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

Gland Pharma Ltd / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/gland-pharma-ltd" target="_blank" data-smartkarma-citation="entities:29723:1" rel="noopener">Gland Pharma (7172753Z IN)</a> aims to raise around US$900m in what would be one of India’s largest IPOs in 2020. The company was established in 1978 by P.V.N. Raju. KKR invested in the company in 2014 and <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> bought a 74% stake in the company in 2017. Gland Pharma was one of the fastest growing generic injectables-focused companies by revenue in the United States from 2014 to 2019. GP sells its products primarily via a B2B model in over 60 countries, including US, Europe, Canada, Australia, and India. It also operates a B2C model in India.GP’s revenue has grown at 28.78% CAGR over FY18-20 and was up another 29.4% in 1Q21. At the same time, PAT margins have increased from 19.2% in FY18 to 34.2% in 1Q21. Thus, PAT has grown at 55.15% CAGR and was up another 70.6% in 1Q21. However, the company hasn’t provided a whole lot of details about the revenue breakdown for its products. In addition, not all the pre-IPO shareholders will be locked-up post listing.

Gland Pharma (7172753Z IN) aims to raise around US$900m in what would be one of India’s largest IPOs in 2020. The company was established in 1978 by P.V.N. Raju. KKR invested in the company in 2014 and Shanghai Fosun Pharmaceutical (Group) (2196 HK) bought a 74% stake in the company in 2017. Gland Pharma was one of the fastest growing generic injectables-focused companies by revenue in the United States from 2014 to 2019. GP sells its products primarily via a B2B model in over 60 countries, including US, Europe, Canada, Australia, and India. It also operates a B2C model in India.GP’s revenue has grown at 28.78% CAGR over FY18-20 and was up another 29.4% in 1Q21. At the same time, PAT margins have increased from 19.2% in FY18 to 34.2% in 1Q21. Thus, PAT has grown at 55.15% CAGR and was up another 70.6% in 1Q21. However, the company hasn’t provided a whole lot of details about the revenue breakdown for its products. In addition, not all the pre-IPO shareholders will be locked-up post listing.

Gland Pharma IPO - High on Growth but Low on Details

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.

<a href="https://www.smartkarma.com/entities/gland-pharma-ltd" target="_blank" data-smartkarma-citation="entities:29723:1" rel="noopener">Gland Pharma (7172753Z IN)</a> is one of the fastest-growing generic injectables-focused companies by revenue in the US from 2014 to 2019, according to IQVIA Report. Gland is backed by <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>, which acquired a 74% stake for around $1.1 billion in 2017. Gland has launched India’s biggest pharma IPO to raise as much as Rs64.5 billion ($871 million). It aims to list on 20 November. <div class="content-highlight">The injectable market enjoys high barriers to entry due to large capital investments, operational costs, manufacturing complexities, stricter compliance requirement and high-quality standards. Due to the high barriers to entry, consolidation is a theme as evidenced by Fosun’s acquisition of a majority stake in Gland. Notably, around 40% of the overall drug shortages in the US are in the injectables category, which underpins Gland’s opportunity. Overall, Gland has attractive fundamentals to capitalise on the market opportunity, in our view. </div>

Gland Pharma (7172753Z IN) is one of the fastest-growing generic injectables-focused companies by revenue in the US from 2014 to 2019, according to IQVIA Report. Gland is backed by Shanghai Fosun Pharmaceutical (Group) (2196 HK), which acquired a 74% stake for around $1.1 billion in 2017. Gland has launched India’s biggest pharma IPO to raise as much as Rs64.5 billion ($871 million). It aims to list on 20 November. The injectable market enjoys high barriers to entry due to large capital investments, operational costs, manufacturing complexities, stricter compliance requirement and high-quality standards. Due to the high barriers to entry, consolidation is a theme as evidenced by Fosun’s acquisition of a majority stake in Gland. Notably, around 40% of the overall drug shortages in the US are in the injectables category, which underpins Gland’s opportunity. Overall, Gland has attractive fundamentals to capitalise on the market opportunity, in our view. 

Gland Pharma IPO Initiation: Much Ado About Something

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

1. Industry viewpoints: 
<ul>
<li>The IVD industry in China is a great place to invest in terms of market size, industry prosperity and growth potential.</li>
<li>With the rapid aging of the population, there is an increasing need for high-quality medical and nursing care for the elderly.</li>
<li>With the gradual homogenization of China's biotechnology industry, how to seek differentiated development has become the key.</li>
</ul>
2. Company news:
News from CStone Pharmaceuticals, Reistone Biopharma, Sino Biopharm and Fosun Pharma on new licensing deals and progress on innovative drugs. 
3. Market review:
Last week, stock price for healthcare sector in A share rose 2.79%, while CSI 300 decreased 0.49% over the same period of time.   
4. Risk Disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk

1. Industry viewpoints: 

The IVD industry in China is a great place to invest in terms of market size, industry prosperity and growth potential.
With the rapid aging of the population, there is an increasing need for high-quality medical and nursing care for the elderly.
With the gradual homogenization of China's biotechnology industry, how to seek differentiated development has become the key.

2. Company news:
News from CStone Pharmaceuticals, Reistone Biopharma, Sino Biopharm and Fosun Pharma on new licensing deals and progress on innovative drugs. 
3. Market review:
Last week, stock price for healthcare sector in A share rose 2.79%, while CSI 300 decreased 0.49% over the same period of time.   
4. Risk Disclosure:
Policy risk, R&amp;D risk, Company risk and COVID-19 risk

Equity Bottom-Up

Jiangsu Hengrui Medicine / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/jiangsu-hengrui-medicine-co-ltd" target="_blank" data-smartkarma-citation="entities:14128:1" rel="noopener">Jiangsu Hengrui Medicine (600276 CH)</a> recently released the third quarter report. The Q1-Q3 accumulated revenue was RMB19.413 billion, with a YoY growth rate of 14.57%. Q1-Q3 single quarter growth rate was 11%, 14% and 17% respectively. Net income attributed to shareholders in the first three quarters was RMB4.259 billion, up 14.02% YoY. Q3 single quarter net income attributed to shareholders reached RMB1.597 billion, up 21% YoY. Q1-Q3 and Q3’s net income after deducting non-recurring gains and losses were RMB4.141 billion and RMB1.579 billion, up 17% and 27% YoY respectively. Net operating cash flow increased 53% YoY in the first three quarters. If excluding the impact of equity incentive plan, the performance in third quarter report will be even better.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/167/757/original/image_57569591631603763698845.png?1603763700" class="editor-image img-responsive" data-smartkarma-image-id="167757"></figure>Source: WIND, Hengrui’s financial report

Jiangsu Hengrui Medicine (600276 CH) recently released the third quarter report. The Q1-Q3 accumulated revenue was RMB19.413 billion, with a YoY growth rate of 14.57%. Q1-Q3 single quarter growth rate was 11%, 14% and 17% respectively. Net income attributed to shareholders in the first three quarters was RMB4.259 billion, up 14.02% YoY. Q3 single quarter net income attributed to shareholders reached RMB1.597 billion, up 21% YoY. Q1-Q3 and Q3’s net income after deducting non-recurring gains and losses were RMB4.141 billion and RMB1.579 billion, up 17% and 27% YoY respectively. Net operating cash flow increased 53% YoY in the first three quarters. If excluding the impact of equity incentive plan, the performance in third quarter report will be even better.Source: WIND, Hengrui’s financial report

Jiangsu Hengrui Medicine (600276 CH) - Q3 Performance Improved with Promising Innovative Pipeline

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Quantitative Analysis

This insight re-introduces a weekly monitor for H-Share/A-Share spreads.
The monitor will be published every weekend for the data ending the previous week. It includes all stocks where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...
<ul>
<li>H/A Discount,</li>
<li>movement in H/A Discount over 5 and 20 days,</li>
<li>a 52-week Z-score for the spread,</li>
<li>A chart showing evolution of the H/A spread over the last 20 days,</li>
<li>Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, </li>
<li>There is also a chart showing the narrowest and widest spread and the average spread over the last three years. </li>
</ul>
In the example for the H/A spreads in the Materials sector below, spreads were generally flat over the past five days and were wider by 1.5% over the past 20 days. Southbound were net buyers on average on the H side of each pair over both 5 days and 20 days. <a href="https://www.smartkarma.com/entities/shandong-gold-mining-co-ltd-61153493-5437-47ee-a8d3-aec41fb7f1da" target="_blank" data-smartkarma-citation="entities:27455:1" rel="noopener">Shandong Gold Mining Co., Ltd. (1787 HK)</a> and <a href="https://www.smartkarma.com/entities/ganfeng-lithium-co-ltd" target="_blank" data-smartkarma-citation="entities:26795:1" rel="noopener">Ganfeng Lithium (1772 HK)</a> are spreads at the relatively narrow end of their 52-week ranges, while <a href="https://www.smartkarma.com/entities/maanshan-iron-steel-h" target="_blank" data-smartkarma-citation="entities:204:1" rel="noopener">Maanshan Iron &amp; Steel H (323 HK)</a>, <a href="https://www.smartkarma.com/entities/bbmg-corp-h" target="_blank" data-smartkarma-citation="entities:2821:1" rel="noopener">BBMG Corp H (2009 HK)</a>, <a href="https://www.smartkarma.com/entities/sinopec-shanghai-petrochemical-co-ltd" target="_blank" data-smartkarma-citation="entities:17576:1" rel="noopener">Sinopec Shanghai Petrochemical (338 HK)</a>, and <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement Co Ltd H (914 HK)</a> are at the wider end of their 52-week ranges. The average spread in the sector widened somewhat dramatically in the month of August as seen on the chart, but stabilized at the beginning of September.
<section class="figure">
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/165/714/original/Screenshot%202020-10-18%20at%202.00.22%20AM.png?1602957633" class="editor-image img-responsive" data-smartkarma-image-id="165714"></figure>

</section>
</section>
Commentary is offered for the major movers and influences along with market observations on the sector rotation movement and particularly significant changes.
<div class="content-highlight">
Recommendations are in highlights like this.
</div>
<section class="figure">
More below the fold.  
<hr>
By the way, there are two versions of the Spread Evolution mini charts. Input is welcomed in the Discussion section as to which one is preferred (bars or lines).
</section>

This insight re-introduces a weekly monitor for H-Share/A-Share spreads.
The monitor will be published every weekend for the data ending the previous week. It includes all stocks where the H-Share has a 90-day average daily value-traded of US$1.0mm or more. It shows basic data per H/A spread stock by sector, with...

H/A Discount,
movement in H/A Discount over 5 and 20 days,
a 52-week Z-score for the spread,
A chart showing evolution of the H/A spread over the last 20 days,
Southbound shares held (millions of shares), Net Change in Southbound (Shanghai and Shenzhen combined) shares held by millions of shares, and contribution of Net Southbound Volume to HK-traded volume over the past five days and 20 days, 
There is also a chart showing the narrowest and widest spread and the average spread over the last three years. 

In the example for the H/A spreads in the Materials sector below, spreads were generally flat over the past five days and were wider by 1.5% over the past 20 days. Southbound were net buyers on average on the H side of each pair over both 5 days and 20 days. Shandong Gold Mining Co., Ltd. (1787 HK) and Ganfeng Lithium (1772 HK) are spreads at the relatively narrow end of their 52-week ranges, while Maanshan Iron &amp; Steel H (323 HK), BBMG Corp H (2009 HK), Sinopec Shanghai Petrochemical (338 HK), and Anhui Conch Cement Co Ltd H (914 HK) are at the wider end of their 52-week ranges. The average spread in the sector widened somewhat dramatically in the month of August as seen on the chart, but stabilized at the beginning of September.






Commentary is offered for the major movers and influences along with market observations on the sector rotation movement and particularly significant changes.

Recommendations are in highlights like this.


More below the fold.  

By the way, there are two versions of the Spread Evolution mini charts. Input is welcomed in the Discussion section as to which one is preferred (bars or lines).


Quiddity Weekly H/A: Share Spread Monitor 16 Oct 2020

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)

Price Gauge
52-week Range	0.00 - 0.00
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Shanghai Fosun Pharmaceutical (Group) (600196 CH)

Gland Pharma IPO - High on Growth but Low on Details

Gland Pharma aims to raise around US$900m in what would be one of India’s largest IPOs in 2020. Fosun Pharmaceutical bought a 74% stake in the...

Sumeet Singh

Gland Pharma IPO Initiation: Much Ado About Something

Gland has launched India’s biggest pharma IPO to raise as much as Rs64.5 billion ($871 million). Gland has attractive fundamentals to capitalise on...

Arun George

China Healthcare Weekly (Oct.30)

This article summarized major industry viewpoints, companies news and capital market review in healthcare industry in China during the week of Oct.30.

Xinyao (Criss) Wang

Jiangsu Hengrui Medicine (600276 CH) - Q3 Performance Improved with Promising Innovative Pipeline

This article analyzed Hengrui's Q3 performance, strengths in innovation, promotion and internationalization, as well as its forecast and rating.

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Gland Pharma IPO - High on Growth but Low on Details

Gland Pharma aims to raise around US$900m in what would be one of India’s largest IPOs in 2020. Fosun Pharmaceutical bought a 74% stake in the...

Sumeet Singh

Gland Pharma IPO Initiation: Much Ado About Something

Gland has launched India’s biggest pharma IPO to raise as much as Rs64.5 billion ($871 million). Gland has attractive fundamentals to capitalise on...

Arun George

China Healthcare Weekly (Oct.30)

This article summarized major industry viewpoints, companies news and capital market review in healthcare industry in China during the week of Oct.30.

Xinyao (Criss) Wang

Jiangsu Hengrui Medicine (600276 CH) - Q3 Performance Improved with Promising Innovative Pipeline

This article analyzed Hengrui's Q3 performance, strengths in innovation, promotion and internationalization, as well as its forecast and rating.

Xinyao (Criss) Wang

Quiddity Weekly H/A: Share Spread Monitor 16 Oct 2020

Weekly Monitor for H-Share/A-Share spreads showing spread/discount performance, spread Z-scores, southbound buying and selling and net activity...

Travis Lundy