Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of IPO & Placements for Aequitas Research. At Aequitas we cover all IPOs and placements across Asia-Pac with a deal size of at least US$100m. 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%. 
Prior to Aequitas. I was heading Content Strategy for Smartkarma, along with covering IPOs & Placement. In an earlier life I have covered ASEAN property and the banking space in India.

Head of Research, IPOs & Placements

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Yichang HEC Changjiang Pharma / Equity Capital Markets

<p>YiChang HEC ChangJiang Pharmaceuticals (YHCP) plans to raise US$160-215m through an issuance of primary shares in its IPO.</p><p>We've worked along with <a href="https://www.smartkarma.com/profiles/13" target="_blank" data-smartkarma-citation="accounts:13">Kemp Dolliver, CFA</a> , healthcare expert and our fellow insight provider, to analyse the deal. While growth seems robust and valuations are at a discount to peers, we would still avoid the deal, given:</p><ul><li>Growth over the past few years has been stupendous but was mainly driven by selling a licensed generic version of Oseltamivir Phosphate, the patents for which start to expire over 2016-17</li><li>YHCP doesn't plan to do any R&amp;D, instead it has signed a ROFR with HEC Research, owned by the parent, to  buy/license any future drugs from HEC Research, i.e. the listed entity will only be a manufacturing shell while there is a risk of the profit from R&amp;D might be absorbed somewhere else</li><li>There are also other corporate governance issues including related party transactions, the listed entity not housing all the pharma business, and of dividend payout prior to listing</li><li>The deal doesn't score well on our framework, given the above corporate governance issues and the mixed record for past healthcare listing in Hong Kong</li><li>Valuations range seems to imply a discount to listed peers, but this might be warranted given that YHCP is just a manufacturing entity and doesn't house significant R&amp;D functions</li></ul>

YiChang HEC ChangJiang Pharmaceuticals (YHCP) plans to raise US$160-215m through an issuance of primary shares in its IPO.We've worked along with Kemp Dolliver, CFA , healthcare expert and our fellow insight provider, to analyse the deal. While growth seems robust and valuations are at a discount to peers, we would still avoid the deal, given:Growth over the past few years has been stupendous but was mainly driven by selling a licensed generic version of Oseltamivir Phosphate, the patents for which start to expire over 2016-17YHCP doesn't plan to do any R&amp;D, instead it has signed a ROFR with HEC Research, owned by the parent, to  buy/license any future drugs from HEC Research, i.e. the listed entity will only be a manufacturing shell while there is a risk of the profit from R&amp;D might be absorbed somewhere elseThere are also other corporate governance issues including related party transactions, the listed entity not housing all the pharma business, and of dividend payout prior to listingThe deal doesn't score well on our framework, given the above corporate governance issues and the mixed record for past healthcare listing in Hong KongValuations range seems to imply a discount to listed peers, but this might be warranted given that YHCP is just a manufacturing entity and doesn't house significant R&amp;D functions

HEC ChangJiang Pharma IPO - Just a Manufacturing Shell