Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<p>Hang Seng Indexes has increased the number of index shares and free float for <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a>, with no change made to the capping factor.</p><p>This will lead to an increase in the index weight for <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> and passive funds benchmarked to the indices will need to buy the stock at the close of trading on 16 July while selling the other index constituents.</p><p>For July, we estimate passive funds will need to buy 45.52m shares (HK$9.34bn; 2 days of ADV) of <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>. The largest impact of passive selling in terms of days of ADV will be on <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>, <a href="https://www.smartkarma.com/entities/clp-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14433:1" rel="noopener">CLP Holdings (2 HK)</a>, <a href="https://www.smartkarma.com/entities/china-construction-bank-h" target="_blank" data-smartkarma-citation="entities:45:1" rel="noopener">China Construction Bank H (939 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a>.</p><p>However, passive funds will need to sell <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> at the implementation of the quarterly rebalance in September when the capping factor will be lowered to cap the weight of the stock at 8% in the three indices.</p>

Hang Seng Indexes has increased the number of index shares and free float for Alibaba Group (9988 HK) in the Hong Kong Hang Seng Index (HSI INDEX), Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX), with no change made to the capping factor.This will lead to an increase in the index weight for Alibaba Group (9988 HK) and passive funds benchmarked to the indices will need to buy the stock at the close of trading on 16 July while selling the other index constituents.For July, we estimate passive funds will need to buy 45.52m shares (HK$9.34bn; 2 days of ADV) of Alibaba Group (9988 HK). The largest impact of passive selling in terms of days of ADV will be on HSBC Holdings (5 HK), CLP Holdings (2 HK), China Construction Bank H (939 HK), Hang Lung Properties (101 HK) and Country Garden Holdings Co (2007 HK).However, passive funds will need to sell Alibaba Group (9988 HK) at the implementation of the quarterly rebalance in September when the capping factor will be lowered to cap the weight of the stock at 8% in the three indices.

Alibaba (9988 HK): Passive Inflow from HSI, HSCEI, HSTECH Trackers in July

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<p>In recent years, the national policy has provided great support for the development of private healthcare providers. Meanwhile, due to the consumption upgrade, residents have raised their requirements on the level of traditional Chinese medicine (TCM), leading to a growing demand for middle and high-end services from providers. Therefore, some private healthcare providers have developed rapidly by taking advantage of the large market demand and favorable policy support, and are heading for IPO. On June 10, <a href="https://www.smartkarma.com/entities/gushengtang-cayman-ltd" target="_blank" data-smartkarma-citation="entities:33503:1" rel="noopener">Gushengtang (GUS HK), </a>a leading neo-TCM healthcare provider, formally submitted its application for listing on the main board of the HKEX. This insight mainly analyzed the industry characteristics, the business and the concerns of the Company.</p>

In recent years, the national policy has provided great support for the development of private healthcare providers. Meanwhile, due to the consumption upgrade, residents have raised their requirements on the level of traditional Chinese medicine (TCM), leading to a growing demand for middle and high-end services from providers. Therefore, some private healthcare providers have developed rapidly by taking advantage of the large market demand and favorable policy support, and are heading for IPO. On June 10, Gushengtang (GUS HK), a leading neo-TCM healthcare provider, formally submitted its application for listing on the main board of the HKEX. This insight mainly analyzed the industry characteristics, the business and the concerns of the Company.

Pre-IPO Gushengtang - Optimistic About Future Development

Chengdu Quanyuantang Pharmacy Chain / Equity Capital Markets

<p>Since the beginning of 2021, the boom of pharmaceutical e-commerce seems to be continuing. Some leading online pharmacies/retail pharmacies are heading for IPOs. On June 9<sup>th</sup>, 2021, the leading omni-channel smart retail pharmacy <a href="https://www.smartkarma.com/entities/chengdu-quanyuantang-pharmacy-chain-joint-stock-co-ltd" target="_blank" data-smartkarma-citation="entities:33478:1" rel="noopener">Chengdu Quanyuantang Pharmacy Chain (QPC HK)</a> submitted the listing application to the HKEX. As a representative of the innovative retail pharmacy in recent years, Quanyuantang held its ground under the "stress test" in the pandemic this year. Also because Quanyuantang is among the first batch of market participants launching online retail pharmacies in China, the news of its IPO caught the market's attention. So, how about this Company? This insight mainly analyzed the industry characteristics, the business, and the concerns of Quanyuantang. </p>

Since the beginning of 2021, the boom of pharmaceutical e-commerce seems to be continuing. Some leading online pharmacies/retail pharmacies are heading for IPOs. On June 9th, 2021, the leading omni-channel smart retail pharmacy Chengdu Quanyuantang Pharmacy Chain (QPC HK) submitted the listing application to the HKEX. As a representative of the innovative retail pharmacy in recent years, Quanyuantang held its ground under the "stress test" in the pandemic this year. Also because Quanyuantang is among the first batch of market participants launching online retail pharmacies in China, the news of its IPO caught the market's attention. So, how about this Company? This insight mainly analyzed the industry characteristics, the business, and the concerns of Quanyuantang. 

Pre-IPO Quanyuantang Pharmacy Chain - Can Quanyuantang Find Its Own Place in the Fierce Competition?

Neusoft Xikang Healthcare Technology Co Ltd / Equity Capital Markets

Neusoft Xikang Healthcare Technology Co Ltd

<p>On the last day of May, <a href="https://www.smartkarma.com/entities/neusoft-medical-systems-co-ltd" target="_blank" data-smartkarma-citation="entities:33446:1" rel="noopener">Neusoft Medical Systems (NMS HK)</a> and <a href="https://www.smartkarma.com/entities/neusoft-xikang-holdings" target="_blank" data-smartkarma-citation="entities:33447:1" rel="noopener">Neusoft Xikang Holdings (NXH HK)</a> submitted their prospectuses to the HKEX at the same time. Actually, the "Neusoft faction" already has two listed companies in A-share and HKEX respectively, namely <a href="https://www.smartkarma.com/entities/neusoft-corp-a" target="_blank" data-smartkarma-citation="entities:6854:1" rel="noopener">Neusoft Corp A (600718 CH)</a> and <a href="https://www.smartkarma.com/entities/neusoft-education-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29234:1" rel="noopener">Neusoft Education Technology Co. Ltd (9616 HK)</a>, with the market value of RMB12 billion and HK$4 billion respectively by the end of July.6, 2021. If Neusoft Medical and <a href="https://www.smartkarma.com/entities/neusoft-xikang-holdings" target="_blank" data-smartkarma-citation="entities:33447:1" rel="noopener">Neusoft Xikang</a> are successfully listed, there will be four public companies in "Neusoft faction". Behind the active capital operation, how about Neusoft Xikang? This insight mainly analyzed the business model and the concerns of the Company.</p>

On the last day of May, Neusoft Medical Systems (NMS HK) and Neusoft Xikang Holdings (NXH HK) submitted their prospectuses to the HKEX at the same time. Actually, the "Neusoft faction" already has two listed companies in A-share and HKEX respectively, namely Neusoft Corp A (600718 CH) and Neusoft Education Technology Co. Ltd (9616 HK), with the market value of RMB12 billion and HK$4 billion respectively by the end of July.6, 2021. If Neusoft Medical and Neusoft Xikang are successfully listed, there will be four public companies in "Neusoft faction". Behind the active capital operation, how about Neusoft Xikang? This insight mainly analyzed the business model and the concerns of the Company.

Pre-IPO Neusoft Xikang Holdings - The Business Model and 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.

<div>
<a href="https://www.smartkarma.com/entities/linkdoc-technology-limited" target="_blank" data-smartkarma-citation="entities:33499:1" rel="noopener">LinkDoc (LDOC US)</a> is a Chinese healthtech company. LinkDoc consists of LinkCare, a digital care platform for patients with critical diseases, LinkData, an AI-enabled curation system for longitudinal medical data, and LinkSolutions, a data-driven precision life sciences solution platform that helps life sciences companies accelerate clinical research and real-world adoption.</div><div></div><p>LinkDoc is backed by Temasek (11.7% of outstanding shares), NEA Partners (10.2%), China Broadband Capital (9.2%), <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> (8.4%) and MBK Partners (6.3%).</p><div><p>At the mid-point of the proposed IPO price range of $17.50-19.50 per ADS, LinkDoc will have a market cap of $1.6 billion. At the mid-point of the IPO price range, the net proceeds are $182.7 million, below the rumoured $500 million raise target. LinkDoc has received $115 million indications of interest (57.4% of the ADSs being offered) from existing shareholders (Alibaba Health, Lake Bleu, Temasek) worth $60 million and new investors (UBS Asset Management, Hudson Bay, Sage Partners) worth $55 million. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/linkdoc-technology-ipo-initiation-building-with-big-data" target="_blank" data-smartkarma-citation="insights:53384" rel="noopener">LinkDoc Technology IPO Initiation: Building with Big Data</a>, we opined that LinkDoc is a play on China’s healthcare industry rising spend on IT and data services. LinkDoc focuses on oncology and has established the largest online oncology physician and patient engagement community in China. LinkDoc is benefiting from the trend of big data solutions adoption in healthcare by delivering solid growth and steadily reducing loss margins. Overall, we believe that LinkDoc is an attractive play on these market dynamics.</p></div><div>
<div class="content-highlight"><p>Our relative valuation analysis suggests that LinkDoc is fairly valued at the low-end of the IPO price range. Consequently, we are inclined to sit on the sidelines awaiting a more attractive entry point.   </p></div>
<div><p><strong><em>For readers interested in IPOs of upcoming healthtech companies, we highlight: </em></strong></p></div>
<div>
<p><a href="https://www.smartkarma.com/insights/medlive-technology-ipo-initiation-what-s-up-doc" target="_blank" data-smartkarma-citation="insights:53683" rel="noopener">Medlive Technology IPO Initiation: What's Up, Doc?</a> </p>
<p><a href="https://www.smartkarma.com/insights/medlive-technology-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:53879" rel="noopener">Medlive Technology IPO: Valuation Insights</a> </p>
</div>
<div><p><a href="https://www.smartkarma.com/insights/we-doctor-ipo-initiation-patient-revolution" target="_blank" data-smartkarma-citation="insights:50009" rel="noopener">We Doctor IPO Initiation: Patient Revolution</a> </p></div>
</div>


LinkDoc (LDOC US) is a Chinese healthtech company. LinkDoc consists of LinkCare, a digital care platform for patients with critical diseases, LinkData, an AI-enabled curation system for longitudinal medical data, and LinkSolutions, a data-driven precision life sciences solution platform that helps life sciences companies accelerate clinical research and real-world adoption.LinkDoc is backed by Temasek (11.7% of outstanding shares), NEA Partners (10.2%), China Broadband Capital (9.2%), Alibaba Health Information Technology (241 HK) (8.4%) and MBK Partners (6.3%).At the mid-point of the proposed IPO price range of $17.50-19.50 per ADS, LinkDoc will have a market cap of $1.6 billion. At the mid-point of the IPO price range, the net proceeds are $182.7 million, below the rumoured $500 million raise target. LinkDoc has received $115 million indications of interest (57.4% of the ADSs being offered) from existing shareholders (Alibaba Health, Lake Bleu, Temasek) worth $60 million and new investors (UBS Asset Management, Hudson Bay, Sage Partners) worth $55 million. In LinkDoc Technology IPO Initiation: Building with Big Data, we opined that LinkDoc is a play on China’s healthcare industry rising spend on IT and data services. LinkDoc focuses on oncology and has established the largest online oncology physician and patient engagement community in China. LinkDoc is benefiting from the trend of big data solutions adoption in healthcare by delivering solid growth and steadily reducing loss margins. Overall, we believe that LinkDoc is an attractive play on these market dynamics.
Our relative valuation analysis suggests that LinkDoc is fairly valued at the low-end of the IPO price range. Consequently, we are inclined to sit on the sidelines awaiting a more attractive entry point.   
For readers interested in IPOs of upcoming healthtech companies, we highlight: 

Medlive Technology IPO Initiation: What's Up, Doc? 
Medlive Technology IPO: Valuation Insights 

We Doctor IPO Initiation: Patient Revolution 


LinkDoc Technology IPO: Valuation Insights

China

JD Health International Inc. operates drug stores. The Company retails Chinese and Western medicines, nutrition products, health care products, and other products. JD Health International markets its products throughout China.

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JD Health International (6618 HK)

Alibaba (9988 HK): Passive Inflow from HSI, HSCEI, HSTECH Trackers in July

Following an increase in the number of CCASS shares and free float, Alibaba's index shares will be increased. Passive HSI/ HSCEI/ HSTECH trackers...

Brian Freitas

Pre-IPO Gushengtang - Optimistic About Future Development

This article mainly analyzed Gushengtang in terms of the industry characteristics, the business model, the comparison with peers, the potential...

Xinyao (Criss) Wang

Pre-IPO Quanyuantang Pharmacy Chain - Can Quanyuantang Find Its Own Place in the Fierce Competition?

This article mainly analyzed Quanyuantang in terms of the industry characteristics, the business, the comparison with peers, the concerns and the...

Xinyao (Criss) Wang

Pre-IPO Neusoft Xikang Holdings - The Business Model and the Concerns

This article mainly analyzed Neusoft Xikang in terms of the business model, the financial position, and the related concerns.

Xinyao (Criss) Wang

LinkDoc Technology IPO: Valuation Insights

Our valuation analysis suggests that LinkDoc is fairly valued at the low-end of the IPO price range. Consequently, we are inclined to sit on the...

Arun George

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