Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/phc-holdings-corp" target="_blank" data-smartkarma-citation="entities:34198:1" rel="noopener">PHC Holdings (6523 JP)</a> is a diversified healthcare company, which serves ~$25 billion broader end-market, of which global glucose monitoring is the largest end-market.</li>
<li>The company’s diabetes management business is the highest margin earning segment and is poised to grow through expanding presence in continuous glucose monitoring system.</li>
<li>PHC can be an early investment idea as a passive play on the fastest growing segment of the global diabetes management segment ahead of its global launch of next-generation CGM.</li>
</ul>



PHC Holdings (6523 JP) is a diversified healthcare company, which serves ~$25 billion broader end-market, of which global glucose monitoring is the largest end-market.
The company’s diabetes management business is the highest margin earning segment and is poised to grow through expanding presence in continuous glucose monitoring system.
PHC can be an early investment idea as a passive play on the fastest growing segment of the global diabetes management segment ahead of its global launch of next-generation CGM.


PHC Holdings (6523 JP): Eyeing a Bigger Pie of Global Diabetes Management Solution

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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

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<p>PHC Holdings and its shareholders raised around US$645m, via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).</p>
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<div>We have covered the various aspects of the deal in our earlier notes:</div>
<div>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-many-companies-rolled-into-one" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Many companies rolled into one</a><a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-peer-comparison" target="_blank" rel="noopener"></a>
</li>
<li>
<a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-peer-comparison" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Peer Comparison</a> </li>
<li><a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">PHC Holdings Pre-IPO - Thoughts on Valuation, and</a></li>
<li><a href="https://www.smartkarma.com/insights/phc-holdings-ipo-should-have-cut-the-price-not-just-the-size" target="_blank" rel="noopener">PHC Holdings IPO - Should Have Cut the Price, Not Just the Size</a></li>
</ul>
<p>In this note, we will talk about the trading dynamics.</p>
</div>


PHC Holdings and its shareholders raised around US$645m, via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).

We have covered the various aspects of the deal in our earlier notes:



 PHC Holdings Pre-IPO - Many companies rolled into one


 PHC Holdings Pre-IPO - Peer Comparison 
PHC Holdings Pre-IPO - Thoughts on Valuation, and
PHC Holdings IPO - Should Have Cut the Price, Not Just the Size

In this note, we will talk about the trading dynamics.


PHC Holdings IPO Trading - Needs to Start Acting like One Company to Move Higher

<div><p>PHC Holdings and its shareholders aim to raise around US$700m, down from US$1.8bn, via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).</p></div><div><p>PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management (35% of FY21 revenue); Healthcare Services (37.9% of FY21 revenue); and Diagnosis/Life Science (26.1% of FY21 revenue).</p></div><div><p>We have covered the main aspects of the deal in our earlier notes<a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-many-companies-rolled-into-one" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Many companies rolled into one and </a><a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-peer-comparison" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Peer Comparison and</a> <a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">PHC Holdings Pre-IPO - Thoughts on Valuation</a>.</p></div><div><p>In this note we will talk about the IPO valuation.</p></div>

PHC Holdings and its shareholders aim to raise around US$700m, down from US$1.8bn, via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management (35% of FY21 revenue); Healthcare Services (37.9% of FY21 revenue); and Diagnosis/Life Science (26.1% of FY21 revenue).We have covered the main aspects of the deal in our earlier notes PHC Holdings Pre-IPO - Many companies rolled into one and  PHC Holdings Pre-IPO - Peer Comparison and PHC Holdings Pre-IPO - Thoughts on Valuation.In this note we will talk about the IPO valuation.

PHC Holdings IPO - Should Have Cut the Price, Not Just the Size

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/phc-holdings-corp" target="_blank" data-smartkarma-citation="entities:34198:1" rel="noopener">PHC Holdings (6523 JP)</a> is a leading diversified diagnostic, life sciences and medical device company serving global markets. PHC shareholders include <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> (owns 48.0% of PHC), <a href="https://www.smartkarma.com/entities/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui &amp; Co Ltd (8031 JP)</a> (21.1%), Life Science Institute (13.2%) and <a href="https://www.smartkarma.com/entities/panasonic-corp" target="_blank" data-smartkarma-citation="entities:222:1" rel="noopener">Panasonic Corp (6752 JP)</a> (11.3%).</p></div><div><p>At the indicative price of JPY3,700 per share, PHC will have a market cap of JPY452 billion (US$4.1 billion). PHC plans to raise JPY172 billion ($1.57 billion) by offering 5.8 million primary shares (JPY22 billion raise) and 40.7 million secondary shares (JPY150 billion raise). </p></div><div><div>
<p>In <a href="https://www.smartkarma.com/insights/phc-holdings-ipo-initiation-sugar-high" target="_blank" data-smartkarma-citation="insights:57915" rel="noopener">PHC Holdings IPO Initiation: Sugar High</a>, we opined that at first glance, PHC offers solid growth, stable and healthy margins along with solid cash generation. However, on an organic basis, the revenue has declined in each of the last two financial years. The strong growth in the recent first quarter was largely due to low comps and an unsustainable revenue boost from COVID-19 related products. We concluded that PHC’s fundamentals are mixed and we are inclined to watch this IPO from the sidelines.</p>
<div class="content-highlight"><p>Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the IPO. </p></div>
</div></div>

PHC Holdings (6523 JP) is a leading diversified diagnostic, life sciences and medical device company serving global markets. PHC shareholders include KKR &amp; Co Inc (KKR US) (owns 48.0% of PHC), Mitsui &amp; Co Ltd (8031 JP) (21.1%), Life Science Institute (13.2%) and Panasonic Corp (6752 JP) (11.3%).At the indicative price of JPY3,700 per share, PHC will have a market cap of JPY452 billion (US$4.1 billion). PHC plans to raise JPY172 billion ($1.57 billion) by offering 5.8 million primary shares (JPY22 billion raise) and 40.7 million secondary shares (JPY150 billion raise). 
In PHC Holdings IPO Initiation: Sugar High, we opined that at first glance, PHC offers solid growth, stable and healthy margins along with solid cash generation. However, on an organic basis, the revenue has declined in each of the last two financial years. The strong growth in the recent first quarter was largely due to low comps and an unsustainable revenue boost from COVID-19 related products. We concluded that PHC’s fundamentals are mixed and we are inclined to watch this IPO from the sidelines.
Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the IPO. 


<div><p>PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).</p></div><div><p>PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management (35% of FY21 revenue); Healthcare Services (37.9% of FY21 revenue); and Diagnosis/Life Science (26.1% of FY21 revenue).</p></div><div>
<p>We have covered the main aspects of the deal in our earlier note<a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-many-companies-rolled-into-one" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Many companies rolled into one</a>.</p>
<p>In this note we will undertake a peer comparison.</p>
</div>

PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).PHC is engaged in the development, manufacturing and sale of healthcare devices and services. The company has three main segments: Diabetes Management (35% of FY21 revenue); Healthcare Services (37.9% of FY21 revenue); and Diagnosis/Life Science (26.1% of FY21 revenue).
We have covered the main aspects of the deal in our earlier note PHC Holdings Pre-IPO - Many companies rolled into one.
In this note we will undertake a peer comparison.


Japan

NIHON KOHDEN CORPORATION develops, manufactures, and sells medical equipment, transformers, and power switches and devices.  The Company's products include testing equipment for cerebral nerve such as electroencephalographs, circulatory systems, diagnostic equipment, catheters, biogenic monitoring systems such as electrocardiographs used into patient monitoring systems.

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Nihon Kohden (6849 JP)

PHC Holdings (6523 JP): Eyeing a Bigger Pie of Global Diabetes Management Solution

Ahead of the global launch on Senseonics’ next-generation implantable CGM in Q2 2022, we are bullish on the long-term growth prospect of PHC.

Tina Banerjee

PHC Holdings IPO Trading - Needs to Start Acting like One Company to Move Higher

PHC Holdings and its shareholders raised around US$645m, via selling a mix of primary and secondary shares in its Japan IPO. In this note, we will...

Sumeet Singh

PHC Holdings IPO - Should Have Cut the Price, Not Just the Size

PHC Holdings and its shareholders aim to raise around US$700m, down from US$1.8bn, via selling a mix of primary and secondary shares in its Japan IPO.

Sumeet Singh

PHC Holdings IPO: Valuation Insights

Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the...

Arun George

PHC Holdings Pre-IPO - Peer Comparison

PHC Holdings and its shareholders aim to raise around US$1.8bn via selling a mix of primary and secondary shares in its Japan IPO. The company is...

Sumeet Singh

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