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

MicroTech Medical (Hangzhou) / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/microtech-medical-hangzhou-co-ltd" target="_blank" data-smartkarma-citation="entities:33367:1" rel="noopener">MicroTech Medical Hangzhou (2235 HK)</a> provides diabetes treatment and diabetes monitoring medical devices in China and globally. MicroTech’s core product, a semi-disposable patch insulin pump (known as Equil) is the only patch insulin pump available in China whereas the competitor products are tube insulin pumps. The company also has a CGMS product (Continuous Glucose Monitoring System), AiDEX G7 which is the second commercialised calibration-free real-time CGMS in the world. AiDEX G7 has received the CE Marking in the EU in September 2020 and the product has been certified by the NMPA to be eligible for Special Approval Procedures of Innovative Medical Devices promulgated by the NMPA.MicroTech has priced its IPO at HK$30.50 per share, slightly below the upper end of the indicative IPO price range of HK$27.70-31.15 per share. At the offer price of HK$30.50 per share, the company raised net proceeds of HK$1,815.1m at a market capitalisation of HK$12.9bn and a post-money enterprise value of HK$10.5bn. According to the company, its Hong Kong offering was oversubscribed by about 6.79x while the international offering was oversubscribed by about 4.9x.In our previous two insights on the company’s IPO, we discussed the company’s core products and product portfolio, market potential for its products and the company’s valuation.

MicroTech Medical Hangzhou (2235 HK) provides diabetes treatment and diabetes monitoring medical devices in China and globally. MicroTech’s core product, a semi-disposable patch insulin pump (known as Equil) is the only patch insulin pump available in China whereas the competitor products are tube insulin pumps. The company also has a CGMS product (Continuous Glucose Monitoring System), AiDEX G7 which is the second commercialised calibration-free real-time CGMS in the world. AiDEX G7 has received the CE Marking in the EU in September 2020 and the product has been certified by the NMPA to be eligible for Special Approval Procedures of Innovative Medical Devices promulgated by the NMPA.MicroTech has priced its IPO at HK$30.50 per share, slightly below the upper end of the indicative IPO price range of HK$27.70-31.15 per share. At the offer price of HK$30.50 per share, the company raised net proceeds of HK$1,815.1m at a market capitalisation of HK$12.9bn and a post-money enterprise value of HK$10.5bn. According to the company, its Hong Kong offering was oversubscribed by about 6.79x while the international offering was oversubscribed by about 4.9x.In our previous two insights on the company’s IPO, we discussed the company’s core products and product portfolio, market potential for its products and the company’s valuation.

MicroTech Medical IPO: Thoughts on First Day Trading

<a href="https://www.smartkarma.com/entities/broncus-holding-corporation" target="_blank" data-smartkarma-citation="entities:33315:1" rel="noopener">Broncus (2216 HK)</a> is a medical device company focused on the development of interventional pulmonology products. The company offers five interventional therapeutic products and product candidates for lung diseases (including its core products InterVapor and RF-II) and offers six interventional diagnostic medical consumable products including LungPoint. The company was ranked first in China’s interventional pulmonology navigation device market with a market share of 43.2% based on sales volume and ranked second with a market share of 37.5% measured by sales revenue from 2018-2020.The company has priced its IPO at HK$18.70 per share, at the upper end of the IPO price range of HK$17.2-18.7 per share. At the above price, Broncus raised net proceeds of HK$1,552.4m at a market capitalisation of HK$9.9bn and a post-money enterprise value of HK$8.0bn. According to the company, its Hong Kong offering was oversubscribed by about 11.1x while the international offering was oversubscribed by about 4.1x.In our previous two insights on the company’s IPO, we discussed the company’s core products and product portfolio, market potential for its products and the company’s valuation.

Broncus (2216 HK) is a medical device company focused on the development of interventional pulmonology products. The company offers five interventional therapeutic products and product candidates for lung diseases (including its core products InterVapor and RF-II) and offers six interventional diagnostic medical consumable products including LungPoint. The company was ranked first in China’s interventional pulmonology navigation device market with a market share of 43.2% based on sales volume and ranked second with a market share of 37.5% measured by sales revenue from 2018-2020.The company has priced its IPO at HK$18.70 per share, at the upper end of the IPO price range of HK$17.2-18.7 per share. At the above price, Broncus raised net proceeds of HK$1,552.4m at a market capitalisation of HK$9.9bn and a post-money enterprise value of HK$8.0bn. According to the company, its Hong Kong offering was oversubscribed by about 11.1x while the international offering was oversubscribed by about 4.1x.In our previous two insights on the company’s IPO, we discussed the company’s core products and product portfolio, market potential for its products and the company’s valuation.

Broncus IPO: Thoughts on First Day Trading

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Equity Bottom-Up

New Horizon Health reported 1H21 results. We attended the post-result management call this morning and remain optimistic about the prospect of the company. We continue to like the company and believe the current weakness presents opportunities to accumulate the stock. Our valuation suggests a 105% upside from the current share price.<h2>Our previous coverage on the company</h2><ul>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/new-horizon-health-pre-ipo-a-hot-medical-device-deal-in-making" target="_blank" rel="noopener">New Horizon Health (诺辉健康) Pre-IPO: A Hot Medical Device Deal in Making</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/new-horizon-health-pre-ipo-comparison-with-exact-sciences" target="_blank" rel="noopener">New Horizon Health (诺辉健康) Pre-IPO: Comparison with Exact Sciences</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/new-horizon-health-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">New Horizon Health (诺辉健康) Pre-IPO: Thoughts on valuation</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/new-horizon-health-ipo-room-to-fly" target="_blank" rel="noopener">New Horizon Health (诺辉健康) IPO: Room to Fly</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/new-horizon-health-ipo-trading-supply-demand-imbalance" target="_blank" rel="noopener">New Horizon Health (诺辉健康) IPO Trading: Supply-Demand Imbalance</a></li>
</ul>

New Horizon Health reported 1H21 results. We attended the post-result management call this morning and remain optimistic about the prospect of the company. We continue to like the company and believe the current weakness presents opportunities to accumulate the stock. Our valuation suggests a 105% upside from the current share price.Our previous coverage on the company
New Horizon Health (诺辉健康) Pre-IPO: A Hot Medical Device Deal in Making
New Horizon Health (诺辉健康) Pre-IPO: Comparison with Exact Sciences
New Horizon Health (诺辉健康) Pre-IPO: Thoughts on valuation
New Horizon Health (诺辉健康) IPO: Room to Fly
New Horizon Health (诺辉健康) IPO Trading: Supply-Demand Imbalance


New Horizon Health 1H21: On Track to a Strong Year

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Hang Seng Indexes should announce the results of the September 2021 review of the Hang Seng Family of Indexes on 13 August. The constituent changes will be effective after the close of trading on 3 September.The review period for the September rebalance ends on 30 June and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion 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>.With the major capping changes scheduled to be completed at the June rebalance tomorrow, there could be up to 8 inclusions at the September review while still keeping the one-way index turnover lower than 5%. The actual number of inclusions could be lower to spread the turnover over the next few reviews.We see <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>, <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a>, <a href="https://www.smartkarma.com/entities/smoore-international" target="_blank" data-smartkarma-citation="entities:28241:1" rel="noopener">Smoore International (6969 HK)</a>, <a href="https://www.smartkarma.com/entities/fosun-international-ltd" target="_blank" data-smartkarma-citation="entities:433:1" rel="noopener">Fosun International (656 HK)</a> and <a href="https://www.smartkarma.com/entities/evergrande-property-services" target="_blank" data-smartkarma-citation="entities:30921:1" rel="noopener">Evergrande Property Services (6666 HK)</a> as higher probability inclusions in the index, while there is a lower probability of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a> and <a href="https://www.smartkarma.com/entities/xinyi-glass-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11940:1" rel="noopener">Xinyi Glass Holdings (868 HK)</a> being included 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/china-gas-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14315:1" rel="noopener">China Gas Holdings (384 HK)</a> could be added to increase the coverage of Group 5 where Utilities are a part. This is less of a priority though with the market cap coverage of the group in excess of 60% as compared to the other groups that are much lower.There may not be any deletions at the current time. If the Index Committee decides to delete stocks, the two names most at risk are <a href="https://www.smartkarma.com/entities/china-life-insurance-co-ltd-9f877d22-7cf7-4b00-b525-cec71139f369" target="_blank" data-smartkarma-citation="entities:5794:1" rel="noopener">China Life Insurance Co H (2628 HK)</a> and <a href="https://www.smartkarma.com/entities/hengan-intl-group-co-ltd" target="_blank" data-smartkarma-citation="entities:29:1" rel="noopener">Hengan Intl Group (1044 HK)</a>.These changes will increase the market cap coverage of the index from 60.1% to 64.3% and the turnover coverage from 53.75% to 57.75%. One-way index turnover is estimated at 4.79% and would result in a one-way trade of HK$9.2bn.

Hang Seng Indexes should announce the results of the September 2021 review of the Hang Seng Family of Indexes on 13 August. The constituent changes will be effective after the close of trading on 3 September.The review period for the September rebalance ends on 30 June and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the Hong Kong Hang Seng Index (HSI INDEX).With the major capping changes scheduled to be completed at the June rebalance tomorrow, there could be up to 8 inclusions at the September review while still keeping the one-way index turnover lower than 5%. The actual number of inclusions could be lower to spread the turnover over the next few reviews.We see JD Health (6618 HK), Hansoh Pharmaceutical (3692 HK), Smoore International (6969 HK), Fosun International (656 HK) and Evergrande Property Services (6666 HK) as higher probability inclusions in the index, while there is a lower probability of JD.com Inc. (9618 HK), Nongfu Spring (9633 HK) and Xinyi Glass Holdings (868 HK) being included in the Hong Kong Hang Seng Index (HSI INDEX).China Gas Holdings (384 HK) could be added to increase the coverage of Group 5 where Utilities are a part. This is less of a priority though with the market cap coverage of the group in excess of 60% as compared to the other groups that are much lower.There may not be any deletions at the current time. If the Index Committee decides to delete stocks, the two names most at risk are China Life Insurance Co H (2628 HK) and Hengan Intl Group (1044 HK).These changes will increase the market cap coverage of the index from 60.1% to 64.3% and the turnover coverage from 53.75% to 57.75%. One-way index turnover is estimated at 4.79% and would result in a one-way trade of HK$9.2bn.

HSI Index Rebalance Preview: Potential Inclusions in September

Hang Seng Indexes Company (HSIL) reviews the constituents of the Hang Seng Composite Index (HSCI) on a half yearly basis in March and September with data cut-off dates as of the end of December and June. The review announcement for the September 2021 review should be made on 13 August and will be effective after the close of trading on 3 September.The June review will see the inclusion of stocks that were newly listed from 1 January to 31 March and meet the criteria for joining the index.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors.<div>There are a lot of stocks that will join the HSCI and will subsequently be included as a part of the Southbound Stock Connect program - these stocks could be bought by mainland investors and could outperform their peers and the market.</div><div>There are stocks that will be deleted from the HSCI and consequently deleted from the Southbound Stock Connect buy list while some stocks will be deleted from the HSCI but maintained in Stock Connect since they have listed A-shares.</div><div>Read on for more details and the stocks affected by the changes.</div>

Hang Seng Indexes Company (HSIL) reviews the constituents of the Hang Seng Composite Index (HSCI) on a half yearly basis in March and September with data cut-off dates as of the end of December and June. The review announcement for the September 2021 review should be made on 13 August and will be effective after the close of trading on 3 September.The June review will see the inclusion of stocks that were newly listed from 1 January to 31 March and meet the criteria for joining the index.Although there are almost no assets indexed to the HSCI, the index forms the basis of stocks that are eligible for Southbound Stock Connect. Stocks that are included in the HSCI and subsequently included in the Stock Connect program get inflows from mainland investors.There are a lot of stocks that will join the HSCI and will subsequently be included as a part of the Southbound Stock Connect program - these stocks could be bought by mainland investors and could outperform their peers and the market.There are stocks that will be deleted from the HSCI and consequently deleted from the Southbound Stock Connect buy list while some stocks will be deleted from the HSCI but maintained in Stock Connect since they have listed A-shares.Read on for more details and the stocks affected by the changes.

HSCI Index Rebalance and Stock Connect: Potential Changes in June and September

China

New Horizon Health Limited is a China-based investment holding company focused on early cancer screening and in-home testing, with an emphasis on colorectal, gastric, and cervical cancers. Its key products include ColoClear and Pupu Tube. The company was founded in 2015 and is headquartered in Hangzhou, China.

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New Horizon Health (6YZ GR)

MicroTech Medical IPO: Thoughts on First Day Trading

MicroTech priced its IPO at HK$30.50 per share which significantly overvalues the shares. We expect the company's shares to open poorly at its...

Shifara Samsudeen, FCMA, CGMA

Broncus IPO: Thoughts on First Day Trading

Though Broncus priced its IPO at the top-end of its price range, our reverse DCF model suggests that Broncus’ IPO is overvalued. We expect shares...

Shifara Samsudeen, FCMA, CGMA

New Horizon Health 1H21: On Track to a Strong Year

Post 1H21 results, we continue to like the company and believe the current weakness presents opportunities to accumulate the stock.

Ke Yan, CFA, FRM

HSI Index Rebalance Preview: Potential Inclusions in September

There could be 8 additions to the HSI at the September review to take the index members up to 66. Turnover will be less than 5% and there are a lot...

Brian Freitas

HSCI Index Rebalance and Stock Connect: Potential Changes in June and September

A look at the potential changes to the HSCI at the June & September reviews and stocks that could be included in/excluded from Stock Connect. These...

Brian Freitas

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