HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Sinohealth Technology Holdings / Equity Capital Markets

<p>Due to the COVID-19, medical technology has once again become a hot concept, and the digital era of the healthcare industry has arrived. Meanwhile, many technology companies providing healthcare big data solutions are heading to the capital markets. On June 25, 2021, <a href="https://www.smartkarma.com/entities/sinohealth-technology-holdings-limited" target="_blank" data-smartkarma-citation="entities:33564:1" rel="noopener">Sinohealth Technology Holdings (SHT HK)</a> officially kicked off the IPO process by submitting its prospectus to the HKEX. Sinohealth is a leading technology company committed to providing big data solutions to corporate clients in China’s healthcare industry driven by big data and AI technologies. This article mainly analyzed the industry characteristics, the business and the concerns of the Company.</p>

Due to the COVID-19, medical technology has once again become a hot concept, and the digital era of the healthcare industry has arrived. Meanwhile, many technology companies providing healthcare big data solutions are heading to the capital markets. On June 25, 2021, Sinohealth Technology Holdings (SHT HK) officially kicked off the IPO process by submitting its prospectus to the HKEX. Sinohealth is a leading technology company committed to providing big data solutions to corporate clients in China’s healthcare industry driven by big data and AI technologies. This article mainly analyzed the industry characteristics, the business and the concerns of the Company.

Pre-IPO Sinohealth Technology - Solid Financial Performance Cannot Cover up the Challenges Ahead

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Last Week in Event SPACE: Capitaland, Boral, Milton/WHSP, Santos/Oil Search, Education Profit Ban

APAC IPOs & Placements

Zhen Zhou, Toh

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.

<div><p><a href="https://www.smartkarma.com/entities/yidu-tech-inc" target="_blank" data-smartkarma-citation="entities:29245:1" rel="noopener">Yidu Tech Inc (2158 HK)</a> (Yidu) IPO lock-up expired on 15th July, 2021. Earlier in January, the company raised about US$539m in its Hong Kong IPO after pricing at HK$26.30 per share, the top-end of the price range.</p></div><div><p>Yidu is a healthcare data solution provider. It leverages big data and artificial intelligence (AI) technologies and provides solutions to key healthcare participants that include mainly hospitals, pharmaceutical, biotech and medical device companies, regulators and policy makers. </p></div><div><p>Our previous coverage of the IPO:</p></div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/yidu-tech-pre-ipo-big-buzzwords" target="_blank" data-smartkarma-citation="insights:46381" rel="noopener">Yidu Tech (医渡云) Pre-IPO - Big Buzzwords</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/yidu-tech-pre-ipo-forecast-and-peer-valuation" target="_blank" data-smartkarma-citation="insights:46462" rel="noopener">Yidu Tech (医渡云) Pre-IPO - Forecast and Peer Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/yidu-tech-ipo-expensive-but-it-s-still-justifiable" target="_blank" data-smartkarma-citation="insights:46707" rel="noopener">Yidu Tech (医渡云) IPO - Expensive but It's Still Justifiable</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/yidu-tech-ipo-trading-strong-demand-points-to-good-debut" target="_blank" data-smartkarma-citation="insights:47033" rel="noopener">Yidu Tech (医渡云) IPO Trading - Strong Demand Points to Good Debut</a> </li>
</ul></div>

Yidu Tech Inc (2158 HK) (Yidu) IPO lock-up expired on 15th July, 2021. Earlier in January, the company raised about US$539m in its Hong Kong IPO after pricing at HK$26.30 per share, the top-end of the price range.Yidu is a healthcare data solution provider. It leverages big data and artificial intelligence (AI) technologies and provides solutions to key healthcare participants that include mainly hospitals, pharmaceutical, biotech and medical device companies, regulators and policy makers. Our previous coverage of the IPO:

Yidu Tech (医渡云) Pre-IPO - Big Buzzwords 

Yidu Tech (医渡云) Pre-IPO - Forecast and Peer Valuation 

Yidu Tech (医渡云) IPO - Expensive but It's Still Justifiable 

Yidu Tech (医渡云) IPO Trading - Strong Demand Points to Good Debut 


Yidu Tech (医渡云) Lock-Up Expiry - About US$2bn Worth of Shares Unlocked

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.

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>Medlive will commence trading on Thursday, 15 July. Medlive priced its IPO at HK$27.20 and <a href="https://inews.hket.com/article/3006198/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%913%E9%9A%BB%E6%96%B0%E8%82%A1%E6%9A%97%E7%9B%A4%E3%80%80%E9%86%AB%E8%84%88%E9%80%9A2192%E5%8D%871%E6%88%90%E3%80%81%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA1350%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">closed 10% up at HK$29.90</a> in the Futu securities grey market. </p></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. In <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>, we stated that we would participate in the IPO due to an attractive IPO price range and strong blue-chip cornerstone support.</p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of HK$32.17 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the grey market price is attractive.</p></div></div></div>

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.Medlive will commence trading on Thursday, 15 July. Medlive priced its IPO at HK$27.20 and closed 10% up at HK$29.90 in the Futu securities grey market. 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. In Medlive Technology IPO: Valuation Insights, we stated that we would participate in the IPO due to an attractive IPO price range and strong blue-chip cornerstone support.Updating for the final IPO net raise, our base-case DCF derived price target of HK$32.17 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the grey market price is attractive.

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p><a href="https://www.cmlviz.com/stocks/LDOC" target="_blank" rel="noopener">LinkDoc Technology</a> plans to offer 10.8 million ADS shares priced at between $17.50 And $19.50 per ADS. If the underwriters exercise their option, there will be 12.45 million shares of ADS. At the high end of the IPO price range, the company will raise $243 million, which is lower than the $500 million that was expected to be raised as mentioned in the media in the past several weeks. This is a reflection of the volatile Chinese IPO environment in 2021.</p><p><a href="https://www.cmlviz.com/stocks/LDOC/news/b/2021/07/01/linkdoc-technology-ltd-sees-u-s-ipo-of-10-8-mln-adss-expected-to-be-priced-between-17-50-and-19-50-per-ads---filing" target="_blank" rel="noopener">Alibaba Health</a>, Lake Bleu Prime Healthcare Master Fund, and UBS Asset Management have indicated to buy about $25 million each of ADS in this IPO at the IPO price. </p><div class="content-highlight">
<p>Our base case valuation of LinkDoc Technology suggests an implied market cap of $2.0 billion or $22.3 per share. At the mid point of the IPO price range ($18.5), our base case valuation suggests a 20% upside. Given the moderate upside, we have a Positive rating on this IPO.</p>
<p>Our base case valuation is based on 7.0x EV/S using our estimated sales of 1,827 million RMB. Our base case valuation multiple of 7.0x EV/S is based on a 20% discount to the comps' average EV/S multiple in 2022. We used a 20% discount to the comps' average valuation multiple mainly due to lower expected sales and lower operating margins for LinkDoc versus the comps.</p>
</div>

LinkDoc Technology plans to offer 10.8 million ADS shares priced at between $17.50 And $19.50 per ADS. If the underwriters exercise their option, there will be 12.45 million shares of ADS. At the high end of the IPO price range, the company will raise $243 million, which is lower than the $500 million that was expected to be raised as mentioned in the media in the past several weeks. This is a reflection of the volatile Chinese IPO environment in 2021.Alibaba Health, Lake Bleu Prime Healthcare Master Fund, and UBS Asset Management have indicated to buy about $25 million each of ADS in this IPO at the IPO price. 
Our base case valuation of LinkDoc Technology suggests an implied market cap of $2.0 billion or $22.3 per share. At the mid point of the IPO price range ($18.5), our base case valuation suggests a 20% upside. Given the moderate upside, we have a Positive rating on this IPO.
Our base case valuation is based on 7.0x EV/S using our estimated sales of 1,827 million RMB. Our base case valuation multiple of 7.0x EV/S is based on a 20% discount to the comps' average EV/S multiple in 2022. We used a 20% discount to the comps' average valuation multiple mainly due to lower expected sales and lower operating margins for LinkDoc versus the comps.


LinkDoc Technology IPO Valuation Analysis

China

Chinese big data and AI-powered healthcare solutions provider.

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Yidu Tech Inc (2158 HK)

Pre-IPO Sinohealth Technology - Solid Financial Performance Cannot Cover up the Challenges Ahead

This article mainly analyzed Sinohealth in terms of the industry characteristics, its business, comparison with peers (Yidu Tech, Linkdoc, etc.),...

Xinyao (Criss) Wang

Last Week in Event SPACE: Capitaland, Boral, Milton/WHSP, Santos/Oil Search, Education Profit Ban

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Yidu Tech (医渡云) Lock-Up Expiry - About US$2bn Worth of Shares Unlocked

Yidu Tech Inc (2158 HK) (Yidu) IPO lock-up expired on 15th July, 2021. Earlier in January, the company raised about US$539m

Zhen Zhou, Toh

Medlive Technology IPO: Trading Debut

Medlive will commence trading on 15 July. Medlive priced at HK$27.20 and closed 10% up at HK$29.90 in the Futu grey market. Our DCF sensitivity...

Arun George

LinkDoc Technology IPO Valuation Analysis

Our base case valuation of LinkDoc Technology suggests an implied market cap of $2.0 billion or $22.3 per share, which represents 20% upside from...

Douglas Kim

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