In today’s briefing:
- Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit
- Singapore Medical’s Light VGO Offer from Top Management
- Singapore Medical: Management’s Low-Balled Buyout
- Pre-IPO Jenscare Scientific – Difficult to Achieve Expected Commercialization Results
- Biocon Ltd (BIOS IN): Stake Sale in Subsidiary Is a Step in Right Direction
- Jenscare Scientific (JCS HK) Pre-IPO: Product Differentiation Is the Key Reason to Subscribe
- Modern Dental Group (3600.HK) 22H1- Share Price May Remain Tepid Due to Lack of Core Competitiveness
- Giant Biogene (巨子生物) Pre-IPO: Visits to Beauty Stores and Online Apps
Ramsay’s Bait-And-Switch KKR Offer Heads for the Exit
- KKR cannot improve the terms of its offer but left the door open by stating that a deal can be quickly closed if the Board is willing to reset expectations.
- The transaction is stuck in an impasse as Ramsay Health Care (RHC AU) will not recommend KKR’s offer until it is improved, and KKR says it cannot improve terms.
- The peers’ shares have been, on average, flat since the undisturbed date. The shares are trading slightly below the undisturbed price and are attractive on fundamentals.
Singapore Medical’s Light VGO Offer from Top Management
- Singapore Medical (SMG SP) received a voluntary conditional offer from management (chairman, CEO, exec director). The offer is cash (S$0.37) or scrip (1 new share in the offeror per share).
- The key condition is a 90% minimum acceptance condition. Irrevocables, which will take the scrip option, represent 51.67% of outstanding shares.
- The offer is light, but the offeror reserves the right to reduce the acceptance condition to a lower level (above 50%). Therefore, this offer will likely turn unconditional.
Singapore Medical: Management’s Low-Balled Buyout
- Healthcare provider Singapore Medical (SMG SP) has announced a voluntary conditional general offer from TLW Success, an entity equally controlled by three senior members of management.
- TLW is offering A$0.37/share, a 13.8% premium to last close. Shareholders are afforded an unlisted scrip option.
- TLW shareholders hold 16.49%. Irrevocables another 35.18%, or 51.67% all-in. The Offer is conditional on 90% of shares out held by the Offeror. The acceptance level condition may be reduced.
Pre-IPO Jenscare Scientific – Difficult to Achieve Expected Commercialization Results
- The main bottleneck in this market in China is the severe shortage of doctors and limited qualified hospitals to carry out such surgery, leading to lower-than-expected market penetration/sales performance.
- Jenscare Scientific (JCS HK)’s products have to face fierce competition, without obvious advantage of development progress, or the progress has already lagged behind the competitors.
- Overall, good valuation cannot be supported without promising commercialization outlook. We are not sure whether Jenscare can finally achieve the ideal return in the case of unfriendly external environment.
Biocon Ltd (BIOS IN): Stake Sale in Subsidiary Is a Step in Right Direction
- Biocon Ltd (BIOS IN) divested 5.4% stake in Syngene International Ltd (SYNG IN) and raised INR12.2B. The proceed will be used to finance Biocon’s acquisition of biologics business of Viatris.
- Biocon is still working on the equity-debt split of Viatris deal, and a final decision on the same will be announced soon.
- The strategic deal with Viatris will transform Biocon Biologics into a leading vertically integrated global biologics company, with one of the broadest and deepest commercialized biosimilars portfolio in the industry.
Jenscare Scientific (JCS HK) Pre-IPO: Product Differentiation Is the Key Reason to Subscribe
- Jenscare Scientific (JCS HK) is developing interventional products for the treatment of structural heart diseases. Its core product LuX-Valve is expected to become the first commercialized TTVR product in China.
- With its comprehensive portfolio and early mover advantage, Jenscare is well-positioned to capitalize on large and underpenetrated China’s structural heart diseases treatment market worth of RMB20.3 billion in 2030.
- Jenscare Scientific plans to raise $30 million (HKD234 million) in its third application for a Hong Kong IPO, with CICC and Citigroup being the joint sponsors.
Modern Dental Group (3600.HK) 22H1- Share Price May Remain Tepid Due to Lack of Core Competitiveness
- Due to better-than-expected VBP results, we saw a decent rally of MDG’s share price last Friday. However, all the medical products that are covered by VBP begin to lose logic.
- Backwardness in R&D is a bottleneck restricting MDG’s future growth. MDG is more like a manufacturing/processing plant relying on labor dividends than a technology company with high product added value.
- Multiple risks (e.g.pandemic, depreciation of exchange rate against US dollar, economic downturn, etc.) will add more uncertainties to MDG’s 2022 performance. MDG’s share price could remain tepid after temporary rally.
Giant Biogene (巨子生物) Pre-IPO: Visits to Beauty Stores and Online Apps
- Giant Biogene (GB) has a large sales network of physical distributors.
- We believe GB’s large capacity packages have price advantage over domestic competitors.
- But we also believe GB should strengthen or outsource its studio for live broadcasting sales.
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