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

The big data and AI solutions provider for healthcare sector in China, <a href="https://www.smartkarma.com/entities/yidu-tech-inc" target="_blank" data-smartkarma-citation="entities:29245:1" rel="noopener">Yidu Tech Inc (2158 HK)</a>  has set the terms for its IPO. The company was ranked no. 1 in terms of revenue among all healthcare big data solution providers in China in 2019.China is the world’s second largest healthcare market, and the country has been increasingly informatizing the healthcare system in order to improve the efficiency as well as close the huge healthcare resource gap to meet emerging demands for high quality holistic health management.The company plans to issue 156.5m shares at an indicative IPO price range of HK$23.5-26.5 per share, and at the midpoint of the IPO price range of HK$24.90 per share, Yidu Tech will raise gross proceeds of US$503m (HK$3.9bn).In our previous insights on the company’s IPO, we examined the company’s business model, segments, revenues and profitability. In this insight, we examine the company’s valuation.

The big data and AI solutions provider for healthcare sector in China, Yidu Tech Inc (2158 HK)  has set the terms for its IPO. The company was ranked no. 1 in terms of revenue among all healthcare big data solution providers in China in 2019.China is the world’s second largest healthcare market, and the country has been increasingly informatizing the healthcare system in order to improve the efficiency as well as close the huge healthcare resource gap to meet emerging demands for high quality holistic health management.The company plans to issue 156.5m shares at an indicative IPO price range of HK$23.5-26.5 per share, and at the midpoint of the IPO price range of HK$24.90 per share, Yidu Tech will raise gross proceeds of US$503m (HK$3.9bn).In our previous insights on the company’s IPO, we examined the company’s business model, segments, revenues and profitability. In this insight, we examine the company’s valuation.

Yidu Tech IPO Valuation: Attractive at the Low-End but Superior Growth Profile Justifies the Premium

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

New Horizon Health  / Equity Capital Markets

New Horizon Health is a China-based cancer diagnostics company that has filed an Application Proof to list on the HKEX. The company has innovative screening technologies for colorectal, gastric, and potentially cervical cancer. The management team is accomplished and the pre-IPO investors are experienced healthcare funds. We view the company favorably and will provide a definitive view in a future Insight closer to the actual offering.

New Horizon Health is a China-based cancer diagnostics company that has filed an Application Proof to list on the HKEX. The company has innovative screening technologies for colorectal, gastric, and potentially cervical cancer. The management team is accomplished and the pre-IPO investors are experienced healthcare funds. We view the company favorably and will provide a definitive view in a future Insight closer to the actual offering.

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

At long last, Hang Seng Indexes (HSIL) has released the consultation paper on the "Proposal to enhance 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> as regards continuing to serve as the most representative and important benchmark of the Hong Kong stock market". Market participants have until 24 January to submit their views to the HSIL.There are 5 main proposals in the consultation paper:<ol>
<li>Select constituents by industry group based on a target coverage for each industry group</li>
<li>Increase the number of constituents to between 65 to 80</li>
<li>Removal of the Minimum Listing History requirement for eligible candidates</li>
<li>Maintain a certain number of constituents classified as Hong Kong companies to sustain the level of representation of Hong Kong portion in the index</li>
<li>Lower the weighting cap of individual constituents from 10% to 8%, and increase the weighting cap of WVRs and Secondary Listings from 5% to 8%.</li>
</ol>The simulated one-way turnover of increasing the number of constituents to between 65-80 is estimated at 15-20% and HSIL proposes to implement the transition to the enhanced methodology within one year.In this Insight, we look at the impact on the index from the proposed changes.

At long last, Hang Seng Indexes (HSIL) has released the consultation paper on the "Proposal to enhance the Hong Kong Hang Seng Index (HSI INDEX) as regards continuing to serve as the most representative and important benchmark of the Hong Kong stock market". Market participants have until 24 January to submit their views to the HSIL.There are 5 main proposals in the consultation paper:
Select constituents by industry group based on a target coverage for each industry group
Increase the number of constituents to between 65 to 80
Removal of the Minimum Listing History requirement for eligible candidates
Maintain a certain number of constituents classified as Hong Kong companies to sustain the level of representation of Hong Kong portion in the index
Lower the weighting cap of individual constituents from 10% to 8%, and increase the weighting cap of WVRs and Secondary Listings from 5% to 8%.
The simulated one-way turnover of increasing the number of constituents to between 65-80 is estimated at 15-20% and HSIL proposes to implement the transition to the enhanced methodology within one year.In this Insight, we look at the impact on the index from the proposed changes.

HSI Market Consultation - Wide Ranging Changes Proposed

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Thematic (Sector/Industry)

*Reversing Course Again: On April 3, 2020, the European Insurance and Occupational Pensions Authority (EIOPA) - the European Union’s financial regulatory body which replaced the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) – in the context of the corona virus, released a statement urging insurers to “temporarily suspend all discretionary dividend distributions and share buybacks aimed at remunerating shareholders” in order to preserve capital. In an odd reversal of course, EIOPA has updated its commentary surrounding European insurance capital management; and  *Asia-Pacific Insurers Still At Risk: Asia-Pacific insurance counterparts previously acted in capital solidarity with their Western peer during COVID-19. Many Asia-Pacific insurers purchased USD-denominated assets in their desperate search for yield in this low/negative rate environment where the impact of credit default and ratings agency downgrades on their investment portfolios is likely to continue to be outsized and challenge capital their ratios. We are hopeful that the Asia-Pacific insurers - particularly in Japan, Australia, Taiwan, and South Korea – don’t behave as desperately as their European counterparts have.

*Reversing Course Again: On April 3, 2020, the European Insurance and Occupational Pensions Authority (EIOPA) - the European Union’s financial regulatory body which replaced the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) – in the context of the corona virus, released a statement urging insurers to “temporarily suspend all discretionary dividend distributions and share buybacks aimed at remunerating shareholders” in order to preserve capital. In an odd reversal of course, EIOPA has updated its commentary surrounding European insurance capital management; and  *Asia-Pacific Insurers Still At Risk: Asia-Pacific insurance counterparts previously acted in capital solidarity with their Western peer during COVID-19. Many Asia-Pacific insurers purchased USD-denominated assets in their desperate search for yield in this low/negative rate environment where the impact of credit default and ratings agency downgrades on their investment portfolios is likely to continue to be outsized and challenge capital their ratios. We are hopeful that the Asia-Pacific insurers - particularly in Japan, Australia, Taiwan, and South Korea – don’t behave as desperately as their European counterparts have. 

<a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> , the largest online healthcare platform and retail pharmacy in China started trading on the 7th of December. The company set the final IPO pricing at the upper end of the IPO price range of HK$70.58 per share and raised net proceeds of HK$26.46bn (approximately US$3.41bn).JD Health’s shares had a bold debut at the IPO, hitting an intra-day high of HK$123.3 per share, about 75% higher than the IPO price. The company’s shares are currently trading at HK$166 per share (end of today’s trading), a 135% increase compared to the IPO price of HK$70.58 per share.In our previous insights on the company’s IPO, we examined the company’s business model, financials, valuations and a comparison with its peers.We highlighted that the company has a strong business model which is poised to benefit from the structural changes in the Chinese healthcare market that is currently shifting towards digitisation. Moreover, the Covid-19 outbreak has further accelerated this transition towards online channels, and we believe the company’s business is sustainable beyond Covid-19.

JD Health (6618 HK) , the largest online healthcare platform and retail pharmacy in China started trading on the 7th of December. The company set the final IPO pricing at the upper end of the IPO price range of HK$70.58 per share and raised net proceeds of HK$26.46bn (approximately US$3.41bn).JD Health’s shares had a bold debut at the IPO, hitting an intra-day high of HK$123.3 per share, about 75% higher than the IPO price. The company’s shares are currently trading at HK$166 per share (end of today’s trading), a 135% increase compared to the IPO price of HK$70.58 per share.In our previous insights on the company’s IPO, we examined the company’s business model, financials, valuations and a comparison with its peers.We highlighted that the company has a strong business model which is poised to benefit from the structural changes in the Chinese healthcare market that is currently shifting towards digitisation. Moreover, the Covid-19 outbreak has further accelerated this transition towards online channels, and we believe the company’s business is sustainable beyond Covid-19.

JD Health IPO Trading Update: Be Ready to Buy if It Drops Post Index Inclusion

China

Ping An Healthcare and Technology Company Limited provides health care software solutions. The Company offers mobile platform for online consultation, hospital referral and appointment, health management, and wellness interaction services, as well as connects consumers and patients with health care resources. Ping An Healthcare and Technology serves customers in China.

Ping An Healthcare and Technology (1833 HK)

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Ping An Healthcare and Technology (1833 HK)

Yidu Tech IPO Valuation: Attractive at the Low-End but Superior Growth Profile Justifies the Premium

The big data and AI solutions provider for healthcare sector in China, Yidu Tech has set the terms for its IPO and in this insight, we examine Yidu...

Shifara Samsudeen, FCMA, CGMA

New Horizon IPO: Leaning Positive

New Horizon Health is a cancer diagnostics company that plans to list on the HKEX. The company has innovative tests for CRC, gastric, and...

Kemp Dolliver, CFA

HSI Market Consultation - Wide Ranging Changes Proposed

HSIL has announced the market consultation for the Hang Seng Index. The conclusions should be announced in February. If the market agrees to most...

Brian Freitas

Asian Insurers – Mea, Mea EIOPA

ASIA INSURERS: On April 3, 2020, EIOPA temporarily suspended capital management activities," but just reversed course. Many Asia-Pacific insurers...

Thomas J. Monaco

JD Health IPO Trading Update: Be Ready to Buy if It Drops Post Index Inclusion

JD Health’s shares had a bold debut at the IPO and the shares are currently trading at HK$166 per share (end of today’s trading), a 135% increase...

Shifara Samsudeen, FCMA, CGMA

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