our valuation analysis suggests that the IPO price range is attractive. We also note that the mid-point of the IPO price range is a modest 5.7% discount to the last valuation round (Series D to raise $38 million on 30 April 2021).  

Airdoc Technology IPO: Valuation Insights

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<p>Medlive Technology is the largest player in China’s online professional physician platform, with a 21% market share. Shares are trading at their highest level since listing in July.  Consistent revenue growth (60% CAGR during 2018–2020), scope of further margin expansion by leveraging on its scalable business model, zero-debt status, bluechip clientele (In 2020, 18 of the top 20 multi-national pharmaceutical companies in the world by revenue were Medlive’s customers), and favorable macro tailwind justify the premium valuation of the shares of the company. With its large and engaged physician user base, Medlife enables pharmaceutical and medical device companies to reach to ~60% of all licensed physicians in China, thereby making its platform even more attractive to the stakeholders in the healthcare industry. The company is a clear beneficiary of both the COVID-19 pandemic and China’s centralized volume-based purchasing policy. The former limits physical meeting for launching new drugs/products, thereby enhancing the scope of digital healthcare marketing services, while the later calls for cost effective marketing as the pharmaceutical companies are taking a huge price cut to the extent of 70–80% on the selling price. With strong fundamentals, coupled with market leadership positioning amid favorable industry tailwind, Medlive Technology remains our top pick in China’s digital healthcare boom.       </p>

Medlive Technology is the largest player in China’s online professional physician platform, with a 21% market share. Shares are trading at their highest level since listing in July.  Consistent revenue growth (60% CAGR during 2018–2020), scope of further margin expansion by leveraging on its scalable business model, zero-debt status, bluechip clientele (In 2020, 18 of the top 20 multi-national pharmaceutical companies in the world by revenue were Medlive’s customers), and favorable macro tailwind justify the premium valuation of the shares of the company. With its large and engaged physician user base, Medlife enables pharmaceutical and medical device companies to reach to ~60% of all licensed physicians in China, thereby making its platform even more attractive to the stakeholders in the healthcare industry. The company is a clear beneficiary of both the COVID-19 pandemic and China’s centralized volume-based purchasing policy. The former limits physical meeting for launching new drugs/products, thereby enhancing the scope of digital healthcare marketing services, while the later calls for cost effective marketing as the pharmaceutical companies are taking a huge price cut to the extent of 70–80% on the selling price. With strong fundamentals, coupled with market leadership positioning amid favorable industry tailwind, Medlive Technology remains our top pick in China’s digital healthcare boom.       

Medlive Technology (2192 HK): Top Pick in China’s Digital Healthcare Space

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>In this weeks recap, we look at:</p><ul>
<li>the <a href="https://www.smartkarma.com/entities/santos-ltd" target="_blank" data-smartkarma-citation="entities:711:1" rel="noopener">Santos Ltd (STO AU)</a> / <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a> merger and the impact on the S&amp;P/ASX 100 and <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> </li>
<li>the spread on the <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a> / <a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a> deal and potential index flows</li>
<li>the listing of <a href="https://www.smartkarma.com/entities/hyundai-heavy-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:33808:1" rel="noopener">Hyundai Heavy Industries (329180 KS)</a> and the potential Fast Entry into the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200-index" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX)</a> </li>
<li>the potential changes to the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> at the December rebalance</li>
<li>the potential changes to the <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> at the December rebalance</li>
<li>the potential changes to the Hang Seng Composite Index (HSCI) at the December and March rebalances</li>
</ul><p>There are no major index events in the coming week - there were enough in the last week!</p><p>There were substantial inflows to onshore China ETFs in the last week, while there was finally an outflow (albeit a small one) from <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-fund" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KraneShares CSI China Internet Fund (KWEB US)</a>. </p>

In this weeks recap, we look at:
the Santos Ltd (STO AU) / Oil Search Ltd (OSH AU) merger and the impact on the S&amp;P/ASX 100 and S&amp;P/ASX 200 (AS51 INDEX) 
the spread on the Keppel Corp (KEP SP) / Singapore Press Holdings (SPH SP) deal and potential index flows
the listing of Hyundai Heavy Industries (329180 KS) and the potential Fast Entry into the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX) 
the potential changes to the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the December rebalance
the potential changes to the Hang Seng Tech Index (HSTECH INDEX) at the December rebalance
the potential changes to the Hang Seng Composite Index (HSCI) at the December and March rebalances
There are no major index events in the coming week - there were enough in the last week!There were substantial inflows to onshore China ETFs in the last week, while there was finally an outflow (albeit a small one) from KraneShares CSI China Internet Fund (KWEB US). 

Index Rebalance & ETF Flow Recap: STO/OSH, KEP/SPH, HHI, SET50, HSTECH, HSCI

Orient Overseas International / Event-Driven

<p>Hang Seng Indexes Company (HSIL) reviews the constituents of the Hang Seng Composite Index (HSCI) on a half yearly basis in March and September with data cut-off dates as of the end of December and June.</p><p>The December review will see the inclusion of stocks that were newly listed from 1 July to 30 September and meet the criteria for joining the index.</p><p>We expect <a href="https://www.smartkarma.com/entities/brii-biosciences" target="_blank" data-smartkarma-citation="entities:33014:1" rel="noopener">Brii Biosciences (2137 HK)</a>, <a href="https://www.smartkarma.com/entities/helen-s-international-holdings" target="_blank" data-smartkarma-citation="entities:34113:1" rel="noopener">Helen's International Holdings (9869 HK)</a>, <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>, <a href="https://www.smartkarma.com/entities/keymed-biosciences-inc" target="_blank" data-smartkarma-citation="entities:33011:1" rel="noopener">Keymed Biosciences Inc (2162 HK)</a> and <a href="https://www.smartkarma.com/entities/sce-intelligent-commercial-management" target="_blank" data-smartkarma-citation="entities:33500:1" rel="noopener">SCE Intelligent Commercial Management (606 HK)</a> to be included in the index at the close of trading on 3 December.</p><p>For the regular rebalance in March 2022, we see 17 potential inclusions to the index and 4 potential deletions. There are 4 stocks that are close adds and 5 that are close deletes.</p><div><p>Although there are no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. There is pre-positioning in the stocks in the lead up to the announcement and prior to the stocks being open for purchase by mainland investors.</p></div>

Hang Seng Indexes Company (HSIL) reviews the constituents of the Hang Seng Composite Index (HSCI) on a half yearly basis in March and September with data cut-off dates as of the end of December and June.The December review will see the inclusion of stocks that were newly listed from 1 July to 30 September and meet the criteria for joining the index.We expect Brii Biosciences (2137 HK), Helen's International Holdings (9869 HK), Medlive Technology (2192 HK), Keymed Biosciences Inc (2162 HK) and SCE Intelligent Commercial Management (606 HK) to be included in the index at the close of trading on 3 December.For the regular rebalance in March 2022, we see 17 potential inclusions to the index and 4 potential deletions. There are 4 stocks that are close adds and 5 that are close deletes.Although there are no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors. There is pre-positioning in the stocks in the lead up to the announcement and prior to the stocks being open for purchase by mainland investors.

HSCI Index Rebalance and Stock Connect: Potential Changes in December and March

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.

Neusoft Xikang Healthcare Technology Co Ltd / Equity Capital Markets

Neusoft Xikang Healthcare Technology Co Ltd

<p>Neusoft Xikang, a leading neo-healthcare service provider in China, plans to raise up to USD 400m via a Hong Kong listing.</p><p>Neusoft Xikang started with providing information integration of healthcare institutions for local governments and expanded its business into online healthcare. It then expanded to provide infrastructure for online and offline healthcare services which became the growth driver in recent years. Analysing the company's competitive position is tricky given the vast scope of its business that deals with government, hospitals, primary healthcare institutions, insurers and patients. So is forecasting the inflection point of its profitability.  </p><p>Having said that, we think the IPO is still interesting and worth following.</p>

Neusoft Xikang, a leading neo-healthcare service provider in China, plans to raise up to USD 400m via a Hong Kong listing.Neusoft Xikang started with providing information integration of healthcare institutions for local governments and expanded its business into online healthcare. It then expanded to provide infrastructure for online and offline healthcare services which became the growth driver in recent years. Analysing the company's competitive position is tricky given the vast scope of its business that deals with government, hospitals, primary healthcare institutions, insurers and patients. So is forecasting the inflection point of its profitability.  Having said that, we think the IPO is still interesting and worth following.

Neusoft Xikang (东软熙康) Pre-IPO: A Long Way to Profit

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Medlive Technology (2192 HK)

Airdoc Technology IPO: Valuation Insights

Our valuation analysis suggests that the IPO price range is attractive. We also note that the mid-point of the IPO price range is a modest 5.7%...

Arun George