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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 28th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the outflows to be USD 65.0 million and highlight flows for Kuaishou Technology, Tencent, HSBC.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of July 28th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the outflows to be USD 65.0 million and highlight flows for Kuaishou Technology, Tencent, HSBC.


Hong Kong Connect Flows (Jul 28th): Kuaishou Technology, Tencent, HSBC

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

MicroPort Cardiac Rhythm Management / Equity Capital Markets

<ul>
<li>MicroPort CRM got into CRM device field with global layout mainly through M&amp;A. However, revenue growth in the past three years was unsatisfactory and losses were increasing year by year.</li>
<li>The situation where Boston Scientific/Medtronic/Abbott dominate CRM device overseas markets wouldn’t change. Although China market has big potential theoretically, the actual space remains to be seen due to various challenges.</li>
<li>This IPO application could be aimed at achieving the terms of redemption agreement. Even MicroPort CRM is not in good shape, it is still better than Microport’s other listed subsidiaries.  </li>
</ul>


MicroPort CRM got into CRM device field with global layout mainly through M&amp;A. However, revenue growth in the past three years was unsatisfactory and losses were increasing year by year.
The situation where Boston Scientific/Medtronic/Abbott dominate CRM device overseas markets wouldn’t change. Although China market has big potential theoretically, the actual space remains to be seen due to various challenges.
This IPO application could be aimed at achieving the terms of redemption agreement. Even MicroPort CRM is not in good shape, it is still better than Microport’s other listed subsidiaries.  


Pre IPO MicroPort Cardiac Rhythm Management - The Industry, the Business and the Challenges Ahead

Equity Bottom-Up

Microport Cardioflow Medtech / Equity Bottom-Up

<ul>
<li>TAVR was once envisioned with infinite optimism as a "hundred billion yuan market", attracting massive amounts of capital/companies to enter. However, the commercialization status of TAVR companies is much bleak.</li>
<li>High cost of TAVR surgery without medical insurance reimbursement and limited number of qualified hospitals to carry out such complicated surgery are the major reasons for the unsatisfactory sales growth. </li>
<li>Venus Medtech's market share would continue to be challenged. MicroPort CardioFlow's low gross margin and slow product iteration are the problems. Peijia could be “dark horse” if positive momentum continues. </li>
</ul>


TAVR was once envisioned with infinite optimism as a "hundred billion yuan market", attracting massive amounts of capital/companies to enter. However, the commercialization status of TAVR companies is much bleak.
High cost of TAVR surgery without medical insurance reimbursement and limited number of qualified hospitals to carry out such complicated surgery are the major reasons for the unsatisfactory sales growth. 
Venus Medtech's market share would continue to be challenged. MicroPort CardioFlow's low gross margin and slow product iteration are the problems. Peijia could be “dark horse” if positive momentum continues. 


CardioFlow (2160.HK) Vs Venus MedTech (2500.HK) Vs Peijia Medical (9996.HK) - Dark Horse Is Emerging

Thematic (Sector/Industry)

<ul>
<li>China unveiled the "No. 1 central document", providing a good opportunity for domestic healthcare enterprises to develop rural medical market - Its market size cannot be ignored.</li>
<li>The 8th national VBP has been officially launched last week. Pfizer is the most affected of all foreign big pharma, which would have certain impact on its China business. </li>
<li>We have noticed that the unified medical insurance code of traditional Chinese medicine (TCM) formula granules is accelerating, which seems to be paving the way for the future VBP.</li>
</ul>


China unveiled the "No. 1 central document", providing a good opportunity for domestic healthcare enterprises to develop rural medical market - Its market size cannot be ignored.
The 8th national VBP has been officially launched last week. Pfizer is the most affected of all foreign big pharma, which would have certain impact on its China business. 
We have noticed that the unified medical insurance code of traditional Chinese medicine (TCM) formula granules is accelerating, which seems to be paving the way for the future VBP.


China Healthcare Weekly (Feb.24) - No. 1 Central Document, 8th National VBP, TCM Formula Granules

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

Acotec Scientific Holdings / Event-Driven

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a>’s partial offer from <a href="https://www.smartkarma.com/entities/boston-scientific-corp" target="_blank" data-smartkarma-citation="entities:11115:1" rel="noopener">Boston Scientific (BSX US)</a> at HK$20 per share is now unconditional. The final closing date is 9 February.</li>
<li>The current acceptances representing 78.59% of outstanding shares imply current proration is 82.71%. Current pro-ration suggests CA Medtech post-offer shares will be counted towards the public float.</li>
<li>Based on the current proration of 82.71% and at the last close price of HK$19.78 per share, the breakeven price is HK$19.00 per share. </li>
</ul>


As expected, Acotec Scientific Holdings (6669 HK)’s partial offer from Boston Scientific (BSX US) at HK$20 per share is now unconditional. The final closing date is 9 February.
The current acceptances representing 78.59% of outstanding shares imply current proration is 82.71%. Current pro-ration suggests CA Medtech post-offer shares will be counted towards the public float.
Based on the current proration of 82.71% and at the last close price of HK$19.78 per share, the breakeven price is HK$19.00 per share. 


Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Unconditional

China

Microport Cardioflow Medtech Corporation develops and sells medical devices. The Company manufactures and sells vitaflow aortic valve system, alwide balloon catheter, and other products. Microport Cardioflow Medtech markets its products throughout China.

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Microport Cardioflow Medtech (2160 HK)

Hong Kong Connect Flows (Jul 28th): Kuaishou Technology, Tencent, HSBC

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for Kuaishou Technology, Tencent, HSBC.

Ke Yan, CFA, FRM

Pre IPO MicroPort Cardiac Rhythm Management - The Industry, the Business and the Challenges Ahead

MicroPort CRM's' business layout mainly comes from the acquisition of LivaNova, but it's hard to achieve breakthrough in market share. The Company...

Xinyao (Criss) Wang

CardioFlow (2160.HK) Vs Venus MedTech (2500.HK) Vs Peijia Medical (9996.HK) - Dark Horse Is Emerging

After four years of anticipation, the golden age of TAVR still has not arrived. Although there are common industry pain points, CardioFlow/Venus...

Xinyao (Criss) Wang

China Healthcare Weekly (Feb.24) - No. 1 Central Document, 8th National VBP, TCM Formula Granules

China unveiled "No. 1 central document" to enhance the development of rural medical market. The 8th national VBP is coming. Pfizer is under heavy...

Xinyao (Criss) Wang

Acotec (6669 HK): Boston Scientific’s HK$20 Partial Offer Unconditional

Based on the current proration of 82.71% and at the last close price of HK$19.78 per share, the breakeven price is HK$19.00 per share.

Arun George

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