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.

Equity Capital Markets

Shanghai HeartCare Medical Technology / Equity Capital Markets

<p>Shanghai HeartCare raised HKD 1,014 million (USD 131m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, August 20th.</p>
<p>In our previous note, we looked at the company's two core products Captor and LAA Occluder. We think the Captor, a stent retrieving thrombectomy device, is the main selling point of the deal given its decent efficacy and safety data and it has already been approved by the NMPA. Market structure for Captor is characterized by the early stage of growth and dominance by MNC players and the company's product is the first approved domestic product with commendable data from head-to-head clinical trials. The company's management are mainly ex-employee from Microport Scientific, a leading international medical device player in China.</p>
<p>In this note, we look at the updates since our last note. The demand for the deal is strong from the retail side but weak on the institution side. We think the institutional investors are risk off for the deal given the overhang of legal proceedings and the weak sentiment on medical devices and hence the debut performance is likely under pressure. Otherwise we remain positive on the company from a valuation perspective.</p>

Shanghai HeartCare raised HKD 1,014 million (USD 131m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, August 20th.
In our previous note, we looked at the company's two core products Captor and LAA Occluder. We think the Captor, a stent retrieving thrombectomy device, is the main selling point of the deal given its decent efficacy and safety data and it has already been approved by the NMPA. Market structure for Captor is characterized by the early stage of growth and dominance by MNC players and the company's product is the first approved domestic product with commendable data from head-to-head clinical trials. The company's management are mainly ex-employee from Microport Scientific, a leading international medical device player in China.
In this note, we look at the updates since our last note. The demand for the deal is strong from the retail side but weak on the institution side. We think the institutional investors are risk off for the deal given the overhang of legal proceedings and the weak sentiment on medical devices and hence the debut performance is likely under pressure. Otherwise we remain positive on the company from a valuation perspective.

Heartcare (心玮医疗) IPO Trading: Risk-Off for Institutional Investors

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.

Acotec Scientific Holdings / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a> is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are <em>AcorArt Orchid &amp; Dhalia</em> and <em>AcorArt Tulip &amp; Litos</em>. </p></div><div><p>Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares. Pricing will be finalised on 17 August and the shares will list on 24 August.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/acotec-scientific-ipo-living-right" target="_blank" data-smartkarma-citation="insights:56006" rel="noopener">Acotec Scientific IPO: Living Right</a>, we opined that Acotec has an established commercialisation track record with <em>AcorArt Orchid &amp; Dhalia</em> launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. We concluded that Acotec’s product portfolio is attractive.  </p></div><div><div><div class="content-highlight"><p>Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range of HK$22.20-23.80 per share. Consequently, we think the shares are fully priced at the IPO price range. In combination with the lack of blue-chip cornerstone investors, we would wait on the sidelines for a lower entry point. </p></div></div></div>

Acotec Scientific Holdings (6669 HK) is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are AcorArt Orchid &amp; Dhalia and AcorArt Tulip &amp; Litos. Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares. Pricing will be finalised on 17 August and the shares will list on 24 August.In Acotec Scientific IPO: Living Right, we opined that Acotec has an established commercialisation track record with AcorArt Orchid &amp; Dhalia launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. We concluded that Acotec’s product portfolio is attractive.  Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range of HK$22.20-23.80 per share. Consequently, we think the shares are fully priced at the IPO price range. In combination with the lack of blue-chip cornerstone investors, we would wait on the sidelines for a lower entry point. 

Acotec Scientific IPO: Valuation Insights

<p><a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a> is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are A<em>corArt Orchid &amp; Dhalia</em> and <em>AcorArt Tulip &amp; Litos</em>. </p><p>Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares (51.66% of the offer shares at the mid-point of the IPO price range). </p><div class="content-highlight"><p>Refreshingly, Acotec has an established commercialisation track record with A<em>corArt Orchid &amp; Dhalia</em> launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. Overall, we believe that Acotec’s product portfolio is attractive. We will discuss the valuation in the next note. </p></div>

Acotec Scientific Holdings (6669 HK) is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are AcorArt Orchid &amp; Dhalia and AcorArt Tulip &amp; Litos. Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares (51.66% of the offer shares at the mid-point of the IPO price range). Refreshingly, Acotec has an established commercialisation track record with AcorArt Orchid &amp; Dhalia launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. Overall, we believe that Acotec’s product portfolio is attractive. We will discuss the valuation in the next note. 

<p>Acotec, a leading China-based peripheral-vascular interventional device company, started book building to raise up to USD 210m via a Hong Kong listing.</p><p>In our previous note, we looked at two core drug coated balloon products of the company, namely the AcoArt Orchid &amp; Dhalia for the above the knee artery stenosis and AcoArt Tulip &amp; Litos for the below the knee stenosis. Both AcoArt Orchid &amp; Dhalia, and AcoArt Tulip &amp; Litos reported efficacy that could be potentially better than its benchmark product. Thanks to its early mover advantage, the AcoArt Orchid &amp; Dhalia had a dominant market share. The main growth driver of the company's core product will be increasing penetration rate and indication expansion. Besides the DCB products, we think the company's product pipeline is not exciting. The company has a good management team but the pre-IPO investors are overall mediocre.</p><p>In this note, we provide an update for the book building. We think the risk reward does not warrant a participation at the high end.</p>

Acotec, a leading China-based peripheral-vascular interventional device company, started book building to raise up to USD 210m via a Hong Kong listing.In our previous note, we looked at two core drug coated balloon products of the company, namely the AcoArt Orchid &amp; Dhalia for the above the knee artery stenosis and AcoArt Tulip &amp; Litos for the below the knee stenosis. Both AcoArt Orchid &amp; Dhalia, and AcoArt Tulip &amp; Litos reported efficacy that could be potentially better than its benchmark product. Thanks to its early mover advantage, the AcoArt Orchid &amp; Dhalia had a dominant market share. The main growth driver of the company's core product will be increasing penetration rate and indication expansion. Besides the DCB products, we think the company's product pipeline is not exciting. The company has a good management team but the pre-IPO investors are overall mediocre.In this note, we provide an update for the book building. We think the risk reward does not warrant a participation at the high end.

Acotec (先瑞达) IPO: Risk-Reward Does Not Warrant Participation

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<p>The neuro-interventional medical device company, <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>  has announced the terms for its upcoming Hong Kong IPO. The company plans to issue 6.6m shares (20.9% of the total outstanding shares post-IPO) at an indicative IPO price range of HK$160-171 per share and will raise net proceeds of HK$980.6m (US$125.9m) at the midpoint of the IPO price range of HK$165.5 per share at a market capitalisation of HK$5.2bn and a post-money EV of HK$3.8bn.</p><p>Shanghai Heartcare plans to use approx. 45.3% of the net IPO proceeds on funding the ongoing R&amp;D, manufacturing and marketing of its core products Captor and LAA Occluder in China. The company also plans to spend about 40% of the net IPO proceeds on developing its other product candidates in the pipeline and another 4.8% of the net proceeds on continued expansion of the company’s product portfolio.</p><p>The company has entered into cornerstone investment agreements (with 10 investors) for an aggregate amount of HK$513.15m (US$66m) that represents 46.96% of the offer shares (at the midpoint) with lake Bleu Prime Healthcare Master Fund Limited (US$10m), Boyu Capital Opportunities Fund (US$10m), Octagon Investments Master Fund (US$10m), Aspex Master Fund (US$10m) and several other investors.  </p>

The neuro-interventional medical device company, Shanghai HeartCare Medical Technology (6609 HK)  has announced the terms for its upcoming Hong Kong IPO. The company plans to issue 6.6m shares (20.9% of the total outstanding shares post-IPO) at an indicative IPO price range of HK$160-171 per share and will raise net proceeds of HK$980.6m (US$125.9m) at the midpoint of the IPO price range of HK$165.5 per share at a market capitalisation of HK$5.2bn and a post-money EV of HK$3.8bn.Shanghai Heartcare plans to use approx. 45.3% of the net IPO proceeds on funding the ongoing R&amp;D, manufacturing and marketing of its core products Captor and LAA Occluder in China. The company also plans to spend about 40% of the net IPO proceeds on developing its other product candidates in the pipeline and another 4.8% of the net proceeds on continued expansion of the company’s product portfolio.The company has entered into cornerstone investment agreements (with 10 investors) for an aggregate amount of HK$513.15m (US$66m) that represents 46.96% of the offer shares (at the midpoint) with lake Bleu Prime Healthcare Master Fund Limited (US$10m), Boyu Capital Opportunities Fund (US$10m), Octagon Investments Master Fund (US$10m), Aspex Master Fund (US$10m) and several other investors.  

Shanghai Heartcare IPO: DCF Offers Decent Upside but Mind the Ongoing Lawsuit with Medtronic

China

Leading player in the neuro- and peripheral-vascular interventional medical device market in China.

Zylox-Tonbridge Medical Technology (2190 HK)

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Zylox-Tonbridge Medical Technology (2190 HK)

Heartcare (心玮医疗) IPO Trading: Risk-Off for Institutional Investors

We analyze the new information for HeartCare IPO. We think the demand is not strong and debut performance will be under pressure given the overhang...

Ke Yan, CFA, FRM

Acotec Scientific IPO: Valuation Insights

Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range. Consequently, we think the...

Arun George

Acotec Scientific IPO: Living Right

Acotec has launched an HKEx IPO to raise net proceeds of $189 million at the mid-point of the IPO price range. Overall, we believe that Acotec’s...

Arun George

Acotec (先瑞达) IPO: Risk-Reward Does Not Warrant Participation

We look at the deal term and are of the view that the risk reward does not warrant a participation on Acotec at the high end.

Ke Yan, CFA, FRM

Shanghai Heartcare IPO: DCF Offers Decent Upside but Mind the Ongoing Lawsuit with Medtronic

Our DCF valuation offers a price per share of HK$182.78 which is 6.9% higher than the upper end of the company’s indicative IPO price range of...

Shifara Samsudeen, ACMA, CGMA

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