Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/oscar-health-inc" target="_blank" data-smartkarma-citation="entities:31499:1" rel="noopener">Oscar Health (OSCR US)</a>  completed its IPO in March and sold to investors ~36.4 million shares of Class A common stock at IPO price of $39.00 per share. Therefore, insurtech unicorn raised net proceeds of $1.3 billion and used a portion of funds to repay ~$153 million of borrowings under the Term Loan Facility. However, Oscar Health shares fell ~43% since IPO and could find the bottom near $22.00 per share. We believe that upcoming IPO of insurtech competitor Bright Health and strong financial results for 1Q CY21 may drive valuation of Oscar Health higher. Company plans to deliver revenue growth and expects direct and assumed policy premiums will be ~$3.1 billion at midpoint for CY21.</p>

Oscar Health (OSCR US)  completed its IPO in March and sold to investors ~36.4 million shares of Class A common stock at IPO price of $39.00 per share. Therefore, insurtech unicorn raised net proceeds of $1.3 billion and used a portion of funds to repay ~$153 million of borrowings under the Term Loan Facility. However, Oscar Health shares fell ~43% since IPO and could find the bottom near $22.00 per share. We believe that upcoming IPO of insurtech competitor Bright Health and strong financial results for 1Q CY21 may drive valuation of Oscar Health higher. Company plans to deliver revenue growth and expects direct and assumed policy premiums will be ~$3.1 billion at midpoint for CY21.

Will Bright Health Upcoming IPO Drive Valuation of Oscar Health Higher?

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

<div><p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a> is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/swiss-re-ag-1f83dcbc-730e-46fa-82f2-bfe7e8e361a1" target="_blank" data-smartkarma-citation="entities:27914:1" rel="noopener">Swiss Re AG (SREN SW)</a> and <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>.</p></div><div><p>At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/waterdrop-ipo-initiation-going-for-brokers" target="_blank" data-smartkarma-citation="insights:50610" rel="noopener">Waterdrop IPO Initiation: Going for Brokers</a>, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. </p></div></div></div>

Waterdrop Inc (WDH US) is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop is backed by Tencent Holdings (700 HK), Swiss Re AG (SREN SW) and Meituan (3690 HK).At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.In Waterdrop IPO Initiation: Going for Brokers, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. 

<p><a href="https://www.smartkarma.com/entities/oscar-health-inc" target="_blank" data-smartkarma-citation="entities:31499:1" rel="noopener">Oscar Health (OSCR US)</a> is technology-driven and consumer-focused health insurer with the best-in-class in-house built technology and customer service. VC-backed insurtech unicorn wants to disrupt and transform health insurance through engagement technology. <a href="https://www.smartkarma.com/entities/oscar-health-inc" target="_blank" data-smartkarma-citation="entities:31499:1" rel="noopener">Oscar Health (OSCR US)</a>  helps to save money and optimize spending for its members using the personalized data to drive real-time actionable insights and recommendations.</p><p>Morgan Stanley, Goldman Sachs and Allen &amp; Company are lead underwriters on the IPO. <a href="https://www.smartkarma.com/entities/oscar-health-inc" target="_blank" data-smartkarma-citation="entities:31499:1" rel="noopener">Oscar Health (OSCR US)</a>  raised ~$1.6 billion in funding over 10 rounds, according to Pitchbook and Crunchbase. The expected price range on the IPO of 31 million shares was raised to $36-38 per share and today Oscar Health sold shares at IPO price of $39 per share implying valuation of ~$8 billion.</p>

Oscar Health (OSCR US) is technology-driven and consumer-focused health insurer with the best-in-class in-house built technology and customer service. VC-backed insurtech unicorn wants to disrupt and transform health insurance through engagement technology. Oscar Health (OSCR US)  helps to save money and optimize spending for its members using the personalized data to drive real-time actionable insights and recommendations.Morgan Stanley, Goldman Sachs and Allen &amp; Company are lead underwriters on the IPO. Oscar Health (OSCR US)  raised ~$1.6 billion in funding over 10 rounds, according to Pitchbook and Crunchbase. The expected price range on the IPO of 31 million shares was raised to $36-38 per share and today Oscar Health sold shares at IPO price of $39 per share implying valuation of ~$8 billion.

Oscar Health IPO. Reinventing Health Insurance

United States

Mulberry Health Inc. provides healthcare services. The Hospital offers short-term rehabilitation, memory care, outpatient therapies, and independent living facilities. Mulberry Health serves patients in the United States.

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Oscar Health (OSCR US)

Will Bright Health Upcoming IPO Drive Valuation of Oscar Health Higher?

Oscar Health reduced quota share in 1Q CY21 and we expect GAAP revenue may grow 100%+ y/o/y this year with growing business segments MA, Small...

Andrei Zakharov

Waterdrop IPO: Valuation Insights

Waterdrop has launched its IPO to raise net proceeds of $301.6 million at the mid-point of the price range of $10-12. The price range is full at...

Arun George

Oscar Health IPO. Reinventing Health Insurance

We have positive view on Oscar Health IPO and believe that Oscar Health is a technology company and not traditional insurer making health care more...

Andrei Zakharov

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