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

Shanghai Bio-Heart Biological Technology / Equity Capital Markets

Shanghai Bio-heart Biological Technology is a China-based leading interventional cardiovascular device provider. It has two near commercial stage products and is looking to raise up to USD 200m via a Hong Kong listing.In our previous note, we looked at the company's two core products Bioheart and Iberis 2nd. Bioheart is a second generation bioresorbable DES that can be used in the PCI procedure. We think the DES segment is facing very intense competition from the early generation of DES that is non-bioresorbable as well as bioresorbable DES. As the price gap is huge, we are of the view that the product ramp-up will be slow and the patients will be sensitive to the pricing. Another near commercial stage product, Iberis 2nd, is used to treat uncontrollable hypertension. For this, there has been no commercialized product in the market as of now. The  technology aspect that it can help to reduce the blood pressure by ablating the nerve in the kidney artery is interesting but we are skeptical of the market potential given that this is unlikely to be included in the reimbursement list and the patient group has already been non-compliant to the medication. The company's management were mainly ex-employee from Microport Scientific, a leading international medical device player in China. It has a decent investor backing but we think it is short of blockbuster products.In this note, we provide our thoughts on the company's valuation.

Shanghai Bio-heart Biological Technology is a China-based leading interventional cardiovascular device provider. It has two near commercial stage products and is looking to raise up to USD 200m via a Hong Kong listing.In our previous note, we looked at the company's two core products Bioheart and Iberis 2nd. Bioheart is a second generation bioresorbable DES that can be used in the PCI procedure. We think the DES segment is facing very intense competition from the early generation of DES that is non-bioresorbable as well as bioresorbable DES. As the price gap is huge, we are of the view that the product ramp-up will be slow and the patients will be sensitive to the pricing. Another near commercial stage product, Iberis 2nd, is used to treat uncontrollable hypertension. For this, there has been no commercialized product in the market as of now. The  technology aspect that it can help to reduce the blood pressure by ablating the nerve in the kidney artery is interesting but we are skeptical of the market potential given that this is unlikely to be included in the reimbursement list and the patient group has already been non-compliant to the medication. The company's management were mainly ex-employee from Microport Scientific, a leading international medical device player in China. It has a decent investor backing but we think it is short of blockbuster products.In this note, we provide our thoughts on the company's valuation.

Shanghai Bio-Heart (上海百心安) Pre-IPO: Thoughts on Valuation

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

On April 28, <a href="https://www.smartkarma.com/entities/lepu-biopharma-co-ltd" target="_blank" data-smartkarma-citation="entities:33231:1" rel="noopener">Lepu Biopharma (LBP HK)</a>, a subsidiary of <a href="https://www.smartkarma.com/entities/lepu-medical-technology-a" target="_blank" data-smartkarma-citation="entities:16654:1" rel="noopener">Lepu Medical Technology A (300003 CH)</a>, submitted its application to the main board of the Hong Kong Stock Exchange for listing. Actually, many companies in the medical device industry are good at capital operation, such as M&amp;A or spin-off and listing, which has been reflected in the leading medical device companies such as <a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray Bio-Medical Electronics (300760 CH)</a> and <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>. However, Lepu Medical is the only one that enters the fields of both drugs and preparations, and according to the pipeline, the focus is not only on generic drugs, but also on biological drugs of higher competitive dimension (e.g. Lepu Biopharma is in this field.). It is also worth mentioning that this is the second company of Lepu factions to be listed in Hong Kong. The first one was <a href="https://www.smartkarma.com/entities/pw-medtech-group-ltd" target="_blank" data-smartkarma-citation="entities:9891:1" rel="noopener">Pw Medtech (1358 HK)</a> (Zhang yue’e is Pu Zhongjie’s wife) and the share price has been very weak since its listing. So can Lepu Biopharma have a better performance?

On April 28, Lepu Biopharma (LBP HK), a subsidiary of Lepu Medical Technology A (300003 CH), submitted its application to the main board of the Hong Kong Stock Exchange for listing. Actually, many companies in the medical device industry are good at capital operation, such as M&amp;A or spin-off and listing, which has been reflected in the leading medical device companies such as Shenzhen Mindray Bio-Medical Electronics (300760 CH) and Microport Scientific (853 HK). However, Lepu Medical is the only one that enters the fields of both drugs and preparations, and according to the pipeline, the focus is not only on generic drugs, but also on biological drugs of higher competitive dimension (e.g. Lepu Biopharma is in this field.). It is also worth mentioning that this is the second company of Lepu factions to be listed in Hong Kong. The first one was Pw Medtech (1358 HK) (Zhang yue’e is Pu Zhongjie’s wife) and the share price has been very weak since its listing. So can Lepu Biopharma have a better performance?

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

On Feb. 26, 2021, <a href="https://www.smartkarma.com/entities/shanghai-bio-heart-biological-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32174:1" rel="noopener">Shanghai Bio-Heart Biological Technology (BHT HK)</a> applied to list on the main board of the Hong Kong Stock Exchange. In China, cardiovascular medical device market is a very promising market with large growth potential. Domestic leading companies include <a href="https://www.smartkarma.com/entities/lepu-medical-technology-a" target="_blank" data-smartkarma-citation="entities:16654:1" rel="noopener">Lepu Medical Technology A (300003 CH)</a> and <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>. Bio-heart’s business mainly focuses on bioresorbable scaffolds (BRS) and renal denervation (RDN). So how about Bio-heart compared with other strong players in the market? The following mainly analyzed both the strengths and the concerns of the Company.

On Feb. 26, 2021, Shanghai Bio-Heart Biological Technology (BHT HK) applied to list on the main board of the Hong Kong Stock Exchange. In China, cardiovascular medical device market is a very promising market with large growth potential. Domestic leading companies include Lepu Medical Technology A (300003 CH) and Microport Scientific (853 HK). Bio-heart’s business mainly focuses on bioresorbable scaffolds (BRS) and renal denervation (RDN). So how about Bio-heart compared with other strong players in the market? The following mainly analyzed both the strengths and the concerns of the Company.

Pre-IPO Shanghai Bio-Heart Biological Technology - Here Are the Strength and Concerns

Shanghai Bio-heart Biological Technology is a China-based leading interventional cardiovascular device provider. It has two near commercial stage products and is looking to raise up to USD 200m via a Hong Kong listing.We look at the company's two core products Bioheart and Iberis 2nd. Bioheart is a second generation bioresorbable DES that can be used in the PCI procedure. We think the DES segment is facing very intense competition from the early generation of DES that is non-bioresorbable as well as bioresorbable DES. As the price gap is huge, we are of the view that the product ramp-up will be slow and the patients will be sensitive to the pricing. Another near commercial stage product, Iberis 2nd, is used to treat uncontrollable hypertension. For this, there has been no commercialized product in the market as of now. The technology aspect that it can help to reduce the blood pressure by ablating the nerve in the kidney artery is interesting but we are skeptical of the market potential given that this is unlikely to be included in the reimbursement list and the patient group has already been non-compliant to the medication. The company's management were mainly ex-employee from Microport Scientific, a leading international medical device player in China. It has a decent investor backing but we think it is short of blockbuster products.

Shanghai Bio-heart Biological Technology is a China-based leading interventional cardiovascular device provider. It has two near commercial stage products and is looking to raise up to USD 200m via a Hong Kong listing.We look at the company's two core products Bioheart and Iberis 2nd. Bioheart is a second generation bioresorbable DES that can be used in the PCI procedure. We think the DES segment is facing very intense competition from the early generation of DES that is non-bioresorbable as well as bioresorbable DES. As the price gap is huge, we are of the view that the product ramp-up will be slow and the patients will be sensitive to the pricing. Another near commercial stage product, Iberis 2nd, is used to treat uncontrollable hypertension. For this, there has been no commercialized product in the market as of now. The technology aspect that it can help to reduce the blood pressure by ablating the nerve in the kidney artery is interesting but we are skeptical of the market potential given that this is unlikely to be included in the reimbursement list and the patient group has already been non-compliant to the medication. The company's management were mainly ex-employee from Microport Scientific, a leading international medical device player in China. It has a decent investor backing but we think it is short of blockbuster products.

Shanghai Bio-Heart (上海百心安) Pre-IPO: Needs a Long Runway

Equity Bottom-Up

Lepu Medical Technology A / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/lepu-medical-technology-a" target="_blank" data-smartkarma-citation="entities:16654:1" rel="noopener">Lepu Medical Technology A (300003 CH)</a> did not perform well in 2020/2H mainly due to the intensive procurement of high-value medical consumables (the coronary stents). The market was concerned about the Company's uncertainty in business and subsequent decline in performance, leading to the continuous decrease of its stock price. Over the past six months, the share price of Lepu fell from around RMB47/share in July last year to around RMB26/share. However, the stock price has rebounded recently, reaching as high as RMB34.68/share. So is Lepu still worth looking forward to in the long term?

Lepu Medical Technology A (300003 CH) did not perform well in 2020/2H mainly due to the intensive procurement of high-value medical consumables (the coronary stents). The market was concerned about the Company's uncertainty in business and subsequent decline in performance, leading to the continuous decrease of its stock price. Over the past six months, the share price of Lepu fell from around RMB47/share in July last year to around RMB26/share. However, the stock price has rebounded recently, reaching as high as RMB34.68/share. So is Lepu still worth looking forward to in the long term?

Lepu Medical Technology A (300003 CH) - Does Not Have High Moat

China

Lepu Medical Technology (Beijing) Co., Ltd. develops, produces and sells medical devices and parts.  The Company also offers medical devices consulting services.  The company's products include stent system and blockage system.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Lepu Medical Technology A (300003 CH)

Shanghai Bio-Heart (上海百心安) Pre-IPO: Thoughts on Valuation

We provide a pre-money based valuation for Shanghai Bio-heart listing. We forecast the sales for its BRS and RDN respectively. We would re-iterate...

Ke Yan, CFA, FRM

Pre-IPO Lepu Biopharma - There Are Still Many Uncertainties

This article analyzed Lepu Biopharma in terms of its core product candidates in the pipeline, the challenges, concerns and future outlook for this...

Xinyao (Criss) Wang

Pre-IPO Shanghai Bio-Heart Biological Technology - Here Are the Strength and Concerns

The article analyzed Shanghai Bio-Heart Biological in terms of strength (core product, market potential) and concerns (competition, intensive...

Xinyao (Criss) Wang

Shanghai Bio-Heart (上海百心安) Pre-IPO: Needs a Long Runway

The company's management were mainly from Microport Scientific. It has decent investor backing but we think it is short of blockbuster products.

Ke Yan, CFA, FRM

Lepu Medical Technology A (300003 CH) - Does Not Have High Moat

This article analyzed Lepu Medical's poor performance in the past six months, deep dive its development mode, financial position, and indicate...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)