IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

WeDoctor Holdings / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/wedoctor-holdings" target="_blank" data-smartkarma-citation="entities:28931:1" rel="noopener">WeDoctor Holdings (1737089D HK)</a> is the largest digital medical service platform in China as measured by both the number of internet hospitals as of 31 December 2020 and the volume of digital medical consultations provided in 2019, according to Frost &amp; Sullivan. We Doctor was filed for an HKEx IPO to raise around $2-3 billion, according to press reports. We Doctor counts <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, Hillhouse Capital, <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a>, Sequoia Capital, <a href="https://www.smartkarma.com/entities/goldman-sachs-group-inc" target="_blank" data-smartkarma-citation="entities:785:1" rel="noopener">Goldman Sachs Group (GS US)</a> and Qiming Venture Partners as shareholders. In response to the COVID-19 outbreak, individuals have become increasingly focused on personal health and wellbeing which has driven user acceptance of online healthcare platforms. The proportion of digitalisation in the Chinese health market is expected to increase rapidly from 3.3% in 2019 to 24.0% of total healthcare expenditure in 2030, according to Frost and Sullivan.<div class="content-highlight">Consequently, and despite the choppy markets and waning enthusiasm for Chinese tech, the shares of <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technology-company-limited" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technology Company Limited (1833 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> are up 10%, 1% and 62% YTD, respectively. Overall, for investors willing to brave the IPO markets, we believe that We Doctor is an attractive play on the accelerating digitalisation of China’s healthcare market.</div>

WeDoctor Holdings (1737089D HK) is the largest digital medical service platform in China as measured by both the number of internet hospitals as of 31 December 2020 and the volume of digital medical consultations provided in 2019, according to Frost &amp; Sullivan. We Doctor was filed for an HKEx IPO to raise around $2-3 billion, according to press reports. We Doctor counts Tencent Holdings (700 HK), Hillhouse Capital, AIA Group Ltd (1299 HK), Sequoia Capital, Goldman Sachs Group (GS US) and Qiming Venture Partners as shareholders. In response to the COVID-19 outbreak, individuals have become increasingly focused on personal health and wellbeing which has driven user acceptance of online healthcare platforms. The proportion of digitalisation in the Chinese health market is expected to increase rapidly from 3.3% in 2019 to 24.0% of total healthcare expenditure in 2030, according to Frost and Sullivan.Consequently, and despite the choppy markets and waning enthusiasm for Chinese tech, the shares of Ping An Healthcare and Technology Company Limited (1833 HK), Alibaba Health Information Technology (241 HK) and JD Health (6618 HK) are up 10%, 1% and 62% YTD, respectively. Overall, for investors willing to brave the IPO markets, we believe that We Doctor is an attractive play on the accelerating digitalisation of China’s healthcare market.

We Doctor IPO Initiation: Patient Revolution

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. 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%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

JD Health International  / Equity Bottom-Up

<ul>
<li>JD Health (JDH)’s revenue growth rate accelerated to 81% yoy in 2H20, compared to 76% yoy in 1H20.</li>
<li>JDH’s product revenue grew more rapidly than the two competitors, Alibaba Health (241 HK) and Ping An (1833 HK).</li>
<li>We conclude an upside of 25%.</li>
</ul>
Aequitas Research coverage on JD Health:
<a href="https://www.smartkarma.com/insights/jd-health-quick-note-index-inclusions-weights-and-valuation-update" target="_blank" data-smartkarma-citation="insights:46163" rel="noopener">JD Health (京东健康) Quick Note - Index Inclusions, Weights, and Valuation Update</a> 
<a href="https://www.smartkarma.com/insights/jd-health-ipo-trading-looking-to-be-a-solid-debut" target="_blank" data-smartkarma-citation="insights:46088" rel="noopener">JD Health (京东健康) IPO Trading - Looking to Be a Solid Debut</a>


JD Health (JDH)’s revenue growth rate accelerated to 81% yoy in 2H20, compared to 76% yoy in 1H20.
JDH’s product revenue grew more rapidly than the two competitors, Alibaba Health (241 HK) and Ping An (1833 HK).
We conclude an upside of 25%.

Aequitas Research coverage on JD Health:
JD Health (京东健康) Quick Note - Index Inclusions, Weights, and Valuation Update 
JD Health (京东健康) IPO Trading - Looking to Be a Solid Debut 

JD Health (6618 HK): 2H20, Faster Than 1H20 and Alibaba Health

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

Industry viewpoints:<ul>
<li>The 5th volume-based purchase (VBP) could be kicked off in May or June this year, and then officially implement in July.</li>
<li>The National Health Care Security Administration pays high attention to the promotion of "Internet +" medical insurance payment.</li>
<li>The specialized hospitals in China are expected to have more growth potential than general hospitals. 
</li>
</ul>Company news:News about the updated progress of new drugs from <a href="https://www.smartkarma.com/entities/innovent-biologics-inc" target="_blank" data-smartkarma-citation="entities:27452:1" rel="noopener">Innovent Biologics Inc (1801 HK)</a>, <a href="https://www.smartkarma.com/entities/shanghai-henlius-biotech-inc" target="_blank" data-smartkarma-citation="entities:27888:1" rel="noopener">Shanghai Henlius Biotech (2696 HK)</a>, and <a href="https://www.smartkarma.com/entities/everest-medicines-ltd" target="_blank" data-smartkarma-citation="entities:29224:1" rel="noopener">Everest Medicines (1952 HK)</a>.Market review: Last week, stock price for healthcare sector in A share increased 2.81%, while CSI 300 increased 2.45% over the same period of time. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Industry viewpoints:
The 5th volume-based purchase (VBP) could be kicked off in May or June this year, and then officially implement in July.
The National Health Care Security Administration pays high attention to the promotion of "Internet +" medical insurance payment.
The specialized hospitals in China are expected to have more growth potential than general hospitals. 

Company news:News about the updated progress of new drugs from Innovent Biologics Inc (1801 HK), Shanghai Henlius Biotech (2696 HK), and Everest Medicines (1952 HK).Market review: Last week, stock price for healthcare sector in A share increased 2.81%, while CSI 300 increased 2.45% over the same period of time. Risk disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

HK/China Equity Long-Short

Osbert Tang, CFA

We find <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang Group Co (3818 HK)</a> (CNDX) an interesting and deeply undervalued asset play - investors will miss the big picture if they still consider the company as a sportswear with a weak competitive position. The vast value of CNDX lies in its investment portfolio and net cash, and the current 0.38x P/B is too depressed for its quality investments and strong financial position. Through its investments, particularly PE investments, CNDX gains indirect interests to many superb names include <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group</a>, <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a>, Cainiao Network, <a href="https://www.smartkarma.com/entities/tsingtao-brewery-co-ltd-h" target="_blank" data-smartkarma-citation="entities:1296:1" rel="noopener">Tsingtao Brewery Co Ltd H (168 HK)</a>, JD Digital, MeWe etc. We see potential positive catalysts include a sale of Kappa, IPOs of the PE-owned ventures, increase in dividend payout and a privatisation of the company.

We find China Dongxiang Group Co (3818 HK) (CNDX) an interesting and deeply undervalued asset play - investors will miss the big picture if they still consider the company as a sportswear with a weak competitive position. The vast value of CNDX lies in its investment portfolio and net cash, and the current 0.38x P/B is too depressed for its quality investments and strong financial position. Through its investments, particularly PE investments, CNDX gains indirect interests to many superb names include Ant Financial Services Group, Alibaba Health Information Technology (241 HK), Cainiao Network, Tsingtao Brewery Co Ltd H (168 HK), JD Digital, MeWe etc. We see potential positive catalysts include a sale of Kappa, IPOs of the PE-owned ventures, increase in dividend payout and a privatisation of the company.

China Dongxiang (3818 HK): It's Not a Sportswear Company....It's a Cheap Investment Fund

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Haidilao International Holding / Index Rebalance

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>, there are 3 inclusions - <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a>, <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a> and <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a>. This takes the number of index constituents to 55 and sets the stage for a further increase in the number of stocks as a part of the market consultation, the conclusions of which are to be announced on 1 March.One-way turnover is estimated at 2.65% and will result in a one-way trade of HK$6.08bn. The highest impact is on <a href="https://www.smartkarma.com/entities/longfor-properties" target="_blank" data-smartkarma-citation="entities:8149:1" rel="noopener">Longfor Properties (960 HK)</a> while the impact on <a href="https://www.smartkarma.com/entities/alibaba-health-information-technology-ltd" target="_blank" data-smartkarma-citation="entities:453:1" rel="noopener">Alibaba Health Information Technology (241 HK)</a> and <a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a> is lower, though still substantial.There are only 10 trading days to implementation of the changes, so the three stocks should move up on Monday and outperform their peers till implementation date.Hang Seng Indexes is scheduled to announce the conclusions of the market consultation on Monday, 1 March and there will be a lot more changes to the index. These changes should commence at the June 2021 review and will most likely be implemented in 4 tranches, concluding at the March 2022 review.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 26 February. The constituent changes will be effective after the close of trading on 12 March.For the Hong Kong Hang Seng Index (HSI INDEX), there are 3 inclusions - Alibaba Health Information Technology (241 HK), Longfor Properties (960 HK) and Haidilao (6862 HK). This takes the number of index constituents to 55 and sets the stage for a further increase in the number of stocks as a part of the market consultation, the conclusions of which are to be announced on 1 March.One-way turnover is estimated at 2.65% and will result in a one-way trade of HK$6.08bn. The highest impact is on Longfor Properties (960 HK) while the impact on Alibaba Health Information Technology (241 HK) and Haidilao (6862 HK) is lower, though still substantial.There are only 10 trading days to implementation of the changes, so the three stocks should move up on Monday and outperform their peers till implementation date.Hang Seng Indexes is scheduled to announce the conclusions of the market consultation on Monday, 1 March and there will be a lot more changes to the index. These changes should commence at the June 2021 review and will most likely be implemented in 4 tranches, concluding at the March 2022 review.

Hang Seng Index Rebalance: Three Adds; Market Consultation Conclusions on 1 March

China

Alibaba Health Information Technology Limited is an integrated healthcare information and content service provider. The Company uses product identification, authentication, and tracking system data for its healthcare information.

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Alibaba Health Information Tec (241 HK)

We Doctor IPO Initiation: Patient Revolution

We Doctor was filed for an HKEx IPO to raise around $2-3 bn. For investors willing to brave the IPO markets, We Doctor is an attractive play on the...

Arun George

JD Health (6618 HK): 2H20, Faster Than 1H20 and Alibaba Health

JD Health’s revenue growth rate accelerated to 81% yoy in 2H20, compared to 76% yoy in 1H20. JD Health’s product revenue grew more rapidly than...

Ming Lu

China Healthcare Weekly (Apr.2)

This article analyzed the upcoming 5th volume-based purchase, the "Internet +" medical insurance payment, the specialized hospital market...

Xinyao (Criss) Wang

China Dongxiang (3818 HK): It's Not a Sportswear Company....It's a Cheap Investment Fund

China Dongxiang is a deeply undervalued asset play, instead of a second-tier sportswear company in China. We believe focusing on the sportswear...

Osbert Tang, CFA

Hang Seng Index Rebalance: Three Adds; Market Consultation Conclusions on 1 March

There are 3 inclusions to the HSI - Ali Health, Longfor Prop and Haidilao. With 10 days to implementation, the stocks should outperform....

Brian Freitas

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