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

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<a href="https://www.smartkarma.com/entities/linkdoc-technology-limited" target="_blank" data-smartkarma-citation="entities:33499:1" rel="noopener">LinkDoc (LDOC US)</a> is a Chinese healthtech company. LinkDoc consists of LinkCare, a digital care platform for patients with critical diseases, LinkData, an AI-enabled curation system for longitudinal medical data, and LinkSolutions, a data-driven precision life sciences solution platform that helps life sciences companies accelerate clinical research and real-world adoption.</div><div></div><p>LinkDoc is backed by Temasek (11.7% of outstanding shares), NEA Partners (10.2%), China Broadband Capital (9.2%), <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a> (8.4%) and MBK Partners (6.3%).</p><div><p>At the mid-point of the proposed IPO price range of $17.50-19.50 per ADS, LinkDoc will have a market cap of $1.6 billion. At the mid-point of the IPO price range, the net proceeds are $182.7 million, below the rumoured $500 million raise target. LinkDoc has received $115 million indications of interest (57.4% of the ADSs being offered) from existing shareholders (Alibaba Health, Lake Bleu, Temasek) worth $60 million and new investors (UBS Asset Management, Hudson Bay, Sage Partners) worth $55 million. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/linkdoc-technology-ipo-initiation-building-with-big-data" target="_blank" data-smartkarma-citation="insights:53384" rel="noopener">LinkDoc Technology IPO Initiation: Building with Big Data</a>, we opined that LinkDoc is a play on China’s healthcare industry rising spend on IT and data services. LinkDoc focuses on oncology and has established the largest online oncology physician and patient engagement community in China. LinkDoc is benefiting from the trend of big data solutions adoption in healthcare by delivering solid growth and steadily reducing loss margins. Overall, we believe that LinkDoc is an attractive play on these market dynamics.</p></div><div>
<div class="content-highlight"><p>Our relative valuation analysis suggests that LinkDoc is fairly valued at the low-end of the IPO price range. Consequently, we are inclined to sit on the sidelines awaiting a more attractive entry point.   </p></div>
<div><p><strong><em>For readers interested in IPOs of upcoming healthtech companies, we highlight: </em></strong></p></div>
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<p><a href="https://www.smartkarma.com/insights/medlive-technology-ipo-initiation-what-s-up-doc" target="_blank" data-smartkarma-citation="insights:53683" rel="noopener">Medlive Technology IPO Initiation: What's Up, Doc?</a> </p>
<p><a href="https://www.smartkarma.com/insights/medlive-technology-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:53879" rel="noopener">Medlive Technology IPO: Valuation Insights</a> </p>
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<div><p><a href="https://www.smartkarma.com/insights/we-doctor-ipo-initiation-patient-revolution" target="_blank" data-smartkarma-citation="insights:50009" rel="noopener">We Doctor IPO Initiation: Patient Revolution</a> </p></div>
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LinkDoc (LDOC US) is a Chinese healthtech company. LinkDoc consists of LinkCare, a digital care platform for patients with critical diseases, LinkData, an AI-enabled curation system for longitudinal medical data, and LinkSolutions, a data-driven precision life sciences solution platform that helps life sciences companies accelerate clinical research and real-world adoption.LinkDoc is backed by Temasek (11.7% of outstanding shares), NEA Partners (10.2%), China Broadband Capital (9.2%), Alibaba Health Information Technology (241 HK) (8.4%) and MBK Partners (6.3%).At the mid-point of the proposed IPO price range of $17.50-19.50 per ADS, LinkDoc will have a market cap of $1.6 billion. At the mid-point of the IPO price range, the net proceeds are $182.7 million, below the rumoured $500 million raise target. LinkDoc has received $115 million indications of interest (57.4% of the ADSs being offered) from existing shareholders (Alibaba Health, Lake Bleu, Temasek) worth $60 million and new investors (UBS Asset Management, Hudson Bay, Sage Partners) worth $55 million. In LinkDoc Technology IPO Initiation: Building with Big Data, we opined that LinkDoc is a play on China’s healthcare industry rising spend on IT and data services. LinkDoc focuses on oncology and has established the largest online oncology physician and patient engagement community in China. LinkDoc is benefiting from the trend of big data solutions adoption in healthcare by delivering solid growth and steadily reducing loss margins. Overall, we believe that LinkDoc is an attractive play on these market dynamics.
Our relative valuation analysis suggests that LinkDoc is fairly valued at the low-end of the IPO price range. Consequently, we are inclined to sit on the sidelines awaiting a more attractive entry point.   
For readers interested in IPOs of upcoming healthtech companies, we highlight: 

Medlive Technology IPO Initiation: What's Up, Doc? 
Medlive Technology IPO: Valuation Insights 

We Doctor IPO Initiation: Patient Revolution 


LinkDoc Technology IPO: Valuation Insights

Medlive Technology / Equity Capital Markets

<div><p><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> is the largest online professional physician platform in China as measured by the number of registered physician users as of 31 December 2020, according to Frost &amp; Sullivan. Medlive derives most of its revenue from providing solutions that facilitate healthcare marketing to physicians. Medlive ranked first among physician platform-based digital healthcare marketing service providers in China as measured by revenue in 2020, with a 21.4% market share, according to Frost &amp; Sullivan. Medlive is a JV between <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> and Tiantian, each with 50% stakes.</p></div><div><p>At the proposed IPO price range of HK$24.10-27.20 per share, Medlive will have a market cap of HK$16,633.2-18,772.8 ($2.1-2.4 billion). At the mid-point of the IPO price range, the total net proceeds are HK$3,770.8 million ($486 million). </p></div><div><p>Seven cornerstone investors will subscribe for $220 million of the offer shares (42.93% of the offer shares at the mid-point of the IPO price). The cornerstone investors include Fidelity Management &amp; Research, FIL Investment Management, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, GIC, Matthews Funds, Qiming Venture Partners and OrbiMed Funds.</p></div><div><div>
<p>In <a href="https://www.smartkarma.com/insights/medlive-technology-ipo-initiation-what-s-up-doc" target="_blank" data-smartkarma-citation="insights:53683" rel="noopener">Medlive Technology IPO Initiation: What's Up, Doc?</a>, we stated that Medlive believes that it can compete with several players for a slice of healthcare companies’ marketing budgets due to its large and engaged physician user base, which enables it to reach a wider group of physicians more efficiently and achieve a better return on marketing spending. Medlive has strong fundamentals due to fast-paced revenue growth, rising margin and strong cash generation. We concluded that the Medlive IPO is worth a look. </p>
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<p>Arguably, the closest peer is Doximity (DOCS US), which listed on 24 June 2021. Doximity had a stonking debut with its shares trading currently 1.2x its IPO price, suggesting strong investor sentiment on the niche physician "social-networking" market monetised primarily through advertising.</p>
<p>Our base-case DCF valuation is HK$31.80 per share, which is 17% above the high-point of the IPO price range. Overall, we would participate in the IPO due to an attractive IPO price range and strong blue-chip cornerstone support.</p>
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Medlive Technology (2192 HK) is the largest online professional physician platform in China as measured by the number of registered physician users as of 31 December 2020, according to Frost &amp; Sullivan. Medlive derives most of its revenue from providing solutions that facilitate healthcare marketing to physicians. Medlive ranked first among physician platform-based digital healthcare marketing service providers in China as measured by revenue in 2020, with a 21.4% market share, according to Frost &amp; Sullivan. Medlive is a JV between M3 Inc (2413 JP) and Tiantian, each with 50% stakes.At the proposed IPO price range of HK$24.10-27.20 per share, Medlive will have a market cap of HK$16,633.2-18,772.8 ($2.1-2.4 billion). At the mid-point of the IPO price range, the total net proceeds are HK$3,770.8 million ($486 million). Seven cornerstone investors will subscribe for $220 million of the offer shares (42.93% of the offer shares at the mid-point of the IPO price). The cornerstone investors include Fidelity Management &amp; Research, FIL Investment Management, Tencent (700 HK), GIC, Matthews Funds, Qiming Venture Partners and OrbiMed Funds.
In Medlive Technology IPO Initiation: What's Up, Doc?, we stated that Medlive believes that it can compete with several players for a slice of healthcare companies’ marketing budgets due to its large and engaged physician user base, which enables it to reach a wider group of physicians more efficiently and achieve a better return on marketing spending. Medlive has strong fundamentals due to fast-paced revenue growth, rising margin and strong cash generation. We concluded that the Medlive IPO is worth a look. 

Arguably, the closest peer is Doximity (DOCS US), which listed on 24 June 2021. Doximity had a stonking debut with its shares trading currently 1.2x its IPO price, suggesting strong investor sentiment on the niche physician "social-networking" market monetised primarily through advertising.
Our base-case DCF valuation is HK$31.80 per share, which is 17% above the high-point of the IPO price range. Overall, we would participate in the IPO due to an attractive IPO price range and strong blue-chip cornerstone support.



Medlive Technology IPO: Valuation Insights

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.

<p>Medlive is the largest medical content platform for physicians in China. The company launched book building to raise up to USD 543m via a Hong Kong listing.</p><p>In our previous note, we discuss that the company has built a great user base of licensed physicians in China, which is rare among internet healthcare companies. Having said that, the monetization from its user base is low. While the near term revenue growth will still come from healthcare marketing services, the company is expanding into the digital chronic disease management segment which is still an underpenetrated market but it is in an infant stage of development without much of a track record. The company has robust financials but the size is small compared to other internet healthcare players. The company's management team is just OK. Given that it is profitable and the main shareholder M3 is listed, there weren't many rounds of capital raising and hence it lacks pre-IPO investors. </p><p>In this note, we provide an update for the book building. We think there's valuation upside from both existing businesses and new business.</p>

Medlive is the largest medical content platform for physicians in China. The company launched book building to raise up to USD 543m via a Hong Kong listing.In our previous note, we discuss that the company has built a great user base of licensed physicians in China, which is rare among internet healthcare companies. Having said that, the monetization from its user base is low. While the near term revenue growth will still come from healthcare marketing services, the company is expanding into the digital chronic disease management segment which is still an underpenetrated market but it is in an infant stage of development without much of a track record. The company has robust financials but the size is small compared to other internet healthcare players. The company's management team is just OK. Given that it is profitable and the main shareholder M3 is listed, there weren't many rounds of capital raising and hence it lacks pre-IPO investors. In this note, we provide an update for the book building. We think there's valuation upside from both existing businesses and new business.

Medlive (医脉通) IPO: Candidate for Multi-Bagger

<p><a href="https://www.smartkarma.com/entities/medlive-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32985:1" rel="noopener">Medlive Technology (MLT HK)</a> is the largest online professional physician platform in China as measured by the number of registered physician users as of 31 December 2020, according to Frost &amp; Sullivan. Medlive derives most of its revenue from providing solutions that facilitate healthcare marketing to physicians. Medlive ranked first among physician platform-based digital healthcare marketing service providers in China as measured by revenue in 2020, with a 21.4% market share, according to Frost &amp; Sullivan. Medlive is pre-marketing an HKEx IPO to raise around $500 million, according to press reports.</p><p>Medlive is a JV between <a href="https://www.smartkarma.com/entities/m3-inc" target="_blank" data-smartkarma-citation="entities:13316:1" rel="noopener">M3 Inc (2413 JP)</a> and Tiantian, each with 50% stakes. Medlive has been a consolidated subsidiary of M3, with M3 holding the right to nominate the majority of Medlive directors, but M3 will forego this right upon Medlive's listing. Also, upon listing, M3 will be deconsolidated (equity-method affiliate) from M3 financials. </p><p>Digital healthcare marketing service providers focus on various aspects of the digital healthcare marketing market and have competitive advantages in different areas. For example, internet hospitals and pharmaceutical e-commerce platforms, such as <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>, have large consumer user bases for advertising and selling non-prescription drugs. Medlive believes that it can compete with these players for a slice of healthcare companies’ marketing budgets due to its large and engaged physician user base, which enables it to reach a wider group of physicians more efficiently and achieve a better return on marketing spending. </p><div class="content-highlight"><p>Medlive has strong fundamentals due to fast-paced revenue growth, rising margin and strong cash generation. Overall, we believe that the Medlive IPO is worth a look. </p></div><p><strong><em>For readers interested in IPOs of upcoming healthtech companies, we highlight:</em></strong> </p><p><a href="https://www.smartkarma.com/insights/linkdoc-technology-ipo-initiation-building-with-big-data" target="_blank" data-smartkarma-citation="insights:53384" rel="noopener">LinkDoc Technology IPO Initiation: Building with Big Data</a> </p><p><a href="https://www.smartkarma.com/insights/we-doctor-ipo-initiation-patient-revolution" target="_blank" data-smartkarma-citation="insights:50009" rel="noopener">We Doctor IPO Initiation: Patient Revolution</a> </p>

Medlive Technology (MLT HK) is the largest online professional physician platform in China as measured by the number of registered physician users as of 31 December 2020, according to Frost &amp; Sullivan. Medlive derives most of its revenue from providing solutions that facilitate healthcare marketing to physicians. Medlive ranked first among physician platform-based digital healthcare marketing service providers in China as measured by revenue in 2020, with a 21.4% market share, according to Frost &amp; Sullivan. Medlive is pre-marketing an HKEx IPO to raise around $500 million, according to press reports.Medlive is a JV between M3 Inc (2413 JP) and Tiantian, each with 50% stakes. Medlive has been a consolidated subsidiary of M3, with M3 holding the right to nominate the majority of Medlive directors, but M3 will forego this right upon Medlive's listing. Also, upon listing, M3 will be deconsolidated (equity-method affiliate) from M3 financials. Digital healthcare marketing service providers focus on various aspects of the digital healthcare marketing market and have competitive advantages in different areas. For example, internet hospitals and pharmaceutical e-commerce platforms, such as Ping An Healthcare and Technology Company Limited (1833 HK) and JD Health (6618 HK), have large consumer user bases for advertising and selling non-prescription drugs. Medlive believes that it can compete with these players for a slice of healthcare companies’ marketing budgets due to its large and engaged physician user base, which enables it to reach a wider group of physicians more efficiently and achieve a better return on marketing spending. Medlive has strong fundamentals due to fast-paced revenue growth, rising margin and strong cash generation. Overall, we believe that the Medlive IPO is worth a look. For readers interested in IPOs of upcoming healthtech companies, we highlight: LinkDoc Technology IPO Initiation: Building with Big Data We Doctor IPO Initiation: Patient Revolution 

Medlive Technology IPO Initiation: What's Up, Doc?

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<p><strong><em>*New IPO Disappoints Right Out Of Gate: </em></strong>Waterdrop (WDH.US) [Waterdrop] provides an online insurance marketplace and related medical crowdfunding platform in mainland China. Waterdrop  reported its first set of earnings results since its IPO, coming in at a negative CNY 370.2 bn for 1Q21, declining CNY 249.4 (206.6%) YOY largely given its higher costs from a channel (third party traffic) and product mix shift to long-term insurance. Both factors have caused operating costs to increase CNY 579.1 bn (75.7%) YOY  - far outpacing revenue growth of CNY 229.6 bn (35.1%) over the period; and  </p><p><strong><em>*All Is Not Lost…Yet: </em></strong>First year premium (FYP) did increase 42.7% YOY – led by costly third party FYP which increased 51.6%. Long-term critical illness insurance grew 132% off of a low base, but still well exceeding industry average. Anecdotally, management believes that competitive pressures appear to be abating and that increases in customer acquisition costs is now decelerating. In addition, Waterdrop continues to make progress with: Waterdrop Health; Waterdrop Medicine; and with outpatient services.</p>

*New IPO Disappoints Right Out Of Gate: Waterdrop (WDH.US) [Waterdrop] provides an online insurance marketplace and related medical crowdfunding platform in mainland China. Waterdrop  reported its first set of earnings results since its IPO, coming in at a negative CNY 370.2 bn for 1Q21, declining CNY 249.4 (206.6%) YOY largely given its higher costs from a channel (third party traffic) and product mix shift to long-term insurance. Both factors have caused operating costs to increase CNY 579.1 bn (75.7%) YOY  - far outpacing revenue growth of CNY 229.6 bn (35.1%) over the period; and  *All Is Not Lost…Yet: First year premium (FYP) did increase 42.7% YOY – led by costly third party FYP which increased 51.6%. Long-term critical illness insurance grew 132% off of a low base, but still well exceeding industry average. Anecdotally, management believes that competitive pressures appear to be abating and that increases in customer acquisition costs is now decelerating. In addition, Waterdrop continues to make progress with: Waterdrop Health; Waterdrop Medicine; and with outpatient services.

China

Ping An Healthcare and Technology Company Limited provides health care software solutions. The Company offers mobile platform for online consultation, hospital referral and appointment, health management, and wellness interaction services, as well as connects consumers and patients with health care resources. Ping An Healthcare and Technology serves customers in China.

Ping An Healthcare and Technology (1833 HK)

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Ping An Healthcare and Technology (1833 HK)

LinkDoc Technology IPO: Valuation Insights

Our valuation analysis suggests that LinkDoc is fairly valued at the low-end of the IPO price range. Consequently, we are inclined to sit on the...

Arun George

Medlive Technology IPO: Valuation Insights

Our base-case DCF valuation is HK$31.80 per share. Overall, we would participate in the IPO due to an attractive price range and strong blue-chip...

Arun George

Medlive (医脉通) IPO: Candidate for Multi-Bagger

We look at the deal term of Medlive IPO and provide an update for the book building. We think there's substantial upside from both its existing...

Ke Yan, CFA, FRM

Medlive Technology IPO Initiation: What's Up, Doc?

Medlive is pre-marketing an HKEx IPO to raise around $500 million, according to press reports. The fundamentals are strong due to fast-paced...

Arun George

Waterdrop – Water Fall

WATERDROP: Waterdrop reported its first set of earnings results since its IPO, declining 206.6% YOY largely due to higher costs from a channel and...

Thomas J. Monaco

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