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.

Equity Capital Markets

Novotech Holdings / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/novotech-health-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33411:1" rel="noopener">Novotech Holdings (NVT HK)</a> is a global contract research organisation (CRO). Novotech is the third-largest Asia-Pacific-based CRO and the largest biotech-specialist CRO in the Asia-Pacific region, both in terms of revenue in 2020, according to Frost &amp; Sullivan. The controlling shareholder is TPG and the other shareholders include GIC, Kaiser Foundation Hospitals and Sequoia Capital. Novotech has started pre-marketing an HKEx IPO to raise $0.5-1.0 billion, according to press reports.</p></div><div>
<div><p>In <a href="https://www.smartkarma.com/insights/novotech-health-ipo-initiation-on-demand-science" target="_blank" data-smartkarma-citation="insights:57198" rel="noopener">Novotech Health IPO Initiation: On-Demand Science</a>, we noted that, unlike other H-listed CRO peers, Novotech gives investors an avenue to gain exposure to the broader Asia-Pacific CRO industry. We concluded that Novotech’s fundamentals are solid and the IPO is worth a look for investors willing to brave the current weak sentiment on HKEx IPOs. </p></div>
<div><div><p>In <a href="https://www.smartkarma.com/insights/novotech-health-ipo-a-solid-start-to-2021" target="_blank" data-smartkarma-citation="insights:57255" rel="noopener">Novotech Health IPO: A Solid Start to 2021</a>, we examined the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we maintained our view that the fundamentals look attractive. </p></div></div>
</div><div><div><div class="content-highlight"><p>In this note, we present our forecasts and take the first look at Novotech's potential valuation range. </p></div></div></div>

Novotech Holdings (NVT HK) is a global contract research organisation (CRO). Novotech is the third-largest Asia-Pacific-based CRO and the largest biotech-specialist CRO in the Asia-Pacific region, both in terms of revenue in 2020, according to Frost &amp; Sullivan. The controlling shareholder is TPG and the other shareholders include GIC, Kaiser Foundation Hospitals and Sequoia Capital. Novotech has started pre-marketing an HKEx IPO to raise $0.5-1.0 billion, according to press reports.
In Novotech Health IPO Initiation: On-Demand Science, we noted that, unlike other H-listed CRO peers, Novotech gives investors an avenue to gain exposure to the broader Asia-Pacific CRO industry. We concluded that Novotech’s fundamentals are solid and the IPO is worth a look for investors willing to brave the current weak sentiment on HKEx IPOs. 
In Novotech Health IPO: A Solid Start to 2021, we examined the PHIP which discloses the 1Q21 results along with additional disclosures and recent developments. Overall, we maintained our view that the fundamentals look attractive. 
In this note, we present our forecasts and take the first look at Novotech's potential valuation range. 

Novotech Health IPO: Valuation First-Look

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.</p>

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections. Additionally, 10-year yields in the US and Germany are breaking down below key support. These deteriorating market dynamics raise concerns of a deeper pullback, however other indicators remain largely positive. As a result, we continue to see a mixed, but overall constructive market. Actionable themes highlighted in today's report include Health Care and Real Estate.

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

<p>The weight of the evidence continues to support our mixed, but overall constructive outlook. Below we outline the basis for our outlook, and we also highlight opportunities within Real Estate and Health Care.</p>

The weight of the evidence continues to support our mixed, but overall constructive outlook. Below we outline the basis for our outlook, and we also highlight opportunities within Real Estate and Health Care.

Global Equity Strategy: Opportunities In Real Estate and Health Care

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Equity Bottom-Up

<p>Over the next few weeks/months, we will be initiating coverage on a few key players in the Global CDMO space, where we see interesting growth trends. Our focus in particular will be on biopharma focused CDMOs where the processes are highly technology driven leading to significant barriers to entry. These CDMOs are also seeing strong growth backed by accelerated growth in biologics, increased outsourcing and potential market share consolidation among the large biopharma CDMO players.</p>
<p>We begin with our deep-dive coverage on <a href="https://www.smartkarma.com/entities/lonza-group-ag" target="_blank" data-smartkarma-citation="entities:22580:1" rel="noopener">Lonza Group AG (LONN VX)</a>, a global leader in the CDMO space with strong offerings in the bio-pharma CDMO space. Lonza has a market-leading presence across biopharma and small molecules end-to-end CDMO offerings. It has a strong operational and regulatory track record built over the past many decades that has enabled it to establish a wide-reaching client base. Lonza was founded in 1897 and is based out of Switzerland. Its operations and client reach span globally.</p>
<h3>Insight Flow</h3>
<ul>
<li>Business Background</li>
<li>Investment Thesis</li>
<li>Valuation</li>
<li>Catalysts</li>
<li>Risks</li>
<li>Conclusion</li>
</ul>

Over the next few weeks/months, we will be initiating coverage on a few key players in the Global CDMO space, where we see interesting growth trends. Our focus in particular will be on biopharma focused CDMOs where the processes are highly technology driven leading to significant barriers to entry. These CDMOs are also seeing strong growth backed by accelerated growth in biologics, increased outsourcing and potential market share consolidation among the large biopharma CDMO players.
We begin with our deep-dive coverage on Lonza Group AG (LONN VX), a global leader in the CDMO space with strong offerings in the bio-pharma CDMO space. Lonza has a market-leading presence across biopharma and small molecules end-to-end CDMO offerings. It has a strong operational and regulatory track record built over the past many decades that has enabled it to establish a wide-reaching client base. Lonza was founded in 1897 and is based out of Switzerland. Its operations and client reach span globally.
Insight Flow

Business Background
Investment Thesis
Valuation
Catalysts
Risks
Conclusion


Lonza: A Bellwether Biopharma Focused CDMO | At Inflection Point, To Benefit from Ongoing Capex

<p style="text-align: justify;">Despite recent weakness across global markets, our weight of the evidence approach continues to lead us to the same conclusions as we posited in our 1/24/20 and 1/30/20 <em>Int’l Compass </em>reports: we continue to believe this is a bull market until proven otherwise, and a “buy the dip” strategy remains warranted. In our February International Strategy, we highlight various themes which lead to our bullish outlook, and offer several attractive opportunities we are seeing in the global health care and technology sectors..</p>

Despite recent weakness across global markets, our weight of the evidence approach continues to lead us to the same conclusions as we posited in our 1/24/20 and 1/30/20 Int’l Compass reports: we continue to believe this is a bull market until proven otherwise, and a “buy the dip” strategy remains warranted. In our February International Strategy, we highlight various themes which lead to our bullish outlook, and offer several attractive opportunities we are seeing in the global health care and technology sectors..

Switzerland

Lonza is a global partner to the pharmaceutical, biotech and nutrition markets. The company works with healthcare customers to develop, manufacture and commercialize medical treatments and technologies to treat patients against a range of diseases. Founded in the Swiss Alps, Lonza now operates across Europe, North America, South America, Asia and Oceania.

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Lonza Group (LONN SW)

Novotech Health IPO: Valuation First-Look

Novotech is pre-marketing an HKEx IPO to raise $0.5-1.0 billion. In this note, we present our forecasts and take the first look at Novotech's...

Arun George

Global Equity Strategy: Mixed Market Environment Continues As Yields Break Down

The Hang Seng, EURO STOXX 50, MSCI ACWI ex-US, and MSCI EAFE display bearish short-term inflections and 10-year yields in the US and Germany are...

Vermilion Research

Global Equity Strategy: Opportunities In Real Estate and Health Care

The weight of the evidence continues to support our mixed, but overall constructive outlook. We outline the basis for our outlook and also...

Vermilion Research

Lonza: A Bellwether Biopharma Focused CDMO | At Inflection Point, To Benefit from Ongoing Capex

Over the next few weeks/months, we will be initiating coverage on a few key players in the Global CDMO space, where we see interesting growth...

Ankit Agrawal, CFA

Global Equity Strategy: Buy the Dips

Despite recent weakness across global markets, our weight of the evidence approach continues to lead us to the same conclusions as we posited in...

Vermilion Research

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