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

<p><a href="https://www.smartkarma.com/entities/broncus-holding-corporation" target="_blank" data-smartkarma-citation="entities:33315:1" rel="noopener">Broncus (BRC HK)</a> is a medical device company focused on the development of interventional pulmonology products. Broncus has 17 products and major product candidates under various development stages. The core products are <em>InterVapor</em>, the world’s first and only thermal vapour energy ablation system to treat lung diseases and <em>RF-II</em>, which is the only radiofrequency ablation system that specifically targets lung cancer.</p><p>Broncus has a credible management team with a commendable commercialisation track record and blue-chip backers. Pre-IPO investors include Qiming Venture Capital, DiNovA Capital, Lake Bleu Capital, FountainVest and <a href="https://www.smartkarma.com/entities/intuitive-surgical-inc" target="_blank" data-smartkarma-citation="entities:15853:1" rel="noopener">Intuitive Surgical (ISRG US)</a>. Broncus is pre-marketing an HKEx IPO to raise $300 million, according to press reports. </p><p>Broncus currently generates revenue primarily from navigation systems (LungPoint Plus, LungPro, LungPoint and planners) where it ranks second in China with a market share of 37.5% measured by sales revenue for the years ended 2018, 2019 and 2020, according to Frost &amp; Sullivan. However, the market is relatively small as the market size of interventional pulmonology diagnostic consumables in China reached just $26.3 million in 2020, according to Frost &amp; Sullivan. </p><div class="content-highlight"><p>Broncus’s core products aim for a large addressable market by targeting the pulmonary disease treatment market. The core products' differentiation in terms of technology and target indications increases the probability of success. Overall, we believe that Broncus’ product portfolio is attractive. </p></div>

Broncus (BRC HK) is a medical device company focused on the development of interventional pulmonology products. Broncus has 17 products and major product candidates under various development stages. The core products are InterVapor, the world’s first and only thermal vapour energy ablation system to treat lung diseases and RF-II, which is the only radiofrequency ablation system that specifically targets lung cancer.Broncus has a credible management team with a commendable commercialisation track record and blue-chip backers. Pre-IPO investors include Qiming Venture Capital, DiNovA Capital, Lake Bleu Capital, FountainVest and Intuitive Surgical (ISRG US). Broncus is pre-marketing an HKEx IPO to raise $300 million, according to press reports. Broncus currently generates revenue primarily from navigation systems (LungPoint Plus, LungPro, LungPoint and planners) where it ranks second in China with a market share of 37.5% measured by sales revenue for the years ended 2018, 2019 and 2020, according to Frost &amp; Sullivan. However, the market is relatively small as the market size of interventional pulmonology diagnostic consumables in China reached just $26.3 million in 2020, according to Frost &amp; Sullivan. Broncus’s core products aim for a large addressable market by targeting the pulmonary disease treatment market. The core products' differentiation in terms of technology and target indications increases the probability of success. Overall, we believe that Broncus’ product portfolio is attractive. 

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.

Shanghai HeartCare Medical Technology / Equity Capital Markets

<p>Shanghai HeartCare is a neuro-interventional medical device pioneer in China. It has four products approved for marketing and expects 9 products to commercialize in 2021, as well 10 products to commercialize between 2022 and 2025. The company launched book building to raise up to USD 145m via a Hong Kong listing.</p><p>In our previous note, we looked at the company's two core products Captor and LAA Occluder. We think the Captor, a stent retrieving thrombectomy device, is the main selling point of the deal given its decent efficacy and safety data and it has already been approved by the NMPA. Market structure for Captor is characterized by the early stage of growth and dominance by MNC players and the company's product is the first approved domestic product with commendable data from head-to-head clinical trials. The company's management are mainly ex-employee from Microport Scientific, a leading international medical device player in China.</p><p>In this note, we provide an update for the book building. We think the upside is substantial barring negative outcomes from the legal proceedings with Medtronic.</p>

Shanghai HeartCare is a neuro-interventional medical device pioneer in China. It has four products approved for marketing and expects 9 products to commercialize in 2021, as well 10 products to commercialize between 2022 and 2025. The company launched book building to raise up to USD 145m via a Hong Kong listing.In our previous note, we looked at the company's two core products Captor and LAA Occluder. We think the Captor, a stent retrieving thrombectomy device, is the main selling point of the deal given its decent efficacy and safety data and it has already been approved by the NMPA. Market structure for Captor is characterized by the early stage of growth and dominance by MNC players and the company's product is the first approved domestic product with commendable data from head-to-head clinical trials. The company's management are mainly ex-employee from Microport Scientific, a leading international medical device player in China.In this note, we provide an update for the book building. We think the upside is substantial barring negative outcomes from the legal proceedings with Medtronic.

Heartcare (心玮医疗) IPO: Decent Upside Barring Negative Lawsuit Outcomes

Zylox-Tonbridge Medical Technology / Equity Capital Markets

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<p><a href="https://www.smartkarma.com/entities/zylox-tonbridge-medical-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32974:1" rel="noopener">Zylox-Tonbridge Medical Technology (2190 HK)</a> is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). </p>
<p>Zylox-Tonbridge has launched an HKEx IPO to raise net proceeds of $300 million at the mid-point of the IPO price range of HK$39.80-42.70 per share. Twelve cornerstone investors will subscribe for $145 million worth of the offer shares (45.47% of the offer shares at the mid-point). Pricing will be finalised on 25 June and the shares will list on 5 July.</p>
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<p>In <a href="https://www.smartkarma.com/insights/zylox-tonbridge-ipo-living-on" target="_blank" data-smartkarma-citation="insights:53469" rel="noopener">Zylox-Tonbridge IPO: Living On</a>, we opined that Zylox-Tonbridge is on the cusp of delivering on a sizeable addressable market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. We concluded that Zylox-Tonbridge’s product portfolio is attractive.</p>
<div class="content-highlight"><p>Our base-case DCF valuation is HK$48.56 per share, which is an 18% upside to the mid-point of the IPO price range of HK$39.80-42.70 per share. Consequently, we would participate in the IPO. </p></div>
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Zylox-Tonbridge Medical Technology (2190 HK) is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). 
Zylox-Tonbridge has launched an HKEx IPO to raise net proceeds of $300 million at the mid-point of the IPO price range of HK$39.80-42.70 per share. Twelve cornerstone investors will subscribe for $145 million worth of the offer shares (45.47% of the offer shares at the mid-point). Pricing will be finalised on 25 June and the shares will list on 5 July.

In Zylox-Tonbridge IPO: Living On, we opined that Zylox-Tonbridge is on the cusp of delivering on a sizeable addressable market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. We concluded that Zylox-Tonbridge’s product portfolio is attractive.
Our base-case DCF valuation is HK$48.56 per share, which is an 18% upside to the mid-point of the IPO price range of HK$39.80-42.70 per share. Consequently, we would participate in the IPO. 


<p><a href="https://www.smartkarma.com/entities/shanghai-heartcare-medical-technology-corporation-limited" target="_blank" data-smartkarma-citation="entities:32192:1" rel="noopener">Shanghai HeartCare Medical Technology (HMT HK)</a> is a China-based neuro-interventional medical device manufacturer with a product portfolio that spans the treatment and prevention of ischemic stroke to the treatment of haemorrhagic stroke. HeartCare’s product portfolio consists of a total of 23 commercialised products and product candidates, including four ischemic stroke treatment devices with NMPA approval.</p><p>HearCare’s shareholders include <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a>, Temasek, Lake Bleu Capital, <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a> and Canada Pension Plan Investment Board (through a special purpose vehicle). HeartCare is set to pre-market an HKEx IPO to raise $300 million this quarter, according to press reports. </p><div class="content-highlight"><p>HeartCare only started to generate revenue in 1Q20 through the commercialisation of two products (<em>SupSelek</em> and <em>ExtraFlex</em>). <em>Captor</em> thrombectomy device, a core product, was commercialised in December 2020 and <em>Fullblock</em> balloon guiding catheter received NMPA approval in December 2020. HeartCare aims to commercialise nine currently late-stage product candidates in 2021 and ten currently earlier-stage product candidates between 2022 and 2025. With a strong near-term commercialisation pipeline, HeartCare has shifted from a concept to a revenue-generating stock. Overall, we believe that HeartCare’s product portfolio is attractive. </p></div>

Shanghai HeartCare Medical Technology (HMT HK) is a China-based neuro-interventional medical device manufacturer with a product portfolio that spans the treatment and prevention of ischemic stroke to the treatment of haemorrhagic stroke. HeartCare’s product portfolio consists of a total of 23 commercialised products and product candidates, including four ischemic stroke treatment devices with NMPA approval.HearCare’s shareholders include Shanghai Fosun Pharmaceutical (Group) (2196 HK), Temasek, Lake Bleu Capital, China International Capital Corporation (3908 HK) and Canada Pension Plan Investment Board (through a special purpose vehicle). HeartCare is set to pre-market an HKEx IPO to raise $300 million this quarter, according to press reports. HeartCare only started to generate revenue in 1Q20 through the commercialisation of two products (SupSelek and ExtraFlex). Captor thrombectomy device, a core product, was commercialised in December 2020 and Fullblock balloon guiding catheter received NMPA approval in December 2020. HeartCare aims to commercialise nine currently late-stage product candidates in 2021 and ten currently earlier-stage product candidates between 2022 and 2025. With a strong near-term commercialisation pipeline, HeartCare has shifted from a concept to a revenue-generating stock. Overall, we believe that HeartCare’s product portfolio is attractive. 

Shanghai HeartCare Medical IPO Initiation: Surviving Strokes

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Microport Cardioflow Medtech / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/microport-cardioflow-medtech-corporation" target="_blank" data-smartkarma-citation="entities:31084:1" rel="noopener">MicroPort CardioFlow (1844972D HK)</a> has filed a PHIP in conjunction with its planned listing on the HKEX. This Insight discusses the incremental disclosures; developments in the TAVR market; and the nascent TMV opportunity. We tag this Insight as Bullish pending announcement of the offering's terms. </p>

MicroPort CardioFlow (1844972D HK) has filed a PHIP in conjunction with its planned listing on the HKEX. This Insight discusses the incremental disclosures; developments in the TAVR market; and the nascent TMV opportunity. We tag this Insight as Bullish pending announcement of the offering's terms. 

MicroPort CardioFlow: PHIP Updates and More on TMV

United States

Medtronic, PLC develops therapeutic and diagnostic medical products. The Company's principal products include those for bradycardia pacing, tachyarrhythmia management, atrial fibrillation management, heart failure management, heart valve replacement, malignant and non-malignant pain, and movement disorders. Medtronic's products are sold worldwide.

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Medtronic Plc (MDT US)

Broncus IPO: Every Breath They Take

Broncus is pre-marketing an HKEx IPO to raise $300m. The core products' differentiation in terms of technology and target indications increases the...

Arun George

Heartcare (心玮医疗) IPO: Decent Upside Barring Negative Lawsuit Outcomes

We provide an update for HeartCare's book building. We think the upside is substantial barring negative outcomes from the legal proceedings with...

Ke Yan, CFA, FRM

Zylox-Tonbridge IPO: Valuation Insights

Our base-case DCF valuation is HK$48.56 per share, which is an 18% upside to the mid-point of the IPO price range of HK$39.80-42.70 per share....

Arun George

Shanghai HeartCare Medical IPO Initiation: Surviving Strokes

HeartCare is set to pre-market an HKEx IPO to raise $300 million this quarter, according to press reports. Overall, we believe that HeartCare’s...

Arun George

MicroPort CardioFlow: PHIP Updates and More on TMV

MicroPort CardioFlow plans an HKEX listing. This Insight discusses updated disclosures in its PHIP filing; developments in the TAVR market; the...

Kemp Dolliver, CFA

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