APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

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

Beijing Tongrentang Co A / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beijing-tongrentang-co-ltd" target="_blank" data-smartkarma-citation="entities:20167:1" rel="noopener">Beijing Tongrentang Co A (600085 CH)</a> is looking to raise up to US$114m in its upcoming Hong Kong IPO.</li>
<li>Beijing Tong Ren Tang Healthcare Investment is China’s largest non-public TCM hospital group by patient visits.</li>
<li>In this note, we examine the IPO dynamics, and look at the firm’s valuation.</li>
</ul>



Beijing Tongrentang Co A (600085 CH) is looking to raise up to US$114m in its upcoming Hong Kong IPO.
Beijing Tong Ren Tang Healthcare Investment is China’s largest non-public TCM hospital group by patient visits.
In this note, we examine the IPO dynamics, and look at the firm’s valuation.


Aequitas: Beijing Tong Ren Tang IPO - Weak Track Record, Too Expensive Relative to Peers

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>By comparing medical insurance expenditure and income, as well as the pharmaceutical manufacturing revenues and profits for the same period, we find something interesting. </li>
<li>Due to COVID-19, the sales of TCM in 22Q4 and 23Q1 surged. But in 23Q2-Q4, people's demand could change. Therefore, the performance of related TCM company would also switch. </li>
<li>New generation weight loss drugs represented by Semaglutide would change the logic and supply-demand relationship of the entire market. This is a situation that investors need to be aware of.</li>
</ul>


By comparing medical insurance expenditure and income, as well as the pharmaceutical manufacturing revenues and profits for the same period, we find something interesting. 
Due to COVID-19, the sales of TCM in 22Q4 and 23Q1 surged. But in 23Q2-Q4, people's demand could change. Therefore, the performance of related TCM company would also switch. 
New generation weight loss drugs represented by Semaglutide would change the logic and supply-demand relationship of the entire market. This is a situation that investors need to be aware of.


China Healthcare Weekly (Jul.14)-TCM Demand Switch, 8% Benchmark Growth Rate, GLP-1 Change Game Rule

<ul>
<li>Policies will determine the development direction of the industry, which would then determine the profit model of companies. Companies that align with policy direction would outperform in the coming cycle.</li>
<li>The prosperity of the industry would determine the development trend of companies. For China healthcare, without a significant policy shift, it would be difficult for industry beta to emerge.</li>
<li>Domestic companies cannot achieve successful commercialization/internationalization mainly because they don’t have excellent enough products. It must be innovation that keeps companies alive and then thrive, rather than relying on policy changes.</li>
</ul>


Policies will determine the development direction of the industry, which would then determine the profit model of companies. Companies that align with policy direction would outperform in the coming cycle.
The prosperity of the industry would determine the development trend of companies. For China healthcare, without a significant policy shift, it would be difficult for industry beta to emerge.
Domestic companies cannot achieve successful commercialization/internationalization mainly because they don’t have excellent enough products. It must be innovation that keeps companies alive and then thrive, rather than relying on policy changes.


The Cyclicality of China Healthcare - Policy Environment, the Industry, and Investment Opportunities

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

Shenton Research

Shenton 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.

Quantitative Analysis

<ul>
<li>We analyzed the changes in margin trading positions of A-share stocks as of Aug 7th. The aggregated net margin trading position is USD352,973m.</li>
<li>We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.</li>
<li>We highlight net margin buy/sell changes in Yangtze Power, Wuliangye, Mindray, VICTORY GIANT TECHNOLOGY (HUIZHOU), BYD.</li>
</ul>


We analyzed the changes in margin trading positions of A-share stocks as of Aug 7th. The aggregated net margin trading position is USD352,973m.
We tabulate league tables for top/bottom net long/short of margin trading by value, net margin buy as multiple of ADT.
We highlight net margin buy/sell changes in Yangtze Power, Wuliangye, Mindray, VICTORY GIANT TECHNOLOGY (HUIZHOU), BYD.


A-Share Margin Trading Weekly (Aug 7th): Yangtze Power, Wuliangye, Mindray, BYD

<ul>
<li>The driving force for the big performance growth of domestic culture medium companies mainly come from the logic of import substitution. We think there are investment opportunities in this industry.</li>
<li>Due to soaring costs of electricity prices, raw material prices and transportation costs, European pharmaceutical plants are facing difficulties in sustaining production. Chinese API enterprises could face expansion opportunities.</li>
<li>For industries that have been recognized by investors,the market begins to think in terms of long logic from a broader perspective rather than simply tracking the performance of individual companies.</li>
</ul>


The driving force for the big performance growth of domestic culture medium companies mainly come from the logic of import substitution. We think there are investment opportunities in this industry.
Due to soaring costs of electricity prices, raw material prices and transportation costs, European pharmaceutical plants are facing difficulties in sustaining production. Chinese API enterprises could face expansion opportunities.
For industries that have been recognized by investors,the market begins to think in terms of long logic from a broader perspective rather than simply tracking the performance of individual companies.


China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

China

Beijing Tongrentang Co., Ltd. develops, manufactures, and markets Chinese traditional medicines and medicinal wines.  The Company also operates pharmaceutical retail businesses and provides consulting services.

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Beijing Tongrentang Co A (600085 CH)

Aequitas: Beijing Tong Ren Tang IPO - Weak Track Record, Too Expensive Relative to Peers

Beijing Tong Ren Tang Healthcare Investment is looking to raise up to US$114m in its upcoming Hong Kong IPO. In this note, we examine the IPO...

Nicholas Tan

China Healthcare Weekly (Jul.14)-TCM Demand Switch, 8% Benchmark Growth Rate, GLP-1 Change Game Rule

8% could be a benchmark growth rate for future healthcare industry. People's TCM demand switch will lead to changes in TCM company's performance....

Xinyao (Criss) Wang

The Cyclicality of China Healthcare - Policy Environment, the Industry, and Investment Opportunities

Without industry beta, China healthcare companies still have opportunity to achieve countercyclical breakthrough.Investors need to be in line with...

Xinyao (Criss) Wang

China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

Culture medium will have a rapid growth period. Due to high costs, EU Pharma face difficulty in sustaining production.Mr Market begins to think...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Aequitas: Beijing Tong Ren Tang IPO - Weak Track Record, Too Expensive Relative to Peers

Beijing Tong Ren Tang Healthcare Investment is looking to raise up to US$114m in its upcoming Hong Kong IPO. In this note, we examine the IPO...

Nicholas Tan

China Healthcare Weekly (Jul.14)-TCM Demand Switch, 8% Benchmark Growth Rate, GLP-1 Change Game Rule

8% could be a benchmark growth rate for future healthcare industry. People's TCM demand switch will lead to changes in TCM company's performance....

Xinyao (Criss) Wang

The Cyclicality of China Healthcare - Policy Environment, the Industry, and Investment Opportunities

Without industry beta, China healthcare companies still have opportunity to achieve countercyclical breakthrough.Investors need to be in line with...

Xinyao (Criss) Wang

A-Share Margin Trading Weekly (Aug 7th): Yangtze Power, Wuliangye, Mindray, BYD

We analyzed A-share margin trading positions report for the past week and highlighted Yangtze Power, Wuliangye, Mindray, VICTORY GIANT TECHNOLOGY...

Ke Yan, CFA, FRM

China Healthcare Weekly (Nov4)-Opportunity in Culture Medium, European API, Long Logic of Investment

Culture medium will have a rapid growth period. Due to high costs, EU Pharma face difficulty in sustaining production.Mr Market begins to think...

Xinyao (Criss) Wang