Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<div class="content-highlight"><a href="https://www.smartkarma.com/entities/sd-biosensor-inc" target="_blank" data-smartkarma-citation="entities:33333:1" rel="noopener">SD Biosensor (SDBIOZ KS)</a> is getting ready for an IPO in Korea next month. SD Biosensor will be one of the largest IPOs in Korea in 2021. The IPO price range is from 66,000 won to 85,000 won. At the high end of the IPO price range, the company will raise 1.3 trillion won. The bookbuilding for the institutional investors starts on 10 June. According to the bankers' valuation, at the high end of the IPO price range, the company would be valued at 8.9 trillion won ($7.9 billion). The lead underwriters of this IPO include NH Investment &amp; Securities and Korea Investment &amp; Securities. </div>Established in 2010, SD Biosensor is a bio-diagnostic company that provides in vitro diagnostic products. This is one of the biggest companies in Korea in the field of in-vitro diagnostic products. According to the company, it exported <a href="https://www.edaily.co.kr/news/read?newsId=03634246629015792&amp;mediaCodeNo=257&amp;OutLnkChk=Y" target="_blank" rel="noopener">400 million COVID-19 diagnostic kit</a> related products from 2020 to January 2021.The company's sales surged from 73 billion won in 2019 to 1,686.2 billion won in 2020. Operating profit also jumped from 1.5 billion won in 2019 to 738.3 billion won in 2020.<table class="table table-striped">
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<td style="width: 212pt;">Deal Specifics of the SD Bioscience IPO:</td>
<td style="width: 409pt;"> </td>
</tr>
<tr>
<td>Lead underwriters of the IPO: </td>
<td style="width: 409pt;">NH Investment &amp; Securities, Korea Investment &amp; Securities</td>
</tr>
<tr>
<td>Expected IPO price per share: </td>
<td style="width: 409pt;">66,000 won (low)/85,000 won (high)</td>
</tr>
<tr>
<td>Number of Shares for IPO:</td>
<td style="width: 409pt;">15.55m shares (10.37m new shares; 5.18m old shares)</td>
</tr>
<tr>
<td>IPO base deal size: </td>
<td style="width: 409pt;">US$908m (low);  US$1,170m (high)</td>
</tr>
<tr>
<td>Expected common shares outstanding, fully diluted (post-IPO):  </td>
<td style="width: 409pt;">104.89m shares</td>
</tr>
<tr>
<td>Expected market cap after IPO:</td>
<td style="width: 409pt;">6,923 billion won (low)/8,916 billion won (high)</td>
</tr>
<tr>
<td>Book open: </td>
<td style="text-align: left; width: 409pt;">10-Jun-21</td>
</tr>
<tr>
<td>Book closed:</td>
<td style="text-align: left; width: 409pt;">11-Jun-21</td>
</tr>
<tr>
<td>Listing date: </td>
<td style="text-align: left; width: 409pt;">TBD</td>
</tr>
<tr>
<td>Source: Company data</td>
<td style="width: 409pt;"> </td>
</tr>
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</table>

SD Biosensor (SDBIOZ KS) is getting ready for an IPO in Korea next month. SD Biosensor will be one of the largest IPOs in Korea in 2021. The IPO price range is from 66,000 won to 85,000 won. At the high end of the IPO price range, the company will raise 1.3 trillion won. The bookbuilding for the institutional investors starts on 10 June. According to the bankers' valuation, at the high end of the IPO price range, the company would be valued at 8.9 trillion won ($7.9 billion). The lead underwriters of this IPO include NH Investment &amp; Securities and Korea Investment &amp; Securities. Established in 2010, SD Biosensor is a bio-diagnostic company that provides in vitro diagnostic products. This is one of the biggest companies in Korea in the field of in-vitro diagnostic products. According to the company, it exported 400 million COVID-19 diagnostic kit related products from 2020 to January 2021.The company's sales surged from 73 billion won in 2019 to 1,686.2 billion won in 2020. Operating profit also jumped from 1.5 billion won in 2019 to 738.3 billion won in 2020.






Deal Specifics of the SD Bioscience IPO:
 


Lead underwriters of the IPO: 
NH Investment &amp; Securities, Korea Investment &amp; Securities


Expected IPO price per share: 
66,000 won (low)/85,000 won (high)


Number of Shares for IPO:
15.55m shares (10.37m new shares; 5.18m old shares)


IPO base deal size: 
US$908m (low);  US$1,170m (high)


Expected common shares outstanding, fully diluted (post-IPO):  
104.89m shares


Expected market cap after IPO:
6,923 billion won (low)/8,916 billion won (high)


Book open: 
10-Jun-21


Book closed:
11-Jun-21


Listing date: 
TBD


Source: Company data
 




Alpha-Centric ESG Research

Kyle Rudden

The Biden-Harris administration recently announced four "Day One" priorities, the first of which is their COVID-19 response plan. COVID-19 response is first, because it is a prerequisite to economic recovery, which is the second of their four "Day One" priorities.Several investment themes are inherent in Biden's COVID-19 plan, some more direct and obvious than others. This Insight overviews more significant themes and their most representative stocks, in three sections (the first two will be expanded on in separate upcoming reports):<ol>
<li>
COVID-19 Testing: Testing is the largest, most tangible, nearest-term investment opportunity created by Biden's plan. An estimated US$75-100 billion for testing could be windfall for certain stocks, but not all. Selectivity is key, and timing is critical (related to vaccine development).</li>
<li>
Vaccine Delivery: Biden's plan emphasises vaccine manufacturing and delivery, versus vaccine development (Trump had allocated <a href="https://www.hhs.gov/coronavirus/explaining-operation-warp-speed/index.html" target="_blank" rel="noopener">billions</a> to vaccine development companies). Some might go to big pharma companies for M&amp;D, but most should benefit other "cold chain" stocks.</li>
<li>
PPE Supply/Other: PPE manufacturing, of course, but that is largely old news. I will address it, but do so along with other more interesting collateral themes. For example, retail drugs chains, elder-care, medical technologies, and a few other related industries.</li>
</ol>

The Biden-Harris administration recently announced four "Day One" priorities, the first of which is their COVID-19 response plan. COVID-19 response is first, because it is a prerequisite to economic recovery, which is the second of their four "Day One" priorities.Several investment themes are inherent in Biden's COVID-19 plan, some more direct and obvious than others. This Insight overviews more significant themes and their most representative stocks, in three sections (the first two will be expanded on in separate upcoming reports):

COVID-19 Testing: Testing is the largest, most tangible, nearest-term investment opportunity created by Biden's plan. An estimated US$75-100 billion for testing could be windfall for certain stocks, but not all. Selectivity is key, and timing is critical (related to vaccine development).

Vaccine Delivery: Biden's plan emphasises vaccine manufacturing and delivery, versus vaccine development (Trump had allocated billions to vaccine development companies). Some might go to big pharma companies for M&amp;D, but most should benefit other "cold chain" stocks.

PPE Supply/Other: PPE manufacturing, of course, but that is largely old news. I will address it, but do so along with other more interesting collateral themes. For example, retail drugs chains, elder-care, medical technologies, and a few other related industries.


Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

The genetic testing industry in China is like a rising star – the favorable policy of precision medicine, the increasing industry scale and the long-term optimism about the growth potential from Chinese private equity firms and venture capitals have indicated tremendous opportunities.

The genetic testing industry in China is like a rising star – the favorable policy of precision medicine, the increasing industry scale and the long-term optimism about the growth potential from Chinese private equity firms and venture capitals have indicated tremendous opportunities.  

Insights on China Genetic Testing Industry

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

STOXX will announce the results of the September review of the DAX indices on 3 September post market close. The constituent changes will be effective from the close of trading on 18 September and passive funds indexed to the DAX will need to trade at the time.STOXX has clearly flagged <a href="https://www.smartkarma.com/entities/wirecard-ag" target="_blank" data-smartkarma-citation="entities:21743:1" rel="noopener">Wirecard AG (WDI GR)</a> as not eligible for index membership and the stock will be deleted. We see <a href="https://www.smartkarma.com/entities/delivery-hero-ag" target="_blank" data-smartkarma-citation="entities:24416:1" rel="noopener">Delivery Hero Ag (DHER GY)</a> as a high probability addition replacing <a href="https://www.smartkarma.com/entities/wirecard-ag" target="_blank" data-smartkarma-citation="entities:21743:1" rel="noopener">Wirecard AG (WDI GR)</a>. The change could happen as soon as 21 August if the STOXX consultation on deleting companies that have filed for insolvency immediately gets enough support (which it most probably will). The results of the consultation should be announced later today.We also see a high probability of <a href="https://www.smartkarma.com/entities/covestro-ag" target="_blank" data-smartkarma-citation="entities:21574:1" rel="noopener">Covestro AG (1COV GR)</a> being deleted from the DAX, but it could still remain in the index if <a href="https://www.smartkarma.com/entities/thermo-fisher-scientific-inc" target="_blank" data-smartkarma-citation="entities:7375:1" rel="noopener">Thermo Fisher Scientific Inc (TMO US)</a>'s tender offer for <a href="https://www.smartkarma.com/entities/qiagen-nv" target="_blank" data-smartkarma-citation="entities:26865:1" rel="noopener">QIAGEN NV (QIA GY)</a> is successful. Results of the tender off will be announced 13 August or soon after.

STOXX will announce the results of the September review of the DAX indices on 3 September post market close. The constituent changes will be effective from the close of trading on 18 September and passive funds indexed to the DAX will need to trade at the time.STOXX has clearly flagged Wirecard AG (WDI GR) as not eligible for index membership and the stock will be deleted. We see Delivery Hero Ag (DHER GY) as a high probability addition replacing Wirecard AG (WDI GR). The change could happen as soon as 21 August if the STOXX consultation on deleting companies that have filed for insolvency immediately gets enough support (which it most probably will). The results of the consultation should be announced later today.We also see a high probability of Covestro AG (1COV GR) being deleted from the DAX, but it could still remain in the index if Thermo Fisher Scientific Inc (TMO US)'s tender offer for QIAGEN NV (QIA GY) is successful. Results of the tender off will be announced 13 August or soon after.

DAX Index Rebalance Preview - Delivery Hero an Inclusion Shoo-In, Covestro Is at Risk

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

This is the largest healthcare sector M&amp;A Deal announced so far in 2020. Earlier this year, in March, <a href="https://www.smartkarma.com/entities/thermo-fisher-scientific-inc" target="_blank" data-smartkarma-citation="entities:7375:1" rel="noopener">Thermo Fisher Scientific Inc (TMO US)</a> agreed to acquire <a href="https://www.smartkarma.com/entities/qiagen-nv" target="_blank" data-smartkarma-citation="entities:26865:1" rel="noopener">QIAGEN NV (QIA GY)</a> in a deal that originally valued the company at an EV of ~US$11bn. Last month, the Offer <a href="https://corporate.qiagen.com/newsroom/press-releases/2020/20200716_amended_offer" target="_blank" rel="noopener">was bumped</a> from the original offer price of €39.00 to €43.00 and the minimum acceptance threshold was reduced from 75% to 66.67%. Although the COVID-19 pandemic resulted in a slowdown in Deals in the early part of the year, M&amp;A activity in the medical devices space seems to be picking up again.More recently, on 2nd August 2020, Germany-based medtech company <a href="https://www.smartkarma.com/entities/siemens-healthineers-ag" target="_blank" data-smartkarma-citation="entities:29221:1" rel="noopener">Siemens Healthineers AG (SHL GR)</a> announced they would acquire US-based medical-devices maker <a href="https://www.smartkarma.com/entities/varian-medical-systems-inc" target="_blank" data-smartkarma-citation="entities:7308:1" rel="noopener">Varian Medical Systems (VAR US)</a> in an all-cash deal that valued the company at ~US$16.4bn. The Deal is conditional on the receipt of Varian shareholder approval and regulatory approvals. The Offer Price is $177.50 per share and the transaction is expected to close in the first half of calendar year 2021. As always, there is more below the fold.

This is the largest healthcare sector M&amp;A Deal announced so far in 2020. Earlier this year, in March, Thermo Fisher Scientific Inc (TMO US) agreed to acquire QIAGEN NV (QIA GY) in a deal that originally valued the company at an EV of ~US$11bn. Last month, the Offer was bumped from the original offer price of €39.00 to €43.00 and the minimum acceptance threshold was reduced from 75% to 66.67%. Although the COVID-19 pandemic resulted in a slowdown in Deals in the early part of the year, M&amp;A activity in the medical devices space seems to be picking up again.More recently, on 2nd August 2020, Germany-based medtech company Siemens Healthineers AG (SHL GR) announced they would acquire US-based medical-devices maker Varian Medical Systems (VAR US) in an all-cash deal that valued the company at ~US$16.4bn. The Deal is conditional on the receipt of Varian shareholder approval and regulatory approvals. The Offer Price is $177.50 per share and the transaction is expected to close in the first half of calendar year 2021. As always, there is more below the fold. 

Varian-Siemens Deal: DAX Promotion on the Cards for the Acquirer

United States

Thermo Fisher Scientific, Inc. manufactures scientific instruments, consumables, and chemicals. The Company offers analytical instruments, laboratory equipment, software, services, consumables, reagents, chemicals, and supplies to pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions, and government agencies.

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Thermo Fisher Scientific (TMO UN)

SD Biosensor IPO Preview

SD Biosensor is one of the biggest companies in Korea in the field of in-vitro diagnostic products.At the high end of the IPO price range, the...

Douglas Kim

Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes

Biden's recently-announced COVID-19 response plan suggests a number of investment themes. This Insight overviews the more significant of those...

Kyle Rudden

Insights on China Genetic Testing Industry

This article analyzed China genetic testing industry in the perspective of favorable policy, market potential, future trend, investment trend in...

Xinyao (Criss) Wang

DAX Index Rebalance Preview - Delivery Hero an Inclusion Shoo-In, Covestro Is at Risk

STOXX will announce the results of the September review of the DAX indices on 3 September post market close. The constituent changes will be...

Brian Freitas

Varian-Siemens Deal: DAX Promotion on the Cards for the Acquirer

This is the largest healthcare sector M&A Deal announced so far in 2020. Earlier this year, in March, Thermo Fisher Scientific Inc (TMO US)...

Janaghan Jeyakumar, CFA

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