In today’s briefing:
- Shulan Health Management Pre-IPO Tearsheet
- 4Paradigm IPO: The Bear Case
- Contec IPO Preview
- Seibu Giken Pre-IPO – Rapid Growth Followed by Rapid Deceleration
- Pre-IPO Neusoft Xikang (PHIP Updates) – Business Expansion and Profitability Remain in Doubt
Shulan Health Management Pre-IPO Tearsheet
- Shulan Health Management (1807987D CH) is looking to raise around US$150m in its Hong Kong IPO. The deal will be run by CICC, and Citic Securities.
- Shulan Health Management (SHM) is a technology-driven healthcare group in China that integrates healthcare services and medical research and education.
- The firm owned and operated three private general hospitals and provided hospital management services to 14 partner hospitals in China as of March 31, 2023.
4Paradigm IPO: The Bear Case
- 4Paradigm (1764934D HK), a leader in enterprise artificial intelligence (AI) in China, is pre-marketing a US$150-200 million HKEx IPO.
- In 4Paradigm IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on Sage Platform’s rapid slowdown, high customer concentration risk, recent gross margin pressure, FCF burn, rising cash collection cycle and BIS entity list designation.
Contec IPO Preview
- Contec is getting ready to complete an IPO on the KOSDAQ exchange in October 2023. The IPO price range is from 20,300 won to 22,500 won.
- According to the bankers’ valuation, the expected IPO market cap is from 292 billion won to 324 billion won.
- Contec was spun off from Korea Aerospace Research Institute and offers Space Ground Station Services and Satellite Image Processing & Application Services.
Seibu Giken Pre-IPO – Rapid Growth Followed by Rapid Deceleration
- Seibu Giken (6223 JP) (SG) is looking to raise around US$120m in its Japan IPO via selling a mix of primary and secondary shares.
- SG sells desiccant dehumidifiers and VOC concentrators in over fifty countries globally. Its two main products accounted for over 90% of its revenue in 2022.
- In this note, we look at the company’s past performance.
Pre-IPO Neusoft Xikang (PHIP Updates) – Business Expansion and Profitability Remain in Doubt
- Either from business model or investment logic, the key is to increase the revenue proportion of cloud hospital platform services. However, many restrictions have led to difficulties in nationwide expansion.
- Overreliance on government projects and public hospitals makes it difficult to generate high profits. Xikang may continue to suffer loss in the future, and its profitability is worrying.
- Based on our analysis, it could be difficult for Xikang to achieve good valuation performance in the future. we think its valuation should be lower than that of ClouDr.
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