Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/broncus-holding-corporation" target="_blank" data-smartkarma-citation="entities:33315:1" rel="noopener">Broncus (2216 HK)</a> is a medical device company focused on the development of interventional pulmonology products. The company has announced the terms for its IPO, where it plans to raise net proceeds of HK$1,488.1m (US$191.3m) at the midpoint of the IPO price range of HK$17.95 per share through the issuance of 89.36m (17.0% of the total outstanding shares) shares. At the midpoint of the IPO price of HK$17.95 per share, Broncus will have a market capitalisation of US$9.5bn and post-money enterprise value of HK$7.7bn.The company plans to use approx. 50.0% of the net IPO proceeds on funding its ongoing R&amp;D and planned commercial launches of its core products including InterVapor and RF-II. Broncus plans to use about 28.0% of the IPO proceeds on other products and product candidates, 13.2% of the net IPO proceeds on potential acquisitions and the remainder will be used for working capital and other general corporate purposes.Broncus also has entered into cornerstone investment agreements for an aggregate amount of US$91m (approx. HK$707m) that represents approx. 46% of the offer shares with a number of investors including UBS AM Singapore (US$25m), Lake Bleu Prime (US$20m), Snow Lake Capital (US$10m), CEPHEI (US$10m), Summer Healthcare Fund (US$10m), etc.

Broncus (2216 HK) is a medical device company focused on the development of interventional pulmonology products. The company has announced the terms for its IPO, where it plans to raise net proceeds of HK$1,488.1m (US$191.3m) at the midpoint of the IPO price range of HK$17.95 per share through the issuance of 89.36m (17.0% of the total outstanding shares) shares. At the midpoint of the IPO price of HK$17.95 per share, Broncus will have a market capitalisation of US$9.5bn and post-money enterprise value of HK$7.7bn.The company plans to use approx. 50.0% of the net IPO proceeds on funding its ongoing R&amp;D and planned commercial launches of its core products including InterVapor and RF-II. Broncus plans to use about 28.0% of the IPO proceeds on other products and product candidates, 13.2% of the net IPO proceeds on potential acquisitions and the remainder will be used for working capital and other general corporate purposes.Broncus also has entered into cornerstone investment agreements for an aggregate amount of US$91m (approx. HK$707m) that represents approx. 46% of the offer shares with a number of investors including UBS AM Singapore (US$25m), Lake Bleu Prime (US$20m), Snow Lake Capital (US$10m), CEPHEI (US$10m), Summer Healthcare Fund (US$10m), etc.

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.

Broncus Holding is a leading interventional pulmonology company in China and globally. The company launched book building to raise up to USD 215m via a Hong Kong listing.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 provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.

Broncus Holding is a leading interventional pulmonology company in China and globally. The company launched book building to raise up to USD 215m via a Hong Kong listing.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 provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.

Broncus (堃博医疗) IPO: Long Term Faith Needed

Broncus Holding is a leading interventional pulmonology company in China and globally. The company has commercialized the whole lung access navigation and treatment technology. The company is looking to raise up to USD 300 m via a Hong Kong listing.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. In this note, we will provide our thoughts on pre-money valuation of Broncus.

Broncus Holding is a leading interventional pulmonology company in China and globally. The company has commercialized the whole lung access navigation and treatment technology. The company is looking to raise up to USD 300 m via a Hong Kong listing.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. In this note, we will provide our thoughts on pre-money valuation of Broncus.

Broncus (堃博医疗) Pre-IPO: Thoughts on Valuation

<a href="https://www.smartkarma.com/entities/broncus-holding-corporation" target="_blank" data-smartkarma-citation="entities:33315:1" rel="noopener">Broncus (BRC HK)</a> is a medical device company focused on the development of interventional pulmonology products. Broncus offers five interventional therapeutic products and product candidates for lung diseases (including its core products InterVapor and RF-II) and offers six interventional diagnostic medical consumable products including LungPoint. The company was ranked first in China’s interventional pulmonology navigation device market with a market share of 43.2% based on sales volume and ranked second with a market share of 37.5% measured by sales revenue from 2018-2020.The company has filed for an IPO to list its shares on the Hong Kong Stock Exchange and plans to raise proceeds of about US$250-300m. In this insight, we examine the company’s business model, core products and development pipeline, company financials and market prospects.

Broncus (BRC HK) is a medical device company focused on the development of interventional pulmonology products. Broncus offers five interventional therapeutic products and product candidates for lung diseases (including its core products InterVapor and RF-II) and offers six interventional diagnostic medical consumable products including LungPoint. The company was ranked first in China’s interventional pulmonology navigation device market with a market share of 43.2% based on sales volume and ranked second with a market share of 37.5% measured by sales revenue from 2018-2020.The company has filed for an IPO to list its shares on the Hong Kong Stock Exchange and plans to raise proceeds of about US$250-300m. In this insight, we examine the company’s business model, core products and development pipeline, company financials and market prospects.

Broncus Holdings IPO: Say No to Lung Diseases

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/broncus-holding-corporation" target="_blank" data-smartkarma-citation="entities:33315:1" rel="noopener">Broncus (BRC HK)</a> is a medical device company focused on the development of interventional pulmonology products. Broncus has 17 products and major product candidates under various development stages. The core products are InterVapor, the world’s first and only thermal vapour energy ablation system to treat lung diseases and RF-II, which is the only radiofrequency ablation system that specifically targets lung cancer.Broncus has a credible management team with a commendable commercialisation track record and blue-chip backers. Pre-IPO investors include Qiming Venture Capital, DiNovA Capital, Lake Bleu Capital, FountainVest and <a href="https://www.smartkarma.com/entities/intuitive-surgical-inc" target="_blank" data-smartkarma-citation="entities:15853:1" rel="noopener">Intuitive Surgical (ISRG US)</a>. Broncus is pre-marketing an HKEx IPO to raise $300 million, according to press reports. Broncus currently generates revenue primarily from navigation systems (LungPoint Plus, LungPro, LungPoint and planners) where it ranks second in China with a market share of 37.5% measured by sales revenue for the years ended 2018, 2019 and 2020, according to Frost &amp; Sullivan. However, the market is relatively small as the market size of interventional pulmonology diagnostic consumables in China reached just $26.3 million in 2020, according to Frost &amp; Sullivan. <div class="content-highlight">Broncus’s core products aim for a large addressable market by targeting the pulmonary disease treatment market. The core products' differentiation in terms of technology and target indications increases the probability of success. Overall, we believe that Broncus’ product portfolio is attractive. </div>

Broncus (BRC HK) is a medical device company focused on the development of interventional pulmonology products. Broncus has 17 products and major product candidates under various development stages. The core products are InterVapor, the world’s first and only thermal vapour energy ablation system to treat lung diseases and RF-II, which is the only radiofrequency ablation system that specifically targets lung cancer.Broncus has a credible management team with a commendable commercialisation track record and blue-chip backers. Pre-IPO investors include Qiming Venture Capital, DiNovA Capital, Lake Bleu Capital, FountainVest and Intuitive Surgical (ISRG US). Broncus is pre-marketing an HKEx IPO to raise $300 million, according to press reports. Broncus currently generates revenue primarily from navigation systems (LungPoint Plus, LungPro, LungPoint and planners) where it ranks second in China with a market share of 37.5% measured by sales revenue for the years ended 2018, 2019 and 2020, according to Frost &amp; Sullivan. However, the market is relatively small as the market size of interventional pulmonology diagnostic consumables in China reached just $26.3 million in 2020, according to Frost &amp; Sullivan. Broncus’s core products aim for a large addressable market by targeting the pulmonary disease treatment market. The core products' differentiation in terms of technology and target indications increases the probability of success. Overall, we believe that Broncus’ product portfolio is attractive. 

China

Broncus Holding Corporation offers medical services. The Company provides lung access navigation, lung disease diagnosis, lung disease treatment and other services. Broncus Holding provides its services throughout Hong Kong.

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Broncus (2216 HK)

Broncus IPO Valuation: Overly Ambitious

Our reverse DCF suggests that the revenues need to grow at a CAGR of 86.3% in order to justify the implied IPO valuation of HK$7.68bn which seems...

Shifara Samsudeen, FCMA, CGMA

Broncus (堃博医疗) IPO: Long Term Faith Needed

We provide an update for the book building of Broncus. The company has an interesting product portfolio but the sales ramp-up will be slow.

Ke Yan, CFA, FRM

Broncus (堃博医疗) Pre-IPO: Thoughts on Valuation

We provide key assumptions for the forecast of Broncus' financials and pre-money valuation. The company is fairly valued based on forward EV/Sales...

Ke Yan, CFA, FRM

Broncus Holdings IPO: Say No to Lung Diseases

Broncus' core products have a competitive edge over its competition due to their unique features, helping it to capture more of the growing...

Shifara Samsudeen, FCMA, CGMA

Broncus IPO: Every Breath They Take

Broncus is pre-marketing an HKEx IPO to raise $300m. The core products' differentiation in terms of technology and target indications increases the...

Arun George

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