HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/modern-dental-group-ltd" target="_blank" data-smartkarma-citation="entities:21020:1" rel="noopener">Modern Dental Group (3600 HK)</a> (MDG) has been quite popular since the beginning of this year, and its share price increased about 527.46% by the end of August 20, 2021, which was mainly driven by the positive financial performance. According to the Company’s announcements, based on the preliminary assessment for 2021/1H, MDG expects the net profit for 2021/1H to be within the range of HK$230 million to HK$245 million compared with a net loss for the six month period ended 30 June 2020 of approximately HK$140 million. The turnaround was mainly driven by the strong sales performance amid the solid recovery in the dental industry. The total revenue increased by approximately 61.7% to 66.1% (approximately HKD1,450 million to HKD1,490 million) compared with the six months ended 30 June 2020 (approximately HKD897 million). This insight mainly analyzed the business, thoughts on valuation and the outlook of MDG.</p>

Modern Dental Group (3600 HK) (MDG) has been quite popular since the beginning of this year, and its share price increased about 527.46% by the end of August 20, 2021, which was mainly driven by the positive financial performance. According to the Company’s announcements, based on the preliminary assessment for 2021/1H, MDG expects the net profit for 2021/1H to be within the range of HK$230 million to HK$245 million compared with a net loss for the six month period ended 30 June 2020 of approximately HK$140 million. The turnaround was mainly driven by the strong sales performance amid the solid recovery in the dental industry. The total revenue increased by approximately 61.7% to 66.1% (approximately HKD1,450 million to HKD1,490 million) compared with the six months ended 30 June 2020 (approximately HKD897 million). This insight mainly analyzed the business, thoughts on valuation and the outlook of MDG.

Modern Dental Group (3600.HK) - Performance Turnaround with Promising Growth Potential

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

Angelalign Technology / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/angelalign-technology-inc" target="_blank" data-smartkarma-citation="entities:31480:1" rel="noopener">Angelalign Technology (6699 HK)</a> , one of the leading clear alignment treatment solution providers in China has set the terms for its IPO. The company plans to issue approx. 16.8m shares (10% of the outstanding shares post-IPO) at an indicative price range of HK$147-173 per share. At the midpoint of the above price range of HK$160 per share, Angelalign will raise net proceeds of HK$2.5bn (US$324m) at a market capitalisation of HK$26.5bn and a post-money valuation of HK$22.9bn.</p><table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 225.0pt;"><p style="text-align: center;"><strong>Angelalign Technology IPO Details</strong></p></td></tr>
<tr>
<td style="width: 162.3pt;"><p>No. of Shares Issued</p></td>
<td style="width: 62.7pt;"><p>   16,829,600</p></td>
</tr>
<tr>
<td style="width: 162.3pt;"><p>IPO Price per Share (HK$)</p></td>
<td style="width: 62.7pt;"><p style="text-align: right;">147-173</p></td>
</tr>
<tr>
<td style="width: 162.3pt;"><p>Offer as a % of Outstanding Shares</p></td>
<td style="width: 62.7pt;"><p style="text-align: right;">10.2%</p></td>
</tr>
<tr>
<td style="width: 162.3pt;"><p>Total Shares Outstanding (m)</p></td>
<td style="width: 62.7pt;"><p style="text-align: right;">165.81</p></td>
</tr>
<tr>
<td style="width: 162.3pt;"><p>Net Proceeds (HK$m)</p></td>
<td style="width: 62.7pt;"><p>          2,513.0</p></td>
</tr>
<tr>
<td style="width: 162.3pt;"><p>Market Capitalisation (HK$m)</p></td>
<td style="width: 62.7pt;"><p>        26,529.1</p></td>
</tr>
<tr>
<td style="width: 162.3pt;"><p>Enterprise Value (HK$m)</p></td>
<td style="width: 62.7pt;"><p>        22,945.5</p></td>
</tr>
</tbody></table><p><em>Source: Company disclosures, LSR (net proceeds, market cap and EV are at the midpoint of the IPO price range)</em></p><p>The company plans to use approx. 40% of the net proceeds from the IPO on funding the construction of new manufacturing facilities and R&amp;D center and plans to utilise another 18.3% of the net IPO proceeds on further strengthening its R&amp;D capabilities.</p>

Angelalign Technology (6699 HK) , one of the leading clear alignment treatment solution providers in China has set the terms for its IPO. The company plans to issue approx. 16.8m shares (10% of the outstanding shares post-IPO) at an indicative price range of HK$147-173 per share. At the midpoint of the above price range of HK$160 per share, Angelalign will raise net proceeds of HK$2.5bn (US$324m) at a market capitalisation of HK$26.5bn and a post-money valuation of HK$22.9bn.
Angelalign Technology IPO Details

No. of Shares Issued
   16,829,600


IPO Price per Share (HK$)
147-173


Offer as a % of Outstanding Shares
10.2%


Total Shares Outstanding (m)
165.81


Net Proceeds (HK$m)
          2,513.0


Market Capitalisation (HK$m)
        26,529.1


Enterprise Value (HK$m)
        22,945.5

Source: Company disclosures, LSR (net proceeds, market cap and EV are at the midpoint of the IPO price range)The company plans to use approx. 40% of the net proceeds from the IPO on funding the construction of new manufacturing facilities and R&amp;D center and plans to utilise another 18.3% of the net IPO proceeds on further strengthening its R&amp;D capabilities.

Angelalign IPO Valuation: Limited Upside from the Top End

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.

<p><a href="https://www.smartkarma.com/entities/angelalign-technology-inc" target="_blank" data-smartkarma-citation="entities:31480:1" rel="noopener">Angelalign Technology (AAT HK)</a> is a leading clear aligner treatment solution provider in China. It is the second-largest player accounting for 41.0% market share in 2020 as measured by case shipments, according to CIC. </p><p>At the proposed IPO price range of HK$147-173 per share, Angelalign will have a market cap of HK$24.4-28.7 million ($3.1-3.7 billion). At the mid-point of the IPO price range, the gross proceeds are $347 million.</p><p>In <a href="https://www.smartkarma.com/insights/angelalign-ipo-initiation-if-tooth-be-told" target="_blank" data-smartkarma-citation="insights:51881" rel="noopener">Angelalign IPO Initiation: If Tooth Be Told</a>, we stated that Angelalign is ideally positioned to benefit from China's clear aligner market opportunity due to its high market share, strong growth, rising margins and prodigious cash generation. We concluded that Angelalign is worth a look.</p><div class="content-highlight"><p>On a relative valuation basis, Angelalign looks attractive to its peers on a PEG basis but expensive on a P/E basis. Our base-case DCF value is HK$171.83 per share which is a 7% upside to the mid-point of the IPO price range. Due to the limited upside to our DCF valuation, we think that the IPO price range is full. Overall, while we like Angelalign's fundamentals, due to the full IPO price range and the current weak market sentiment on IPOs, we are inclined to wait on the sidelines for a more attractive entry point.   </p></div>

Angelalign Technology (AAT HK) is a leading clear aligner treatment solution provider in China. It is the second-largest player accounting for 41.0% market share in 2020 as measured by case shipments, according to CIC. At the proposed IPO price range of HK$147-173 per share, Angelalign will have a market cap of HK$24.4-28.7 million ($3.1-3.7 billion). At the mid-point of the IPO price range, the gross proceeds are $347 million.In Angelalign IPO Initiation: If Tooth Be Told, we stated that Angelalign is ideally positioned to benefit from China's clear aligner market opportunity due to its high market share, strong growth, rising margins and prodigious cash generation. We concluded that Angelalign is worth a look.On a relative valuation basis, Angelalign looks attractive to its peers on a PEG basis but expensive on a P/E basis. Our base-case DCF value is HK$171.83 per share which is a 7% upside to the mid-point of the IPO price range. Due to the limited upside to our DCF valuation, we think that the IPO price range is full. Overall, while we like Angelalign's fundamentals, due to the full IPO price range and the current weak market sentiment on IPOs, we are inclined to wait on the sidelines for a more attractive entry point.   

<div><div id="ember3974"><div>
<div>
<a href="https://www.smartkarma.com/entities/angelalign-technology-inc" target="_blank" data-smartkarma-citation="entities:31480:1" rel="noopener">Angelalign Technology (AAT HK)</a> is a leading clear aligner treatment solution provider in China. It is the second-largest player accounting for 41.0% market share in 2020 as measured by case shipments, according to CIC. Angelalign is pre-marketing an HKEx IPO to raise $300 million, according to press reports. </div>
<div></div>
</div></div></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/angelalign-ipo-initiation-if-tooth-be-told" target="_blank" data-smartkarma-citation="insights:51881" rel="noopener">Angelalign IPO Initiation: If Tooth Be Told</a>, we stated that Angelalign is ideally positioned to benefit from this market opportunity due to high market share, strong growth, rising margins and prodigious cash generation. We concluded that Angelalign is worth a look. In this note, we present our forecasts and take the first look at Angelalign's potential valuation range. </p></div></div></div>



Angelalign Technology (AAT HK) is a leading clear aligner treatment solution provider in China. It is the second-largest player accounting for 41.0% market share in 2020 as measured by case shipments, according to CIC. Angelalign is pre-marketing an HKEx IPO to raise $300 million, according to press reports. 

In Angelalign IPO Initiation: If Tooth Be Told, we stated that Angelalign is ideally positioned to benefit from this market opportunity due to high market share, strong growth, rising margins and prodigious cash generation. We concluded that Angelalign is worth a look. In this note, we present our forecasts and take the first look at Angelalign's potential valuation range. 

<p>Dentistry has always been one of the areas that investors are interested in. In the HKEX, there are also companies that focus on dental business such as <a href="https://www.smartkarma.com/entities/modern-dental-group-ltd" target="_blank" data-smartkarma-citation="entities:21020:1" rel="noopener">Modern Dental Group (3600 HK)</a>, one of the world's leading global dental prosthetic device providers. The Company’s share price rose from HK$1.44/share in the beginning of the year to HK$3.95/share on May 2, 2021, up 174%, and has been rising continuously in recent weeks, which was mainly driven by the positive financial results after the Company released its 2020 financial reports and previous relatively low valuation. This insight mainly analyzed the logic behind the rally of stock price, the future business prospects and investment suggestion of this Company.</p>

Dentistry has always been one of the areas that investors are interested in. In the HKEX, there are also companies that focus on dental business such as Modern Dental Group (3600 HK), one of the world's leading global dental prosthetic device providers. The Company’s share price rose from HK$1.44/share in the beginning of the year to HK$3.95/share on May 2, 2021, up 174%, and has been rising continuously in recent weeks, which was mainly driven by the positive financial results after the Company released its 2020 financial reports and previous relatively low valuation. This insight mainly analyzed the logic behind the rally of stock price, the future business prospects and investment suggestion of this Company.

Modern Dental Group (3600.HK) - Insights on Recent Rally of Stock Price and Future Outlook

Hong Kong

Modern Dental Group is a leading global provider of custom-made dental prosthetics, including crowns, bridges, dentures, and clear aligners. The company also offers orthodontic devices, sports guards, and anti-snoring devices, leveraging digital dentistry solutions. Founded in 1986, Modern Dental Group is headquartered in Hong Kong.

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Modern Dental Group (3600 HK)