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

Shanghai HeartCare Medical Technology / Equity Capital Markets

<div><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 (6609 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></div><div><p>HeartCare has launched an HKEx IPO to raise net proceeds of HK$980.6 million ($126 million) at the mid-point of the IPO price range of HK$160.00-171.00 per share. Ten cornerstone investors will subscribe for $66 million worth of the offer shares (46.96% of the offer shares at the mid-point). Pricing will be finalised on 13 August and the shares will list on 20 August.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/shanghai-heartcare-medical-ipo-initiation-surviving-strokes" target="_blank" data-smartkarma-citation="insights:50331" rel="noopener">Shanghai HeartCare Medical IPO Initiation: Surviving Strokes</a>, we opined that 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 was commercialised in April 2021. 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. We concluded that HeartCare’s product portfolio is attractive.  </p></div><div><div>
<p>HeartCare is braving the moribund IPO market for Chinese stocks by seeking to raise a lower amount than the original target of a $300 million raise. Despite the sell-off on Chinese names, <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>, a peer, is trading 9% above its IPO price (listed 5 July 2021), suggesting that sentiment on the Chinese medical devices sector remains positive.  </p>
<div class="content-highlight"><p>Our base-case DCF valuation is HK$186.51 per share, which is a 13% upside to the mid-point of the IPO price range of HK$160.00-171.00 per share. Consequently, we would participate in the IPO. </p></div>
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Shanghai HeartCare Medical Technology (6609 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.HeartCare has launched an HKEx IPO to raise net proceeds of HK$980.6 million ($126 million) at the mid-point of the IPO price range of HK$160.00-171.00 per share. Ten cornerstone investors will subscribe for $66 million worth of the offer shares (46.96% of the offer shares at the mid-point). Pricing will be finalised on 13 August and the shares will list on 20 August.In Shanghai HeartCare Medical IPO Initiation: Surviving Strokes, we opined that 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 was commercialised in April 2021. 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. We concluded that HeartCare’s product portfolio is attractive.  
HeartCare is braving the moribund IPO market for Chinese stocks by seeking to raise a lower amount than the original target of a $300 million raise. Despite the sell-off on Chinese names, Zylox-Tonbridge Medical Technology (2190 HK), a peer, is trading 9% above its IPO price (listed 5 July 2021), suggesting that sentiment on the Chinese medical devices sector remains positive.  
Our base-case DCF valuation is HK$186.51 per share, which is a 13% upside to the mid-point of the IPO price range of HK$160.00-171.00 per share. Consequently, we would participate in the IPO. 


Shanghai HeartCare Medical IPO: Valuation Insights

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Shanghai Ark Biopharmaceutical / Equity Capital Markets

<p>In the era of excessive competition of anti-tumor drugs, many enterprises began to make layout in other fields such as ophthalmologic drugs, respiratory drugs, dermatologic drugs, antiviral drugs and so on. On June 29<sup>th</sup>, 2021, <a href="https://www.smartkarma.com/entities/shanghai-ark-biopharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:33766:1" rel="noopener">Shanghai Ark Biopharmaceutical (SAB HK)</a> submitted its prospectus to the HKEX and officially started its IPO process. Ark is an innovative biopharmaceutical company focused on the discovery and development of novel therapeutics addressing unmet medical needs in respiratory and lung diseases. This insight mainly analyzed the important product candidates in the pipeline and related concerns.</p>

In the era of excessive competition of anti-tumor drugs, many enterprises began to make layout in other fields such as ophthalmologic drugs, respiratory drugs, dermatologic drugs, antiviral drugs and so on. On June 29th, 2021, Shanghai Ark Biopharmaceutical (SAB HK) submitted its prospectus to the HKEX and officially started its IPO process. Ark is an innovative biopharmaceutical company focused on the discovery and development of novel therapeutics addressing unmet medical needs in respiratory and lung diseases. This insight mainly analyzed the important product candidates in the pipeline and related concerns.

Pre-IPO Shanghai Ark Biopharmaceutical - Insights on Pipeline and Related Concerns

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Back on the 10 February 2021, private hospitals and medical centers operator <a href="https://www.smartkarma.com/entities/new-frontier-health-corp" target="_blank" data-smartkarma-citation="entities:28429:1" rel="noopener">New Frontier Corporation (NFH US)</a> made an <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001737422/16f0d15b-2a3a-4ad0-9ad3-85d84f2c7485.pdf" target="_blank" rel="noopener">announcement</a> it had received a preliminary non-proposal binding letter from a buyer-group, including President Carl Wu, Carnival Investments, Vivo Capital Fund IX, Max Rising International Ltd (a company affiliated with Carl Wu) - among others.</p>
<p>The group offered to acquire shares of New Frontier for $12 in cash, a 27.9% premium to last close.</p>
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<p>New Frontier has now entered into a <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001737422/4394dbb2-ca20-48cd-9bf2-2c1f323694a6.pdf" target="_blank" rel="noopener">definitive merger agreement</a>, also at US$12/share.</p>
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<p>The merger is conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares shall be less than 10% of shares out.</p>
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<p>The announcement is silent on the buyer consortium's % holding, but I estimate it to be at least 37%.</p>
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<p>This looks pretty clean. Possible completion late 4Q21.</p>
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<p>More below the fold.</p>
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Back on the 10 February 2021, private hospitals and medical centers operator New Frontier Corporation (NFH US) made an announcement it had received a preliminary non-proposal binding letter from a buyer-group, including President Carl Wu, Carnival Investments, Vivo Capital Fund IX, Max Rising International Ltd (a company affiliated with Carl Wu) - among others.
The group offered to acquire shares of New Frontier for $12 in cash, a 27.9% premium to last close.

New Frontier has now entered into a definitive merger agreement, also at US$12/share.


The merger is conditional on an affirmative vote from shareholders representing at least two-thirds of the shares out, and that the aggregate quantity of dissenting shares shall be less than 10% of shares out.


The announcement is silent on the buyer consortium's % holding, but I estimate it to be at least 37%.


This looks pretty clean. Possible completion late 4Q21.


More below the fold.


New Frontier (NYSE: NFH): Healthcare Homecoming

<p>On June 16, <a href="https://www.smartkarma.com/entities/abbisko-cayman-limited" target="_blank" data-smartkarma-citation="entities:33511:1" rel="noopener">Abbisko Cayman (ABB HK)</a> submitted a prospectus to the HKEX to be listed on the main board. Abbisko is a R&amp;D-driven, clinical-stage biopharmaceutical company dedicated to the discovery and development of innovative and differentiated small molecule oncology therapies, with a pipeline of 14 programs focused on oncology. This insight mainly analyzed the four important product candidates at the clinical stage (ABSK011, ABSK091, ABSK021 and ABSK081) in the pipeline.</p>

On June 16, Abbisko Cayman (ABB HK) submitted a prospectus to the HKEX to be listed on the main board. Abbisko is a R&amp;D-driven, clinical-stage biopharmaceutical company dedicated to the discovery and development of innovative and differentiated small molecule oncology therapies, with a pipeline of 14 programs focused on oncology. This insight mainly analyzed the four important product candidates at the clinical stage (ABSK011, ABSK091, ABSK021 and ABSK081) in the pipeline.

Pre-IPO Abbisko Cayman - It Still Takes Some Time for Commercialization

Equity Bottom-Up

Imeik Technology Development C / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/imeik-technology-development-co-ltd" target="_blank" data-smartkarma-citation="entities:32170:1" rel="noopener">Imeik Technology Development (300896 CH)</a> is undoubtedly one of the hottest stars in the capital market in 2021. At the beginning of 2021, its share price was once over RMB1300/share, making it the third company whose share price exceeded RMB1000/share in the history of A-share market. After that, Imeik’s share price reentered the upward trend after a period of correction. As of July 16, 2021, its share price was RMB773.19/share, with a market value of RMB167.3 billion. However, interestingly, the revenue of Imeik in 2020 was just RMB700 million and its net profit was RMB433 million. So, could Imerk support its high valuation?</p>

Imeik Technology Development (300896 CH) is undoubtedly one of the hottest stars in the capital market in 2021. At the beginning of 2021, its share price was once over RMB1300/share, making it the third company whose share price exceeded RMB1000/share in the history of A-share market. After that, Imeik’s share price reentered the upward trend after a period of correction. As of July 16, 2021, its share price was RMB773.19/share, with a market value of RMB167.3 billion. However, interestingly, the revenue of Imeik in 2020 was just RMB700 million and its net profit was RMB433 million. So, could Imerk support its high valuation?

Imeik Technology Development (300896.CH) - The Valuation Bubble?

China

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. is a pharmaceutical company. Through its subsidiaries, the Company manufactures genetic medicines, Chinese traditional medicines, diagnostic products, and medical instruments, provides technology, marketing, and advertising services, as well as invests in import and export trading.

Shanghai Fosun Pharmaceutical (Group) (600196 CH)

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Shanghai Fosun Pharmaceutical (Group) (600196 CH)

Shanghai HeartCare Medical IPO: Valuation Insights

Our base-case DCF valuation is HK$186.51 per share, which is a 13% upside to the mid-point of the IPO price range of HK$160.00-171.00 per share.

Arun George

New Frontier (NYSE: NFH): Healthcare Homecoming

I see the gross/annualised spread at 7.4%/19.8%, assuming late December completion. This looks like a pretty clean deal for around five months of...

David Blennerhassett

Pre-IPO Abbisko Cayman - It Still Takes Some Time for Commercialization

This article analyzed Abbisko in terms of its four product candidates at the clinical stage (ABSK011, ABSK091, ABSK021 and ABSK081) in the...

Xinyao (Criss) Wang

Imeik Technology Development (300896.CH) - The Valuation Bubble?

This insight mainly analyzed Imeik in terms of its hyaluronic acid product business, botulinum toxin business, other products, the future business...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Shanghai HeartCare Medical IPO: Valuation Insights

Our base-case DCF valuation is HK$186.51 per share, which is a 13% upside to the mid-point of the IPO price range of HK$160.00-171.00 per share.

Arun George

Pre-IPO Shanghai Ark Biopharmaceutical - Insights on Pipeline and Related Concerns

The article mainly analyzed Ark Biopharmaceutical in terms of the important product candidates AK0529 (ziresovir) and AK3280 that entered the...

Xinyao (Criss) Wang

New Frontier (NYSE: NFH): Healthcare Homecoming

I see the gross/annualised spread at 7.4%/19.8%, assuming late December completion. This looks like a pretty clean deal for around five months of...

David Blennerhassett

Pre-IPO Abbisko Cayman - It Still Takes Some Time for Commercialization

This article analyzed Abbisko in terms of its four product candidates at the clinical stage (ABSK011, ABSK091, ABSK021 and ABSK081) in the...

Xinyao (Criss) Wang

Imeik Technology Development (300896.CH) - The Valuation Bubble?

This insight mainly analyzed Imeik in terms of its hyaluronic acid product business, botulinum toxin business, other products, the future business...

Xinyao (Criss) Wang