Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Equity Capital Markets

<p>Broncus raised HKD 1,552 million (USD 199m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, September 23rd.</p>
<p>In our previous note, we discussed that the company's core product, InterVapor, is a minimally invasive surgery that uses heated water vapor to treat the chronic obstructive pulmonary disease (COPD). In addition to the COPD indication, the company plans to further develop the product for the treatment of lung cancer. Another core product, RF-II uses radio frequency to treat lung cancer. Besides InterVapor and RF-II, the company also has a commercialized lung navigation system which has a leading market share in China. However, we believe the market for the lung navigation system is still in the early stage of development in China and hence the small market size.  We think the company has a strong pre-IPO investor line-up with backing from the founder of VenusMedtech and its management team is experienced. We also provided our thoughts on valuation of Broncus.</p>
<p>In this note, we look at the updates since our last note. We re-iterate our view that the company is fairly valued at the top end and will stay away from the company.</p>

Broncus raised HKD 1,552 million (USD 199m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, September 23rd.
In our previous note, we discussed that the company's core product, InterVapor, is a minimally invasive surgery that uses heated water vapor to treat the chronic obstructive pulmonary disease (COPD). In addition to the COPD indication, the company plans to further develop the product for the treatment of lung cancer. Another core product, RF-II uses radio frequency to treat lung cancer. Besides InterVapor and RF-II, the company also has a commercialized lung navigation system which has a leading market share in China. However, we believe the market for the lung navigation system is still in the early stage of development in China and hence the small market size.  We think the company has a strong pre-IPO investor line-up with backing from the founder of VenusMedtech and its management team is experienced. We also provided our thoughts on valuation of Broncus.
In this note, we look at the updates since our last note. We re-iterate our view that the company is fairly valued at the top end and will stay away from the company.

Broncus (堃博医疗) IPO Trading: Chilled for a Reason but Mind the Share Concentration

Acotec Scientific / Equity Capital Markets

<p>Acotec raised HKD 1,529 million (USD 196m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, August 24th.</p>
<p>In our previous note, we looked at two core drug coated balloon products of the company, namely the AcoArt Orchid &amp; Dhalia for the above the knee artery stenosis and AcoArt Tulip &amp; Litos for the below the knee stenosis. Both AcoArt Orchid &amp; Dhalia, and AcoArt Tulip &amp; Litos reported efficacy that could be potentially better than its benchmark product. Thanks to its early mover advantage, the AcoArt Orchid &amp; Dhalia had a dominant market share. The main growth driver of the company's core product will be increasing penetration rate and indication expansion. Besides the DCB products, we think the company's product pipeline is not exciting. The company has a good management team but the pre-IPO investors are overall mediocre.</p>
<p>In this note, we look at the updates since our last note. Similar to HeartCare, the demand for the deal is strong from the retail side but weak on the institution side. We re-iterate our view that the company is fairly valued at the top end. </p>

Acotec raised HKD 1,529 million (USD 196m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, August 24th.
In our previous note, we looked at two core drug coated balloon products of the company, namely the AcoArt Orchid &amp; Dhalia for the above the knee artery stenosis and AcoArt Tulip &amp; Litos for the below the knee stenosis. Both AcoArt Orchid &amp; Dhalia, and AcoArt Tulip &amp; Litos reported efficacy that could be potentially better than its benchmark product. Thanks to its early mover advantage, the AcoArt Orchid &amp; Dhalia had a dominant market share. The main growth driver of the company's core product will be increasing penetration rate and indication expansion. Besides the DCB products, we think the company's product pipeline is not exciting. The company has a good management team but the pre-IPO investors are overall mediocre.
In this note, we look at the updates since our last note. Similar to HeartCare, the demand for the deal is strong from the retail side but weak on the institution side. We re-iterate our view that the company is fairly valued at the top end. 

Acotec (先瑞达) IPO Trading: Expect Poor Debut Performance

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.

<div><p><a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a> is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are <em>AcorArt Orchid &amp; Dhalia</em> and <em>AcorArt Tulip &amp; Litos</em>. </p></div><div><p>Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares. Pricing will be finalised on 17 August and the shares will list on 24 August.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/acotec-scientific-ipo-living-right" target="_blank" data-smartkarma-citation="insights:56006" rel="noopener">Acotec Scientific IPO: Living Right</a>, we opined that Acotec has an established commercialisation track record with <em>AcorArt Orchid &amp; Dhalia</em> launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. We concluded that Acotec’s product portfolio is attractive.  </p></div><div><div><div class="content-highlight"><p>Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range of HK$22.20-23.80 per share. Consequently, we think the shares are fully priced at the IPO price range. In combination with the lack of blue-chip cornerstone investors, we would wait on the sidelines for a lower entry point. </p></div></div></div>

Acotec Scientific Holdings (6669 HK) is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are AcorArt Orchid &amp; Dhalia and AcorArt Tulip &amp; Litos. Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares. Pricing will be finalised on 17 August and the shares will list on 24 August.In Acotec Scientific IPO: Living Right, we opined that Acotec has an established commercialisation track record with AcorArt Orchid &amp; Dhalia launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. We concluded that Acotec’s product portfolio is attractive.  Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range of HK$22.20-23.80 per share. Consequently, we think the shares are fully priced at the IPO price range. In combination with the lack of blue-chip cornerstone investors, we would wait on the sidelines for a lower entry point. 

Acotec Scientific IPO: Valuation Insights

<p><a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a> is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are A<em>corArt Orchid &amp; Dhalia</em> and <em>AcorArt Tulip &amp; Litos</em>. </p><p>Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares (51.66% of the offer shares at the mid-point of the IPO price range). </p><div class="content-highlight"><p>Refreshingly, Acotec has an established commercialisation track record with A<em>corArt Orchid &amp; Dhalia</em> launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. Overall, we believe that Acotec’s product portfolio is attractive. We will discuss the valuation in the next note. </p></div>

Acotec Scientific Holdings (6669 HK) is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are AcorArt Orchid &amp; Dhalia and AcorArt Tulip &amp; Litos. Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares (51.66% of the offer shares at the mid-point of the IPO price range). Refreshingly, Acotec has an established commercialisation track record with AcorArt Orchid &amp; Dhalia launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. Overall, we believe that Acotec’s product portfolio is attractive. We will discuss the valuation in the next note. 

<p>Acotec, a leading China-based peripheral-vascular interventional device company, started book building to raise up to USD 210m via a Hong Kong listing.</p><p>In our previous note, we looked at two core drug coated balloon products of the company, namely the AcoArt Orchid &amp; Dhalia for the above the knee artery stenosis and AcoArt Tulip &amp; Litos for the below the knee stenosis. Both AcoArt Orchid &amp; Dhalia, and AcoArt Tulip &amp; Litos reported efficacy that could be potentially better than its benchmark product. Thanks to its early mover advantage, the AcoArt Orchid &amp; Dhalia had a dominant market share. The main growth driver of the company's core product will be increasing penetration rate and indication expansion. Besides the DCB products, we think the company's product pipeline is not exciting. The company has a good management team but the pre-IPO investors are overall mediocre.</p><p>In this note, we provide an update for the book building. We think the risk reward does not warrant a participation at the high end.</p>

Acotec, a leading China-based peripheral-vascular interventional device company, started book building to raise up to USD 210m via a Hong Kong listing.In our previous note, we looked at two core drug coated balloon products of the company, namely the AcoArt Orchid &amp; Dhalia for the above the knee artery stenosis and AcoArt Tulip &amp; Litos for the below the knee stenosis. Both AcoArt Orchid &amp; Dhalia, and AcoArt Tulip &amp; Litos reported efficacy that could be potentially better than its benchmark product. Thanks to its early mover advantage, the AcoArt Orchid &amp; Dhalia had a dominant market share. The main growth driver of the company's core product will be increasing penetration rate and indication expansion. Besides the DCB products, we think the company's product pipeline is not exciting. The company has a good management team but the pre-IPO investors are overall mediocre.In this note, we provide an update for the book building. We think the risk reward does not warrant a participation at the high end.

Acotec (先瑞达) IPO: Risk-Reward Does Not Warrant Participation

China

Acotec Scientific is a medical technology company specializing in the research, development, and application of innovative solutions for vascular diseases. Its core products include drug-coated balloons (DCB) and percutaneous transluminal angioplasty (PTA) balloon catheters, such as AcoArt Orchid & Dhalia. The company was founded in 2008 and is headquartered in Beijing, China.

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Acotec Scientific (6669 HK)

Acotec (先瑞达) IPO Trading: Expect Poor Debut Performance

We look at the updates of Acotec IPO since our last note. We think the institutional demand is week for the price and we re-iterate our view that...

Ke Yan, CFA, FRM

Acotec Scientific IPO: Valuation Insights

Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range. Consequently, we think the...

Arun George

Acotec Scientific IPO: Living Right

Acotec has launched an HKEx IPO to raise net proceeds of $189 million at the mid-point of the IPO price range. Overall, we believe that Acotec’s...

Arun George

Acotec (先瑞达) IPO: Risk-Reward Does Not Warrant Participation

We look at the deal term and are of the view that the risk reward does not warrant a participation on Acotec at the high end.

Ke Yan, CFA, FRM

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Broncus (堃博医疗) IPO Trading: Chilled for a Reason but Mind the Share Concentration

We look at the updates since our last note for Broncus IPO. We re-iterate our view that the company is fairly valued at the top end and will stay...

Ke Yan, CFA, FRM

Acotec (先瑞达) IPO Trading: Expect Poor Debut Performance

We look at the updates of Acotec IPO since our last note. We think the institutional demand is week for the price and we re-iterate our view that...

Ke Yan, CFA, FRM

Acotec Scientific IPO: Valuation Insights

Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range. Consequently, we think the...

Arun George

Acotec Scientific IPO: Living Right

Acotec has launched an HKEx IPO to raise net proceeds of $189 million at the mid-point of the IPO price range. Overall, we believe that Acotec’s...

Arun George

Acotec (先瑞达) IPO: Risk-Reward Does Not Warrant Participation

We look at the deal term and are of the view that the risk reward does not warrant a participation on Acotec at the high end.

Ke Yan, CFA, FRM