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

<ul>
<li>Mirxes, a Singapore-based clinical-stage biotechnology company, launched its IPO to raise up to US$139m via a Hong Kong listing.</li>
<li>We look at the deal dynamics and latest developments in the early cancer screening sector in China.</li>
<li>We are of the view that there's little fundamentals supporting that valuation. Precision oncology companies have not done well in China. </li>
</ul>


Mirxes, a Singapore-based clinical-stage biotechnology company, launched its IPO to raise up to US$139m via a Hong Kong listing.
We look at the deal dynamics and latest developments in the early cancer screening sector in China.
We are of the view that there's little fundamentals supporting that valuation. Precision oncology companies have not done well in China. 


Mirxes IPO: Valuation Without Sensible Fundamentals

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

<ul>
<li>In June of 2024, GRAIL, a market leader in early cancer detection, spun off from Illumina into an independent publicly traded company.</li>
<li>Following the spin-off, Illumina retains up to ~15% ownership interest in GRAIL and continues to fund GRAIL’s operations and R&amp;D with disposal funding of ~$974M.</li>
<li>I view GRAIL as a market leader in the MCED testing market and uniquely positioned to be very effective in detecting some of the most aggressive early-stage cancers.</li>
</ul>


In June of 2024, GRAIL, a market leader in early cancer detection, spun off from Illumina into an independent publicly traded company.
Following the spin-off, Illumina retains up to ~15% ownership interest in GRAIL and continues to fund GRAIL’s operations and R&amp;D with disposal funding of ~$974M.
I view GRAIL as a market leader in the MCED testing market and uniquely positioned to be very effective in detecting some of the most aggressive early-stage cancers.


GRAIL: Detecting Early-Stage Cancers With Galleri Test, A Significant Market Opportunity

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>Although UGenix is a genetic technology company focusing on prenatal testing/precision oncology, it was the large-scale COVID-19 testing demand that made UGenix's overall revenue grow rapidly, which, however, is unsustainable.</li>
<li>NIPT market size is far less than expected. The clinical need for NGS has not developed as rigid demand. Restrictions on companion diagnosis pricing indicate market space would be compressed.</li>
<li>The business of both prenatal testing and precision oncology are not easy. Due to uncertain commercialization outlook/profitability and other negative factors, UGenix’s stock price after IPO could underperform.</li>
</ul>


Although UGenix is a genetic technology company focusing on prenatal testing/precision oncology, it was the large-scale COVID-19 testing demand that made UGenix's overall revenue grow rapidly, which, however, is unsustainable.
NIPT market size is far less than expected. The clinical need for NGS has not developed as rigid demand. Restrictions on companion diagnosis pricing indicate market space would be compressed.
The business of both prenatal testing and precision oncology are not easy. Due to uncertain commercialization outlook/profitability and other negative factors, UGenix’s stock price after IPO could underperform.


Pre-IPO UGenix Biotech - Future Growth Potential Is Highly Uncertain

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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/genetron-holdings-ltd" target="_blank" data-smartkarma-citation="entities:28435:1" rel="noopener">Genetron Holdings Ltd (GTH US)</a> shareholders will vote on the consortium’s US$4.08 per ADS offer on 21 February. The offer is light in comparison to historical trading ranges.</li>
<li>Completion is conditional on shareholder approval, dissenting shareholders representing less than 15% of outstanding shares and regulatory approvals (NDRC, MoC and SAFE). </li>
<li>Despite the light offer, the completion conditions should be met. At the last close price and end of March completion, the gross and annualised spread is 7.7% and 45.5%, respectively.</li>
</ul>



Genetron Holdings Ltd (GTH US) shareholders will vote on the consortium’s US$4.08 per ADS offer on 21 February. The offer is light in comparison to historical trading ranges.
Completion is conditional on shareholder approval, dissenting shareholders representing less than 15% of outstanding shares and regulatory approvals (NDRC, MoC and SAFE). 
Despite the light offer, the completion conditions should be met. At the last close price and end of March completion, the gross and annualised spread is 7.7% and 45.5%, respectively.


Genetron (GTH US): Wide Spread Ahead of the 21 February Vote

<ul>
<li>The clinical need for NGS hasn't developed as rigid demand due to high cost, difficult operation, high requirements on hospitals/personnel, etc. It takes time for NGS to improve market penetration.</li>
<li>Genecast’s LDT business could face compliance issue.Its in-hospital business has lower gross margin.Increasing R&amp;D expenditure is inevitable since products need to get approval by regulatory authorities, putting pressure on profitability. </li>
<li>Burning Rock is in a leading position in NGS field, but its market value is quite low. We advise investors to be prepared for valuations to fall short of expectations.</li>
</ul>


The clinical need for NGS hasn't developed as rigid demand due to high cost, difficult operation, high requirements on hospitals/personnel, etc. It takes time for NGS to improve market penetration.
Genecast’s LDT business could face compliance issue.Its in-hospital business has lower gross margin.Increasing R&amp;D expenditure is inevitable since products need to get approval by regulatory authorities, putting pressure on profitability. 
Burning Rock is in a leading position in NGS field, but its market value is quite low. We advise investors to be prepared for valuations to fall short of expectations.


Pre-IPO Genecast Group - NGS Still Has Long Way to Go; Valuation Performance Is Worrying

China

Burning Rock Biotech Limited operates as a biotech company. The Company discovers and develops diagnositcs solutions for precision medicine in oncology. Burning Rock Biotech serves customers in China.

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Burning Rock Biotech (BNR US)

Mirxes IPO: Valuation Without Sensible Fundamentals

Singapore biotech company Mirexes launches IPO in Hong Kong to raise up to $139m, but little fundamentals support the valuation, even in blue sky...

Ke Yan, CFA, FRM

GRAIL: Detecting Early-Stage Cancers With Galleri Test, A Significant Market Opportunity

GRAIL, a fast-growing Galleri test maker, spun off from Illumina in June. The population-scale MCED screening test identifies 50+ types of cancer...

Andrei Zakharov

Pre-IPO UGenix Biotech - Future Growth Potential Is Highly Uncertain

Due to gloomy commercialization outlook, it is challenging for UGenix to receive decent valuation premium after IPO. As the COVID-19 dividend...

Xinyao (Criss) Wang

Genetron (GTH US): Wide Spread Ahead of the 21 February Vote

Shareholders overwhelmingly approve the privatisation proposal. Turnout was at 75.4% of outstanding shares. Among these shareholders, 99.9% voted...

Arun George

Pre-IPO Genecast Group - NGS Still Has Long Way to Go; Valuation Performance Is Worrying

Genecast’s business faces different challenges as NGS hasn't developed as rigid demand. It's difficult for Genecast to make profits in the short...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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Mirxes IPO: Valuation Without Sensible Fundamentals

​Singapore biotech company Mirexes launches IPO in Hong Kong to raise up to $139m, but little fundamentals support the valuation, even in blue sky...

Ke Yan, CFA, FRM

GRAIL: Detecting Early-Stage Cancers With Galleri Test, A Significant Market Opportunity

GRAIL, a fast-growing Galleri test maker, spun off from Illumina in June. The population-scale MCED screening test identifies 50+ types of cancer...

Andrei Zakharov

Pre-IPO UGenix Biotech - Future Growth Potential Is Highly Uncertain

Due to gloomy commercialization outlook, it is challenging for UGenix to receive decent valuation premium after IPO. As the COVID-19 dividend...

Xinyao (Criss) Wang

Genetron (GTH US): Wide Spread Ahead of the 21 February Vote

Shareholders overwhelmingly approve the privatisation proposal. Turnout was at 75.4% of outstanding shares. Among these shareholders, 99.9% voted...

Arun George

Pre-IPO Genecast Group - NGS Still Has Long Way to Go; Valuation Performance Is Worrying

Genecast’s business faces different challenges as NGS hasn't developed as rigid demand. It's difficult for Genecast to make profits in the short...

Xinyao (Criss) Wang

Singapore biotech company Mirexes launches IPO in Hong Kong to raise up to $139m, but little fundamentals support the valuation, even in blue sky...