Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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 Capital Markets

Medlive Technology / Equity Capital Markets

Medlive, the largest medical content platform for physicians in China, plans to raise up to USD 500m via a Hong Kong listing.We think the company has built a great user base of licensed physicians in China, which is rare among internet healthcare companies. Having said that, the monetization from its user base is low. While the near-term revenue growth will still come from healthcare marketing services, the company is expanding into the digital chronic disease management segment which is still an underpenetrated market but it is in an infant stage of development without much of a track record. The company has robust financials but the size is small compared to other internet healthcare players. The company's management team is just OK. Given that it is profitable, there weren't many rounds of capital raising and hence it lacks a long list of pre-IPO investors.

Medlive, the largest medical content platform for physicians in China, plans to raise up to USD 500m via a Hong Kong listing.We think the company has built a great user base of licensed physicians in China, which is rare among internet healthcare companies. Having said that, the monetization from its user base is low. While the near-term revenue growth will still come from healthcare marketing services, the company is expanding into the digital chronic disease management segment which is still an underpenetrated market but it is in an infant stage of development without much of a track record. The company has robust financials but the size is small compared to other internet healthcare players. The company's management team is just OK. Given that it is profitable, there weren't many rounds of capital raising and hence it lacks a long list of pre-IPO investors.

Medlive (医脉通) Pre-IPO: Internet Hospital a Different Ball Game

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

WeDoctor Holdings / Equity Capital Markets

On April 1, <a href="https://www.smartkarma.com/entities/wedoctor-holdings" target="_blank" data-smartkarma-citation="entities:28931:1" rel="noopener">WeDoctor Holdings (1737089D HK)</a> filed its prospectus on the Hong Kong Stock Exchange. As one of the earliest digital medical service platform, We Doctor has been reported to be going public since 2018. Finally, the Company officially started the IPO process this time. Different from <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> and <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> whose core business is online pharmacy business, We Doctor mainly focuses on digital medical and health maintenance service. So how about this business model? This insight mainly analyzed the concerns of the Company that deserve to be paid attention to.

On April 1, WeDoctor Holdings (1737089D HK) filed its prospectus on the Hong Kong Stock Exchange. As one of the earliest digital medical service platform, We Doctor has been reported to be going public since 2018. Finally, the Company officially started the IPO process this time. Different from JD Health (6618 HK) and Alibaba Health Information Technology (241 HK) whose core business is online pharmacy business, We Doctor mainly focuses on digital medical and health maintenance service. So how about this business model? This insight mainly analyzed the concerns of the Company that deserve to be paid attention to.

Pre-IPO We Doctor Holdings - Here Are the Concerns

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.

<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

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

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.

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)

Medlive (医脉通) Pre-IPO: Internet Hospital a Different Ball Game

Medlive has built a great user base of licensed physicians in China, which is rare among internet healthcare companies. Having said that, the...

Ke Yan, CFA, FRM

Pre-IPO We Doctor Holdings - Here Are the Concerns

This article mainly analyzed the concerns on We Doctor in terms of the core resources, business model, financial position, potential competition,...

Xinyao (Criss) Wang

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

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