AK Medical Placement - Opportunistic Raise that Could Be Worth a Bet

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

AK Medical Holdings Limited / Equity Capital Markets

AK Medical Holdings (1789 HK) is a new listing with a proposed price range of HKD1.66 -2.00. The company is China's leading (in volume) orthopedic joint and spine replacement device manufacturer. AK Medical has taken share over the last few years by carving out a position as a high-quality domestic player that can undercut high-priced imported products. In addition, AK Medical has established a cutting-edge position in using 3D printing technology to manufacture products. The position is noteworthy, but we would not assign much value to this distinction at this point.The expected pricing date is Tuesday, December 12, 2017 (EST) / Wednesday, December 13, 2017 (HKT) with an expected settlement and listing date of Wednesday, December 20, 2017. This Insight will be relatively brief given the timetable and offering size (less than US$100 million) with heavy use of content from the offering document. If a picture is worth 1,000 words (百闻不如一见), then you should be well informed by the end.We have several outstanding questions regarding reimbursement risk and working capital policies, but are inclined to take the deal assuming that management's responses are thoughtful and sensible.

AK Medical Holdings (1789 HK) is a new listing with a proposed price range of HKD1.66 -2.00. The company is China's leading (in volume) orthopedic joint and spine replacement device manufacturer. AK Medical has taken share over the last few years by carving out a position as a high-quality domestic player that can undercut high-priced imported products. In addition, AK Medical has established a cutting-edge position in using 3D printing technology to manufacture products. The position is noteworthy, but we would not assign much value to this distinction at this point.The expected pricing date is Tuesday, December 12, 2017 (EST) / Wednesday, December 13, 2017 (HKT) with an expected settlement and listing date of Wednesday, December 20, 2017. This Insight will be relatively brief given the timetable and offering size (less than US$100 million) with heavy use of content from the offering document. If a picture is worth 1,000 words (百闻不如一见), then you should be well informed by the end.We have several outstanding questions regarding reimbursement risk and working capital policies, but are inclined to take the deal assuming that management's responses are thoughtful and sensible.

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AK Medical: Take It If The Answers Are Good