HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Beijing Airdoc Technology / Equity Capital Markets

<p>In recent years, the value of AI medical imaging has become increasingly prominent. For example, the application of CT for diagnosis in COVID-19 pandemic has strengthened the importance of imaging and played an immeasurable role in the prevention and treatment of COVID-19. In this context, many players in this industry have planned to start IPO in the capital market. On June 21, <a href="https://www.smartkarma.com/entities/beijing-airdoc-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:33524:1" rel="noopener">Beijing Airdoc Technology (BAT HK) </a>filed its prospectus with the HKEX and officially started its IPO process. Airdoc is a global market leader and pioneer in providing AI-empowered retina-based early detection, diagnosis and health risk assessment solutions. This insight mainly analyzed the business, the financial position and concerns of the Company.</p>

In recent years, the value of AI medical imaging has become increasingly prominent. For example, the application of CT for diagnosis in COVID-19 pandemic has strengthened the importance of imaging and played an immeasurable role in the prevention and treatment of COVID-19. In this context, many players in this industry have planned to start IPO in the capital market. On June 21, Beijing Airdoc Technology (BAT HK) filed its prospectus with the HKEX and officially started its IPO process. Airdoc is a global market leader and pioneer in providing AI-empowered retina-based early detection, diagnosis and health risk assessment solutions. This insight mainly analyzed the business, the financial position and concerns of the Company.

Pre-IPO Beijing Airdoc Technology - The Strength and the Concerns

Yonghe Medical Group / Equity Capital Markets

<p>Modern fast pace of life and huge work pressure make hair loss anxiety spread to all kinds of groups. As people pay more attention to hair, the awareness of hair health and management is gradually awakening, and hair transplantation is one of the solutions. On June 17, <a href="https://www.smartkarma.com/entities/yonghe-medical-group-co-ltd" target="_blank" data-smartkarma-citation="entities:33521:1" rel="noopener">Yonghe Medical Group (YMG HK)</a> formally submitted its prospectus to the HKEX and planned to be listed on the main board. If everything goes well, Yonghe will be the first listed company in the field of hair transplantation in China. However, despite the promising market potential, there are some concerns of the Company that deserve investors’ attention.</p>

Modern fast pace of life and huge work pressure make hair loss anxiety spread to all kinds of groups. As people pay more attention to hair, the awareness of hair health and management is gradually awakening, and hair transplantation is one of the solutions. On June 17, Yonghe Medical Group (YMG HK) formally submitted its prospectus to the HKEX and planned to be listed on the main board. If everything goes well, Yonghe will be the first listed company in the field of hair transplantation in China. However, despite the promising market potential, there are some concerns of the Company that deserve investors’ attention.

Pre-IPO Yonghe Medical Group - Here Are the Concerns

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.

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<p>Chaoju Eye Care raised HKD 1,357 million (USD 175m) from its global offering and will list on the Hong Kong Stock Exchange on Wednesday, July 7th.</p>
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<p>In previous notes, we discussed that Chaoju is an eye specialist hospital with a geographical focus in the Northern region in China. The company started in 1988 as an ophthalmic clinic and currently operates 17 hospitals with a total GFA of 87,146 sqm as of January 2021. The company recorded revenue growth of 13% p.a. between FY18 and FY19. Having said that, around 60% of the total revenue came from three hospitals, namely Baotou Hospital, Hohhot Hospital, and Chifeng Hospital. The company plans to open 11 new hospitals in Inner Mongolia, Zhejiang, and Jiangsu in the next three years, representing a 9% GFA CAGR. Another notable driver for the company is a higher mix of consumer ophthalmic services, which have a higher gross margin than other segments. We are of the view that the company doesn't have strong backing from investors. Its growth prospects in terms of hospital expansion are only moderate despite a strong momentum in the ophthalmic sector in China. </p>
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<p>In this note, we look at the updates since our last note. Sentiments wasn't positive for the deal, as  we have expected and share allocation for institutional investors were concentrated. As such we do not expect the deal to stay flat or fall marginally below IPO price on debut. </p>
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Chaoju Eye Care raised HKD 1,357 million (USD 175m) from its global offering and will list on the Hong Kong Stock Exchange on Wednesday, July 7th.


In previous notes, we discussed that Chaoju is an eye specialist hospital with a geographical focus in the Northern region in China. The company started in 1988 as an ophthalmic clinic and currently operates 17 hospitals with a total GFA of 87,146 sqm as of January 2021. The company recorded revenue growth of 13% p.a. between FY18 and FY19. Having said that, around 60% of the total revenue came from three hospitals, namely Baotou Hospital, Hohhot Hospital, and Chifeng Hospital. The company plans to open 11 new hospitals in Inner Mongolia, Zhejiang, and Jiangsu in the next three years, representing a 9% GFA CAGR. Another notable driver for the company is a higher mix of consumer ophthalmic services, which have a higher gross margin than other segments. We are of the view that the company doesn't have strong backing from investors. Its growth prospects in terms of hospital expansion are only moderate despite a strong momentum in the ophthalmic sector in China. 


In this note, we look at the updates since our last note. Sentiments wasn't positive for the deal, as  we have expected and share allocation for institutional investors were concentrated. As such we do not expect the deal to stay flat or fall marginally below IPO price on debut. 


Chaoju Eye Care (朝聚眼科) IPO Trading: Fairly Valued for Its Operation

Clarity Medical Group / Equity Capital Markets

<p>With the aging of the population and the increasing pressure of work, various eye diseases such as cataract, glaucoma, astigmatism, myopia emerge. Fortunately, with the continuous improvement of medical technology and medical system, in addition to public ophthalmic hospitals, private ophthalmic hospitals are also rising. On May 7<sup>th</sup>, 2021, <a href="https://www.smartkarma.com/entities/clarity-medical-group" target="_blank" data-smartkarma-citation="entities:28042:1" rel="noopener">Clarity Medical Group (CMG HK)</a> filed a prospectus with the Hong Kong Stock Exchange to apply for its main board listing. In fact, Clarity was ready to go public in 2019 but failed. However, after two years, the prospects for the IPO are not necessarily brighter.</p>

With the aging of the population and the increasing pressure of work, various eye diseases such as cataract, glaucoma, astigmatism, myopia emerge. Fortunately, with the continuous improvement of medical technology and medical system, in addition to public ophthalmic hospitals, private ophthalmic hospitals are also rising. On May 7th, 2021, Clarity Medical Group (CMG HK) filed a prospectus with the Hong Kong Stock Exchange to apply for its main board listing. In fact, Clarity was ready to go public in 2019 but failed. However, after two years, the prospects for the IPO are not necessarily brighter.

Pre-IPO Clarity Medical Group - The Prospects Are Still Not Brighter

<p>Chaoju Eye Care Holdings Limited is a leading ophthalmic medical service provider based in Northern China. The company launched book building to raise up to USD 233m via a Hong Kong listing.</p><p>In previous notes, we discussed that Chaoju is an eye specialist hospital with a geographical focus in the Northern region in China. The company started in 1988 as an ophthalmic clinic and currently operates 17 hospitals with a total GFA of 87,146 sqm as of January 2021. The company recorded revenue growth of 13% p.a. between FY18 and FY19. Having said that, around 60% of the total revenue came from three hospitals, namely Baotou Hospital, Hohhot Hospital, and Chifeng Hospital. The company plans to open 11 new hospitals in Inner Mongolia, Zhejiang, and Jiangsu in the next three years, representing a 9% GFA CAGR. Another notable driver for the company is a higher mix of consumer ophthalmic services, which have a higher gross margin than other segments. We are of the view that the company doesn't have strong backing from investors. Its growth prospects in terms of hospital expansion are only moderate despite a strong momentum in the ophthalmic sector in China. </p><p>In this note, we provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.</p>

Chaoju Eye Care Holdings Limited is a leading ophthalmic medical service provider based in Northern China. The company launched book building to raise up to USD 233m via a Hong Kong listing.In previous notes, we discussed that Chaoju is an eye specialist hospital with a geographical focus in the Northern region in China. The company started in 1988 as an ophthalmic clinic and currently operates 17 hospitals with a total GFA of 87,146 sqm as of January 2021. The company recorded revenue growth of 13% p.a. between FY18 and FY19. Having said that, around 60% of the total revenue came from three hospitals, namely Baotou Hospital, Hohhot Hospital, and Chifeng Hospital. The company plans to open 11 new hospitals in Inner Mongolia, Zhejiang, and Jiangsu in the next three years, representing a 9% GFA CAGR. Another notable driver for the company is a higher mix of consumer ophthalmic services, which have a higher gross margin than other segments. We are of the view that the company doesn't have strong backing from investors. Its growth prospects in terms of hospital expansion are only moderate despite a strong momentum in the ophthalmic sector in China. In this note, we provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.

Chaoju Eye Care (朝聚眼科) Pre-IPO: Beware of Value Trap

China

Aier Eye Hospital Group Co., Ltd provides ophthalmological services.  The Company's services include ophthalmological diagnosis and treatments.

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Aier Eye Hospital Group (300015 CH)

Pre-IPO Beijing Airdoc Technology - The Strength and the Concerns

This article mainly analyzed Airdoc Technology in terms of both the strength and the concerns through the perspectives of the business, the...

Xinyao (Criss) Wang

Pre-IPO Yonghe Medical Group - Here Are the Concerns

The article analyzed Yonghe Medical Group in terms of the concerns and challenges that deserve investors’ attention,including the business...

Xinyao (Criss) Wang

Chaoju Eye Care (朝聚眼科) IPO Trading: Fairly Valued for Its Operation

We look at the updates of Chaoju IPO ahead of debut. Sentiments are no that positive for the deal as expected and share allocations for...

Ke Yan, CFA, FRM

Pre-IPO Clarity Medical Group - The Prospects Are Still Not Brighter

This article mainly analyzed the concerns on the business, the operation, the potential, the talent plan, and the outlook of Clarity Medical...

Xinyao (Criss) Wang

Chaoju Eye Care (朝聚眼科) Pre-IPO: Beware of Value Trap

With a geographical focus on the North China and a much smaller scale of operation, we think the company is fairly valued. Its secondary selling is...

Ke Yan, CFA, FRM

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