HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Jenscare Scientific / Equity Capital Markets

<p>Cardiovascular medical device market has always been one of the largest segments in the global medical device industry. Among them, the interventional therapies of structural heart diseases, represented by transcatheter valvular therapeutics, are booming and have become a highlight in the field of cardiovascular diseases, bringing another revolution in interventional cardiology. On June 21, <a href="https://www.smartkarma.com/entities/jenscare-scientific-co-ltd" target="_blank" data-smartkarma-citation="entities:33525:1" rel="noopener">Jenscare Scientific (JCS HK)</a>, a globally influential medical device company dedicated to the development of innovative products for the treatment of structural heart diseases, submitted the prospectus to HKEX and officially started the IPO process. This insights mainly analyzed the industry characteristics, the business, the financial position and the related challenges.</p>

Cardiovascular medical device market has always been one of the largest segments in the global medical device industry. Among them, the interventional therapies of structural heart diseases, represented by transcatheter valvular therapeutics, are booming and have become a highlight in the field of cardiovascular diseases, bringing another revolution in interventional cardiology. On June 21, Jenscare Scientific (JCS HK), a globally influential medical device company dedicated to the development of innovative products for the treatment of structural heart diseases, submitted the prospectus to HKEX and officially started the IPO process. This insights mainly analyzed the industry characteristics, the business, the financial position and the related challenges.

Pre-IPO Jenscare Scientific - The Industry Characteristics, the Business and the Challenges

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.

Shanghai HeartCare Medical Technology / Equity Capital Markets

<p>Shanghai HeartCare is a neuro-interventional medical device pioneer in China. It has four products approved for marketing and expects 9 products to commercialize in 2021, as well 10 products to commercialize between 2022 and 2025. </p><p>In our previous note, we looked at the company's two core products Captor and LAA Occluder. We think the Captor, a stent retrieving thrombectomy device, is the main selling point of the deal given its decent efficacy and safety data and it has already been approved by the NMPA. Market structure for Captor is characterized by the early stage of growth and dominance by MNC players and the company's product is the first approved domestic product with commendable data from head-to-head clinical trials. The company's management are mainly ex-employee from Microport Scientific, a leading international medical device player in China. </p><p>In this note, we will provide our thoughts on valuation.</p>

Shanghai HeartCare is a neuro-interventional medical device pioneer in China. It has four products approved for marketing and expects 9 products to commercialize in 2021, as well 10 products to commercialize between 2022 and 2025. In our previous note, we looked at the company's two core products Captor and LAA Occluder. We think the Captor, a stent retrieving thrombectomy device, is the main selling point of the deal given its decent efficacy and safety data and it has already been approved by the NMPA. Market structure for Captor is characterized by the early stage of growth and dominance by MNC players and the company's product is the first approved domestic product with commendable data from head-to-head clinical trials. The company's management are mainly ex-employee from Microport Scientific, a leading international medical device player in China. In this note, we will provide our thoughts on valuation.

Shanghai HeartCare (心玮医疗) Pre-IPO: Thoughts on Valuation

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.

Zylox-Tonbridge Medical Technology / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/zylox-tonbridge-medical-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32974:1" rel="noopener">Zylox-Tonbridge Medical Technology (2190 HK)</a> is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). </p>
<p>Zylox-Tonbridge will commence trading on Monday, 5 July. Zylox-Tonbridge priced its IPO at HK$42.70 and <a href="https://inews.hket.com/article/2996563/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E6%AD%B8%E5%89%B5%E9%80%9A%E6%A9%8B2190%E6%9A%97%E7%9B%A4%E6%94%B6%E5%8D%8730-%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA6575%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">closed 31% up at HK$55.85</a> in the Futu securities grey market. </p>
</div><div><p>In <a href="https://www.smartkarma.com/insights/zylox-tonbridge-ipo-living-on" target="_blank" data-smartkarma-citation="insights:53469" rel="noopener">Zylox-Tonbridge IPO: Living On</a>, we opined that Zylox-Tonbridge is on the cusp of delivering on a sizeable addressable market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. We concluded that Zylox-Tonbridge’s product portfolio is attractive. In <a href="https://www.smartkarma.com/insights/zylox-tonbridge-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:53517" rel="noopener">Zylox-Tonbridge IPO: Valuation Insights</a>, we noted that the IPO price range is attractive.</p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of HK$48.89 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that we would take profits at the grey market price.</p></div></div></div>


Zylox-Tonbridge Medical Technology (2190 HK) is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). 
Zylox-Tonbridge will commence trading on Monday, 5 July. Zylox-Tonbridge priced its IPO at HK$42.70 and closed 31% up at HK$55.85 in the Futu securities grey market. 
In Zylox-Tonbridge IPO: Living On, we opined that Zylox-Tonbridge is on the cusp of delivering on a sizeable addressable market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. We concluded that Zylox-Tonbridge’s product portfolio is attractive. In Zylox-Tonbridge IPO: Valuation Insights, we noted that the IPO price range is attractive.Updating for the final IPO net raise, our base-case DCF derived price target of HK$48.89 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that we would take profits at the grey market price.

<div>
<p><a href="https://www.smartkarma.com/entities/zylox-tonbridge-medical-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32974:1" rel="noopener">Zylox-Tonbridge Medical Technology (2190 HK)</a> is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). </p>
<p>Zylox-Tonbridge has launched an HKEx IPO to raise net proceeds of $300 million at the mid-point of the IPO price range of HK$39.80-42.70 per share. Twelve cornerstone investors will subscribe for $145 million worth of the offer shares (45.47% of the offer shares at the mid-point). Pricing will be finalised on 25 June and the shares will list on 5 July.</p>
</div><div>
<p>In <a href="https://www.smartkarma.com/insights/zylox-tonbridge-ipo-living-on" target="_blank" data-smartkarma-citation="insights:53469" rel="noopener">Zylox-Tonbridge IPO: Living On</a>, we opined that Zylox-Tonbridge is on the cusp of delivering on a sizeable addressable market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. We concluded that Zylox-Tonbridge’s product portfolio is attractive.</p>
<div class="content-highlight"><p>Our base-case DCF valuation is HK$48.56 per share, which is an 18% upside to the mid-point of the IPO price range of HK$39.80-42.70 per share. Consequently, we would participate in the IPO. </p></div>
</div><div><p></p></div>


Zylox-Tonbridge Medical Technology (2190 HK) is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). 
Zylox-Tonbridge has launched an HKEx IPO to raise net proceeds of $300 million at the mid-point of the IPO price range of HK$39.80-42.70 per share. Twelve cornerstone investors will subscribe for $145 million worth of the offer shares (45.47% of the offer shares at the mid-point). Pricing will be finalised on 25 June and the shares will list on 5 July.

In Zylox-Tonbridge IPO: Living On, we opined that Zylox-Tonbridge is on the cusp of delivering on a sizeable addressable market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. We concluded that Zylox-Tonbridge’s product portfolio is attractive.
Our base-case DCF valuation is HK$48.56 per share, which is an 18% upside to the mid-point of the IPO price range of HK$39.80-42.70 per share. Consequently, we would participate in the IPO. 


<p><a href="https://www.smartkarma.com/entities/zylox-tonbridge-medical-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32974:1" rel="noopener">Zylox-Tonbridge Medical Technology (2190 HK)</a> is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). </p><p>Zylox-Tonbridge has launched an HKEx IPO to raise net proceeds of HK$2,314.0 million ($300 million) at the mid-point of the IPO price range of HK$39.80-42.70 per share. Twelve cornerstone investors will subscribe for $145 million worth of the offer shares (45.47% of the offer shares at the mid-point of the IPO price range). The cornerstone investors include new investors such as Hillhouse, Fidelity International, Boyu Capital, Snow Lake Fund, Athos Capital, Sage Partners and IvyRock. </p><p>The neuro-interventional medical device market in China is expected to grow from RMB4.9 billion in 2019 to RMB37.1 billion in 2030 at a CAGR of 20.2% from 2019 to 2030, according to Frost &amp; Sullivan. The growth is underpinned by the increasing prevalence and treatment rate, the substitution of imported devices by domestic device, increasing patient affordability, improving accessibility of treatments and favourable policy support.</p><div class="content-highlight"><p>Zylox-Tonbridge is on the cusp of delivering on this market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. Overall, we believe that Zylox-Tonbridge’s product portfolio is attractive. We will discuss the valuation in the next note. </p></div>

Zylox-Tonbridge Medical Technology (2190 HK) is a China-based neuro- and peripheral-vascular interventional medical device manufacturer. The product portfolio consists of a total of eight approved products in China and overseas. Its two core products which are launched in China are Thrombite Clot Retriever Device (Thrombite CRD) and Ultrafree Drug Coated PTA Balloon Catheter (Ultrafree DCB). Zylox-Tonbridge has launched an HKEx IPO to raise net proceeds of HK$2,314.0 million ($300 million) at the mid-point of the IPO price range of HK$39.80-42.70 per share. Twelve cornerstone investors will subscribe for $145 million worth of the offer shares (45.47% of the offer shares at the mid-point of the IPO price range). The cornerstone investors include new investors such as Hillhouse, Fidelity International, Boyu Capital, Snow Lake Fund, Athos Capital, Sage Partners and IvyRock. The neuro-interventional medical device market in China is expected to grow from RMB4.9 billion in 2019 to RMB37.1 billion in 2030 at a CAGR of 20.2% from 2019 to 2030, according to Frost &amp; Sullivan. The growth is underpinned by the increasing prevalence and treatment rate, the substitution of imported devices by domestic device, increasing patient affordability, improving accessibility of treatments and favourable policy support.Zylox-Tonbridge is on the cusp of delivering on this market opportunity as its two core products (Thrombite CRD and Ultrafree DCB) were only recently commercialised in China. While Thrombite CRD and Ultrafree DCB will account for most of the revenue over the short term, Zylox-Tonbridge has a strong near-term commercialisation pipeline, which further de-risks the story. Overall, we believe that Zylox-Tonbridge’s product portfolio is attractive. We will discuss the valuation in the next note. 

China

Peijia Medical Ltd. produces and sells medical devices. The Company develops and sells heart valve disease treatment medical devices and other products. Peijia Medical Technology markets its products throughout China. 

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Peijia Medical (9996 HK)

Pre-IPO Jenscare Scientific - The Industry Characteristics, the Business and the Challenges

The article mainly analyzed Jenscare in terms of the industry characteristics of China interventional therapies of structural heart disease,the...

Xinyao (Criss) Wang

Shanghai HeartCare (心玮医疗) Pre-IPO: Thoughts on Valuation

We forecast the sales of HeartCare's four key products, namely Captor, Intracranial Catheter, LAA Occluder, and embolic coil, and also provide an...

Ke Yan, CFA, FRM

Zylox-Tonbridge IPO: Trading Debut

Zylox-Tonbridge priced its IPO at HK$42.70 and closed 31% up at HK$55.85 in the Futu securities grey market. Our DCF sensitivity analysis shows...

Arun George

Zylox-Tonbridge IPO: Valuation Insights

Our base-case DCF valuation is HK$48.56 per share, which is an 18% upside to the mid-point of the IPO price range of HK$39.80-42.70 per share....

Arun George

Zylox-Tonbridge IPO: Living On

Zylox-Tonbridge has launched an HKEx IPO to raise net proceeds of $300 million at the mid-point of the IPO price range. Overall, we believe that...

Arun George

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