In this briefing:
- ECM Weekly (23 February 2019) – Futu, CStone, Dexin, New Century, AB InBev, MabPharma
- MabPharma (迈博医药) IPO: Assembled for a Trade?
- Fortis Healthcare: OK Results and a Cost-Cutter CEO
- HLX02: Innovation Could Overtake
1. ECM Weekly (23 February 2019) – Futu, CStone, Dexin, New Century, AB InBev, MabPharma
Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for upcoming IPOs.
Starting with listings in Hong Kong next week, CStone Pharma (2616 HK) and Dexin China Holdings (2019 HK) will list on the 26th of February. Dexin is said to have priced at the mid-point of its price range while CStone is priced above its mid-point.
We also heard that Haitong Unitrust International Leasing was given the green light by CSRC for its Hong Kong IPO. The company had previously re-filed its draft prospectus in September last year. Shanghai Dongzheng Automotive Finance has also received approval from CSRC for its IPO.
There had also been a small property developer, YinCheng, that had launched its US$100m IPO. Jinxin Fertility had also just filed its draft prospectus with the HKEX.
Back in the US, we are hearing that Futu Holdings Ltd (FHL US) could be starting its bookbuild as early as next week. Sumeet Singh had previously analyzed the company in his insight, Futu Holdings Pre-IPO – Great Metrics but in a Commoditised Industry, and he will be following up with another insight next week.
In Japan, there is an Aruhi Corp (7198 JP) placement in which Carlyle looking to sell their entire stake in the company. Sumeet Singh had covered in Aruhi Placement – Bigger than the IPO but Good Track Record and Price Performance Should Help. The placement would be more attractive if it corrects down over the next few days but the removal of overhang from Carlyle seemed to be very well received by the market and the share price had even traded up 13% on Wednesday this week.
Accuracy Rate:
Our overall accuracy rate is 72.1% for IPOs and 63.7% for Placements
(Performance measurement criteria is explained at the end of the note)
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New IPO filings
- Jinxin Fertility Group (US$600m, Hong Kong)
Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.
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News on Upcoming IPOs
- Fund Companies Ask Hong Kong to Relax IPO Investment Rules
- Chinese Tech Giants Seek Further IPO Rule Changes in Hong Kong
- Sembcorp could delay India energy IPO due to market conditions
- PNB Metlife IPO likely next fiscal
Smartkarma Community’s this week Analysis on Upcoming IPO
- New Century Hotel Mgmt IPO Preview: Two-Speed Businesses
- New Century Hotel (浙江開元酒店) Pre-IPO – Improved Profitability Not Driven by Underlying Operations
- Ab InBev Asia Pre-IPO – Quick Note – More like CR Beer Rather than Tsingtao
- MabPharma (迈博医药) IPO: Assembled for a Trade?
- Hyundai Autoever IPO Preview
- Hyundai Autoever IPO Pricing: Likely to Be a Dull Event Given No Growth Story & Glovis Merger
- HLX02: Innovation Could Overtake
2. MabPharma (迈博医药) IPO: Assembled for a Trade?
MabPharma, backed by Chinese private equity investor CDH, is seeking to list in Hong Kong. In this insight, we will discuss the following topics:
- The company’s background
- Details of pipeline drug candidates, the potential market of these products and the competition
- Shareholders and investors
- Questions for management meetings
- Summary of our likes and concerns
We will leave the discussion of valuation for our next insight.
Our coverage in the healthcare and biotech sectors:
- CStone Pharma (基石药业) IPO: Strong Assembly and Backing (Part 1)
Viva Biotech (维亚生物) IPO: When CRO Becomes Early Stage Biotech Investor
- Hansoh Pharma (翰森制药) IPO: Takeaways from Recent 4+7 City Centralized Tender Results
- Hansoh Pharma (翰森制药) IPO: A Leading Generic Player with Regulatory Overhang (Part 1)
- WuXi Apptec (药明康德) IPO: This A+H Listing Will Be Different
- Frontage Holding (方达控股) IPO: More Disclosure Needed to Understand Moat and Growth Prospect
- Ascentage Pharma (亚盛医药) IPO: Too Early for an IPO
- Junshi Bioscience (君实医药) IPO: Thoughts on Valuation (Part 2)
- Junshi Bioscience (君实医药) IPO: Early in Application but Behind in Key Indications (Part 1)
- CanSino Biologics (康希诺) IPO: Promising Pre-Clinical Results but Vaccine Scandal Weighs (Part 1)
- AOBiome Therapeutics IPO: Hope for Natural Therapeutic Treatment
- Stealth Biotherapeutics IPO: Cure the Symptoms but Not the Cause (Part 1)
- Innovent Biologics (信达生物) IPO: Pricing the PD-1 and Biosimilars Competition (Part 2)
- Innovent Biologics (信达生物) IPO: A Major PD-1 MAb Competitor Might Have Just Emerged (Part 1)
- MicuRx Pharma (盟科医药) IPO: Betting on Single Drug in the Not so Attractive Antibiotic Segment
- Hua Medicine (华领医药) IPO: Thoughts on Valuation
- Hua Medicine (华领医药) IPO: Reviving Roche’s Failed Attempt?
- BeiGene (百济神州) IPO: Dual-Listing with Upside Capped in the Near Term
- Ascletis Pharma (歌礼制药) IPO: Valuation Not Justified by Ganovo and Ravidasvir NPV (Part 3)
- Ascletis Pharma (歌礼制药) IPO: Three Valuation Risk Factors (Part 2)
- Ascletis Pharma (歌礼制药) IPO: Emerging Player in the Crowded HCV Drug Market
- China Isotope & Radiation IPO: Oligopoly, Visible Growth and High Barrier to Entry
- Zai Lab IPO: Thoughts on Valuation, Risks and Upsides (Part 2)
- Zai Lab IPO: Experienced Team, Promising In-Licensing Drug Pipeline (Part 1)
3. Fortis Healthcare: OK Results and a Cost-Cutter CEO
Fortis Healthcare (FORH IN) ‘s hospital business continued to improve in FQ3 while the lab business remained stable. This Insight briefly focuses on the highlights of the results and their implications. The hiring of a CEO out of Narayana Hrudayalaya (NARH IN) signals continued (and likely intensified) focus on efficiency to improve profitability.
We continue to think that Fortis is a promising turnaround story. Refer to the Insight Stream for the history of this situation.
4. HLX02: Innovation Could Overtake
The oncology treatment landscape in China is evolving rapidly as the government has prioritized access to innovative drugs to meet this significant unmet need. In particular, investors considering the Shanghai Henlius Biotech (1566213D HK) listing should be aware of the emergence of a drug that potentially is superior to Roche Holding AG (ROG SW)‘s Herceptin (and Shanghai Henlius’ HLX02) for the treatment of patients with HER2-positive breast cancer (and ultimately HER2-positive gastric cancer). While there should be good demand for cheaper alternatives to Herceptin, the availability of a superior alternative potentially shortens the lifecycle of Herceptin biosimilars.
China has only recently “modernized” its drug approval and reimbursement, so there is little precedent to rely upon to estimate the speed and magnitude of changes in the market. As brokers rollout forecasts for the company and HLX02, investors should ask if the numbers somehow reflect this risk.
We do not have a view of the offering, but tag this Insight as Bearish because we are highlighting a potential risk.
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