IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

MicroTech Medical IPO: Valuation Insights

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Global Equity Research Ltd

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Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/phc-holdings-corp" target="_blank" data-smartkarma-citation="entities:34198:1" rel="noopener">PHC Holdings (6523 JP)</a> is a leading diversified diagnostic, life sciences and medical device company serving global markets. PHC shareholders include <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a> (owns 48.0% of PHC), <a href="https://www.smartkarma.com/entities/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui &amp; Co Ltd (8031 JP)</a> (21.1%), Life Science Institute (13.2%) and <a href="https://www.smartkarma.com/entities/panasonic-corp" target="_blank" data-smartkarma-citation="entities:222:1" rel="noopener">Panasonic Corp (6752 JP)</a> (11.3%).</p></div><div><p>At the indicative price of JPY3,700 per share, PHC will have a market cap of JPY452 billion (US$4.1 billion). PHC plans to raise JPY172 billion ($1.57 billion) by offering 5.8 million primary shares (JPY22 billion raise) and 40.7 million secondary shares (JPY150 billion raise). </p></div><div><div>
<p>In <a href="https://www.smartkarma.com/insights/phc-holdings-ipo-initiation-sugar-high" target="_blank" data-smartkarma-citation="insights:57915" rel="noopener">PHC Holdings IPO Initiation: Sugar High</a>, we opined that at first glance, PHC offers solid growth, stable and healthy margins along with solid cash generation. However, on an organic basis, the revenue has declined in each of the last two financial years. The strong growth in the recent first quarter was largely due to low comps and an unsustainable revenue boost from COVID-19 related products. We concluded that PHC’s fundamentals are mixed and we are inclined to watch this IPO from the sidelines.</p>
<div class="content-highlight"><p>Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the IPO. </p></div>
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PHC Holdings (6523 JP) is a leading diversified diagnostic, life sciences and medical device company serving global markets. PHC shareholders include KKR &amp; Co Inc (KKR US) (owns 48.0% of PHC), Mitsui &amp; Co Ltd (8031 JP) (21.1%), Life Science Institute (13.2%) and Panasonic Corp (6752 JP) (11.3%).At the indicative price of JPY3,700 per share, PHC will have a market cap of JPY452 billion (US$4.1 billion). PHC plans to raise JPY172 billion ($1.57 billion) by offering 5.8 million primary shares (JPY22 billion raise) and 40.7 million secondary shares (JPY150 billion raise). 
In PHC Holdings IPO Initiation: Sugar High, we opined that at first glance, PHC offers solid growth, stable and healthy margins along with solid cash generation. However, on an organic basis, the revenue has declined in each of the last two financial years. The strong growth in the recent first quarter was largely due to low comps and an unsustainable revenue boost from COVID-19 related products. We concluded that PHC’s fundamentals are mixed and we are inclined to watch this IPO from the sidelines.
Our valuation analysis suggests that PHC is fully valued at the indicative price. In combination with the mixed fundamentals, we would pass on the IPO. 


PHC Holdings

PHC Holdings IPO: Valuation Insights