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

JD Health International  / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (JDH HK)</a> is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. The rumoured valuation is a significant increase to the August 2020 Series B round - a raise of $914 million at a $19.2 billion valuation. <div class="content-highlight">In <a href="https://www.smartkarma.com/insights/jd-health-ipo-initiation-e-ppointments" target="_blank" data-smartkarma-citation="insights:45106" rel="noopener">JD Health IPO Initiation: E-Ppointments</a>, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In <a href="https://www.smartkarma.com/insights/jd-health-ipo-phip-new-data-points-and-peer-comparison" target="_blank" data-smartkarma-citation="insights:45377" rel="noopener">JD Health IPO: PHIP New Data Points and Peer Comparison</a>, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In this note, we take a first look at JD Health's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.</div>

JD Health (JDH HK) is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. The rumoured valuation is a significant increase to the August 2020 Series B round - a raise of $914 million at a $19.2 billion valuation. In JD Health IPO Initiation: E-Ppointments, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In JD Health IPO: PHIP New Data Points and Peer Comparison, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In this note, we take a first look at JD Health's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

1.Industry viewpoints:<ul>
<li>Recently, the National Medical Products Administration has released a new policy (draft version) about the online drug sales.</li>
<li>Vaccine is a hot topic in 2020, so let’s talk about vaccine.</li>
<li>The upsurge in the application of AI in medical imaging in China provides a new direction for the development, which may be the most promising field for China to surpass foreign countries.</li>
</ul>2. Company news:News about the updated progress of new drugs and the marketing approval of new products from <a href="https://www.smartkarma.com/entities/betta-pharmaceuticals-co-ltd" target="_blank" data-smartkarma-citation="entities:25883:1" rel="noopener">Betta Pharmaceuticals (300558 CH)</a>, <a href="https://www.smartkarma.com/entities/beigene-ltd" target="_blank" data-smartkarma-citation="entities:27352:1" rel="noopener">BeiGene Ltd (6160 HK)</a> , Kangpu Biopharmaceuticals, and <a href="https://www.smartkarma.com/entities/venus-medtech-hangzhou-inc" target="_blank" data-smartkarma-citation="entities:28257:1" rel="noopener">Venus MedTech (2500 HK).</a>3. Market review:Last week, stock price for healthcare sector in A share decreased 1.43%, while CSI 300 increased 1.78% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

1.Industry viewpoints:
Recently, the National Medical Products Administration has released a new policy (draft version) about the online drug sales.
Vaccine is a hot topic in 2020, so let’s talk about vaccine.
The upsurge in the application of AI in medical imaging in China provides a new direction for the development, which may be the most promising field for China to surpass foreign countries.
2. Company news:News about the updated progress of new drugs and the marketing approval of new products from Betta Pharmaceuticals (300558 CH), BeiGene Ltd (6160 HK) , Kangpu Biopharmaceuticals, and Venus MedTech (2500 HK).3. Market review:Last week, stock price for healthcare sector in A share decreased 1.43%, while CSI 300 increased 1.78% over the same period of time.4. Risk Disclosure:Policy risk, R&amp;D risk, Company risk and COVID-19 risk.

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion. Our analysis indicates that the online pharmacy business could be worth US$10 billion assuming some degree of margin improvement. Further, the online healthcare services business will have to penetrate roughly 2% of healthcare services spending to justify the balance (US$10 billion) valuation, which we think is achievable.

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion. Our analysis indicates that the online pharmacy business could be worth US$10 billion assuming some degree of margin improvement. Further, the online healthcare services business will have to penetrate roughly 2% of healthcare services spending to justify the balance (US$10 billion) valuation, which we think is achievable.  

JD Health: Framing the Valuation Discussion

<a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (JDH HK)</a> is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health has filed its PHIP and kicked off pre-marketing for a Hong Kong IPO to raise around $3 billion.  <div class="content-highlight">In <a href="https://www.smartkarma.com/insights/jd-health-ipo-initiation-e-ppointments" target="_blank" data-smartkarma-citation="insights:45106" rel="noopener">JD Health IPO Initiation: E-Ppointments</a>, we stated that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. JD Health will tend to be compared to its listed peers – <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>/PAHTG, <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/111-inc" target="_blank" data-smartkarma-citation="entities:27412:1" rel="noopener">111 Inc (YI US)</a>. The new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. </div>

JD Health (JDH HK) is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health has filed its PHIP and kicked off pre-marketing for a Hong Kong IPO to raise around $3 billion.  In JD Health IPO Initiation: E-Ppointments, we stated that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. JD Health will tend to be compared to its listed peers – Ping An Healthcare and Technology Company Limited (1833 HK)/PAHTG, Alibaba Health Information Technology (241 HK) and 111 Inc (YI US). The new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. 

JD Health IPO: PHIP New Data Points and Peer Comparison

The development of a leading online healthcare services business not only is a critical component of JD Health’s strategy, but also a key support to the rumored listing valuation of US$20 billion. In contrast with the retail pharmacy business, the company's online healthcare services segment is in its infancy. In fact, the industry has yet to generate profits. This Insight takes a ground-level view of the online healthcare services sector using academic research and competitors' data to provide tools to evaluate JD Health's and its peers' execution.

The development of a leading online healthcare services business not only is a critical component of JD Health’s strategy, but also a key support to the rumored listing valuation of US$20 billion. In contrast with the retail pharmacy business, the company's online healthcare services segment is in its infancy. In fact, the industry has yet to generate profits. This Insight takes a ground-level view of the online healthcare services sector using academic research and competitors' data to provide tools to evaluate JD Health's and its peers' execution.

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)

JD Health IPO: Valuation First Look

JD Health is seeking to raise $4 billion at a $29 billion valuation, according to IFR. Overall, based on valuation analysis, we think that the...

Arun George

China Healthcare Weekly (Nov. 20)

The article summarized the new healthcare policy released, major industry viewpoints, company news and capital market review in China healthcare...

Xinyao (Criss) Wang

JD Health: Framing the Valuation Discussion

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion with a buildup by each business...

Kemp Dolliver, CFA

JD Health IPO: PHIP New Data Points and Peer Comparison

JD Health has kicked off pre-marketing for an HK IPO to raise around $3 billion. The new PHIP data points along with our peer analysis reinforce...

Arun George

JD Health: Examining the Infant

This Insight offers a ground-level view of the nascent online healthcare services sector using academic research and other sources to evaluate the...

Kemp Dolliver, CFA

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