Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

A chartered management accountant with more than 10 years of rich experience in investment research and financial analysis. Worked as an equity analyst for one of the world's largest asset managers with USD2.5trn in AUM covering numerous sectors including chemicals, retail, tech, autos, telco, real-estate and banks, globally. Experienced in fundamental equity research, industry research, commodity studies, forensic accounting, and due diligence reviews.

Equity Analyst

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Zhaoke Opthalmology IPO: Promising Drug Candidates; but Commercialisation May Take Longer

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Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Zhaoke Ophthalmology Pharmaceutical / Equity Capital Markets

Zhaoke Ophthalmology Pharmaceutical (6622 HK)

The Chinese ophthalmic pharmaceutical company, <a href="https://www.smartkarma.com/entities/zhaoke-ophthalmology-pharmaceutical" target="_blank" data-smartkarma-citation="entities:31495:1" rel="noopener">Zhaoke Ophthalmology Pharmaceutical (6622 HK)</a>  has set the terms for its HK IPO. The company plans to issue 123.6m shares at an indicative IPO price range of HK$15.38-16.8 per share and at the midpoint of the IPO price range of HK$16.09 per share, the company will receive net proceeds of HK$1,858m (US$239m).<table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 119.0pt;">Zhaoke Opthalmology IPO Details</td></tr>
<tr>
<td style="width: 69.0pt;">No. of Shares Issued</td>
<td style="width: 50.0pt;">                      123,567,500</td>
</tr>
<tr>
<td style="width: 69.0pt;">IPO Price per Share (HK$)</td>
<td style="width: 50.0pt;">15.38-16.80</td>
</tr>
<tr>
<td style="width: 69.0pt;">Offer as a % of Outstanding Shares</td>
<td style="width: 50.0pt;">23.09%</td>
</tr>
<tr>
<td style="width: 69.0pt;">Total Shares Outstanding</td>
<td style="width: 50.0pt;">535,155,500</td>
</tr>
<tr>
<td style="width: 69.0pt;">Net Proceeds (HK$m)</td>
<td style="width: 50.0pt;">1,857.80</td>
</tr>
<tr>
<td style="width: 69.0pt;">Market Capitalisation (HK$m)</td>
<td style="width: 50.0pt;">8,610.65</td>
</tr>
<tr>
<td style="width: 69.0pt;">Enterprise Value (HK$m)</td>
<td style="width: 50.0pt;">6,687.24</td>
</tr>
</tbody></table><div style="text-align: left;" class="content-caption">Source: Company disclosures, LSR (Net proceeds, market cap and EV are at the midpoint of the IPO price range, EV is after adjusting for net cash and net IPO proceeds)</div>The company also has entered into cornerstone investment agreements with CaaS Capital Master Fund, GIC Private Limited, Golden Valley Global and several other investors who have agreed to buy approx. 21.51% (at the midpoint) of the offer shares or approx. HK$427.8m of the offering.Zhaoke plans to use approx. 32% of the net IPO proceeds for clinical development and commercialisation of its core products. Another 46% of the net proceeds will be used to fund the ongoing R&amp;D activities and 7% of the IPO proceeds will be invested on expanding the production line of its Nansha Manufacturing facility in anticipation of upcoming product launches.

The Chinese ophthalmic pharmaceutical company, Zhaoke Ophthalmology Pharmaceutical (6622 HK)  has set the terms for its HK IPO. The company plans to issue 123.6m shares at an indicative IPO price range of HK$15.38-16.8 per share and at the midpoint of the IPO price range of HK$16.09 per share, the company will receive net proceeds of HK$1,858m (US$239m).
Zhaoke Opthalmology IPO Details

No. of Shares Issued
                      123,567,500


IPO Price per Share (HK$)
15.38-16.80


Offer as a % of Outstanding Shares
23.09%


Total Shares Outstanding
535,155,500


Net Proceeds (HK$m)
1,857.80


Market Capitalisation (HK$m)
8,610.65


Enterprise Value (HK$m)
6,687.24

Source: Company disclosures, LSR (Net proceeds, market cap and EV are at the midpoint of the IPO price range, EV is after adjusting for net cash and net IPO proceeds)The company also has entered into cornerstone investment agreements with CaaS Capital Master Fund, GIC Private Limited, Golden Valley Global and several other investors who have agreed to buy approx. 21.51% (at the midpoint) of the offer shares or approx. HK$427.8m of the offering.Zhaoke plans to use approx. 32% of the net IPO proceeds for clinical development and commercialisation of its core products. Another 46% of the net proceeds will be used to fund the ongoing R&amp;D activities and 7% of the IPO proceeds will be invested on expanding the production line of its Nansha Manufacturing facility in anticipation of upcoming product launches.

Zhaoke Opthalmology IPO Valuation: Overpriced