HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Imeik Technology Development C / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/imeik-technology-development-co-ltd" target="_blank" data-smartkarma-citation="entities:32170:1" rel="noopener">Imeik Technology Development (300896 CH)</a> is undoubtedly one of the hottest stars in the capital market in 2021. At the beginning of 2021, its share price was once over RMB1300/share, making it the third company whose share price exceeded RMB1000/share in the history of A-share market. After that, Imeik’s share price reentered the upward trend after a period of correction. As of July 16, 2021, its share price was RMB773.19/share, with a market value of RMB167.3 billion. However, interestingly, the revenue of Imeik in 2020 was just RMB700 million and its net profit was RMB433 million. So, could Imerk support its high valuation?</p>

Imeik Technology Development (300896 CH) is undoubtedly one of the hottest stars in the capital market in 2021. At the beginning of 2021, its share price was once over RMB1300/share, making it the third company whose share price exceeded RMB1000/share in the history of A-share market. After that, Imeik’s share price reentered the upward trend after a period of correction. As of July 16, 2021, its share price was RMB773.19/share, with a market value of RMB167.3 billion. However, interestingly, the revenue of Imeik in 2020 was just RMB700 million and its net profit was RMB433 million. So, could Imerk support its high valuation?

Imeik Technology Development (300896.CH) - The Valuation Bubble?

Equity Capital Markets

Suzhou Nanomicro Technology  / Equity Capital Markets

<p>Recently, <a href="https://www.smartkarma.com/entities/suzhou-nanomicro-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:33272:1" rel="noopener">Suzhou Nanomicro Technology (1778887D CH)</a> was approved to list on China SSE STAR Market. NanoMicro’s products cover a broad spectrum of applications including high performance Chromatography Media, solid phase extraction (SPE) sorbents, Particle Size Standards, Magnetic Particles, LCD Spacers, ACF Conductive Particles, and various other micro particles. In fact, the biopharmaceutical industry is even more inseparable from microsphere technology, and chromatography packing/chromatographic medium is widely used for isolation and purification. In the past, the market was highly monopolized by foreign manufacturers, but NanoMicro successfully broke through the blockade on techniques. At present, NanoMicro is one of the few companies in the world that can simultaneously produce inorganic and organic high-performance nanoparticles on a large scale, which is an investment opportunity that cannot be missed.</p>

Recently, Suzhou Nanomicro Technology (1778887D CH) was approved to list on China SSE STAR Market. NanoMicro’s products cover a broad spectrum of applications including high performance Chromatography Media, solid phase extraction (SPE) sorbents, Particle Size Standards, Magnetic Particles, LCD Spacers, ACF Conductive Particles, and various other micro particles. In fact, the biopharmaceutical industry is even more inseparable from microsphere technology, and chromatography packing/chromatographic medium is widely used for isolation and purification. In the past, the market was highly monopolized by foreign manufacturers, but NanoMicro successfully broke through the blockade on techniques. At present, NanoMicro is one of the few companies in the world that can simultaneously produce inorganic and organic high-performance nanoparticles on a large scale, which is an investment opportunity that cannot be missed.

Pre-IPO Suzhou NanoMicro Tech - A Good Company You Don't Want to Miss

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.

Shanghai HeartCare Medical Technology / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/shanghai-heartcare-medical-technology-corporation-limited" target="_blank" data-smartkarma-citation="entities:32192:1" rel="noopener">Shanghai HeartCare Medical Technology (HMT HK)</a> is a China-based neuro-interventional medical device manufacturer with a product portfolio that spans the treatment and prevention of ischemic stroke to the treatment of haemorrhagic stroke. HeartCare’s product portfolio consists of a total of 23 commercialised products and product candidates, including four ischemic stroke treatment devices with NMPA approval.</p><p>HearCare’s shareholders include <a href="https://www.smartkarma.com/entities/shanghai-fosun-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:8045:1" rel="noopener">Shanghai Fosun Pharmaceutical (Group) (2196 HK)</a>, Temasek, Lake Bleu Capital, <a href="https://www.smartkarma.com/entities/china-international-capital-corporation-ltd" target="_blank" data-smartkarma-citation="entities:1071:1" rel="noopener">China International Capital Corporation (3908 HK)</a> and Canada Pension Plan Investment Board (through a special purpose vehicle). HeartCare is set to pre-market an HKEx IPO to raise $300 million this quarter, according to press reports. </p><div class="content-highlight"><p>HeartCare only started to generate revenue in 1Q20 through the commercialisation of two products (<em>SupSelek</em> and <em>ExtraFlex</em>). <em>Captor</em> thrombectomy device, a core product, was commercialised in December 2020 and <em>Fullblock</em> balloon guiding catheter received NMPA approval in December 2020. HeartCare aims to commercialise nine currently late-stage product candidates in 2021 and ten currently earlier-stage product candidates between 2022 and 2025. With a strong near-term commercialisation pipeline, HeartCare has shifted from a concept to a revenue-generating stock. Overall, we believe that HeartCare’s product portfolio is attractive. </p></div>

Shanghai HeartCare Medical Technology (HMT HK) is a China-based neuro-interventional medical device manufacturer with a product portfolio that spans the treatment and prevention of ischemic stroke to the treatment of haemorrhagic stroke. HeartCare’s product portfolio consists of a total of 23 commercialised products and product candidates, including four ischemic stroke treatment devices with NMPA approval.HearCare’s shareholders include Shanghai Fosun Pharmaceutical (Group) (2196 HK), Temasek, Lake Bleu Capital, China International Capital Corporation (3908 HK) and Canada Pension Plan Investment Board (through a special purpose vehicle). HeartCare is set to pre-market an HKEx IPO to raise $300 million this quarter, according to press reports. HeartCare only started to generate revenue in 1Q20 through the commercialisation of two products (SupSelek and ExtraFlex). Captor thrombectomy device, a core product, was commercialised in December 2020 and Fullblock balloon guiding catheter received NMPA approval in December 2020. HeartCare aims to commercialise nine currently late-stage product candidates in 2021 and ten currently earlier-stage product candidates between 2022 and 2025. With a strong near-term commercialisation pipeline, HeartCare has shifted from a concept to a revenue-generating stock. Overall, we believe that HeartCare’s product portfolio is attractive. 

Shanghai HeartCare Medical IPO Initiation: Surviving Strokes

<p>On February 24, 2021, <a href="https://www.smartkarma.com/entities/apollomics-inc" target="_blank" data-smartkarma-citation="entities:32186:1" rel="noopener">Apollomics Inc (1435488D US)</a> applied to be listed on the main board of the Hong Kong Stock Exchange. The Company is an innovative biotechnology company focusing on the discovery and development of oncology therapies. Apollomics intends to use the proceeds of this fundraising for R&amp;D activities, preparation for registration filings, commercial process development, manufacturing registrational trial material, expansion of business and other general corporate purposes. The following mainly provided insights on its major products in the pipeline.</p>

On February 24, 2021, Apollomics Inc (1435488D US) applied to be listed on the main board of the Hong Kong Stock Exchange. The Company is an innovative biotechnology company focusing on the discovery and development of oncology therapies. Apollomics intends to use the proceeds of this fundraising for R&amp;D activities, preparation for registration filings, commercial process development, manufacturing registrational trial material, expansion of business and other general corporate purposes. The following mainly provided insights on its major products in the pipeline.

Pre-IPO Apollomics - Concerns on Competition and Commercialization Despite Some Promising Products

Sciclone Pharmaceuticals / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/sciclone-pharmaceuticals-holdings-limited" target="_blank" data-smartkarma-citation="entities:17351:1" rel="noopener">Sciclone Pharmaceuticals (6600 HK)</a> is a biopharmaceutical company with an integrated platform for product development and commercialisation of drugs in the oncology and severe infection therapeutic areas. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/sciclone-pharmaceuticals-ipo-initiation-a-hard-sell" target="_blank" data-smartkarma-citation="insights:48114" rel="noopener">SciClone Pharmaceuticals IPO Initiation: A Hard Sell</a>, we stated that SciClone is a less than ideal IPO candidate. Despite efforts at diversification, SciClone is highly dependent on a single product, Zadaxin, which was launched in 1996. The risk to Zadaxin’s sales remains undiminished. The large pre-IPO dividends by existing shareholders in face of these challenges also sends the wrong message to potential IPO investors. Overall, on a fundamental basis, we are inclined to give this IPO a pass. </p></div><div><p>SciClone has launched its Hong Kong IPO at an indicative price range of HK$17.20-18.80 per share to raise net proceeds of HK$1,950.4 million ($252 million), at the mid-point of the price range. The raise is materially below the original target of a $500 million raise. Eleven cornerstone investors will subscribe for $133.7 million of the offer shares (49.65% of the offer shares at the mid-point of the IPO price). The cornerstone investors are largely domestic funds and lack international blue-chip names.</p></div><div><div><div class="content-highlight"><p>Relative valuation suggests that SciClone trades at a material discount to peers at the proposed IPO price range. We think that this discount is warranted due to SciClone's heavy reliance on Zadaxin, which faces ongoing challenges. Consequently, we are inclined to give this IPO a pass as our concerns on the fundamentals more than offset the "cheap" valuation.</p></div></div></div>

Sciclone Pharmaceuticals (6600 HK) is a biopharmaceutical company with an integrated platform for product development and commercialisation of drugs in the oncology and severe infection therapeutic areas. In SciClone Pharmaceuticals IPO Initiation: A Hard Sell, we stated that SciClone is a less than ideal IPO candidate. Despite efforts at diversification, SciClone is highly dependent on a single product, Zadaxin, which was launched in 1996. The risk to Zadaxin’s sales remains undiminished. The large pre-IPO dividends by existing shareholders in face of these challenges also sends the wrong message to potential IPO investors. Overall, on a fundamental basis, we are inclined to give this IPO a pass. SciClone has launched its Hong Kong IPO at an indicative price range of HK$17.20-18.80 per share to raise net proceeds of HK$1,950.4 million ($252 million), at the mid-point of the price range. The raise is materially below the original target of a $500 million raise. Eleven cornerstone investors will subscribe for $133.7 million of the offer shares (49.65% of the offer shares at the mid-point of the IPO price). The cornerstone investors are largely domestic funds and lack international blue-chip names.Relative valuation suggests that SciClone trades at a material discount to peers at the proposed IPO price range. We think that this discount is warranted due to SciClone's heavy reliance on Zadaxin, which faces ongoing challenges. Consequently, we are inclined to give this IPO a pass as our concerns on the fundamentals more than offset the "cheap" valuation.

SciClone Pharmaceuticals IPO: Valuation Insights

China

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. is a pharmaceutical company. Through its subsidiaries, the Company manufactures genetic medicines, Chinese traditional medicines, diagnostic products, and medical instruments, provides technology, marketing, and advertising services, as well as invests in import and export trading.

Shanghai Fosun Pharmaceutical (Group) (600196 CH)

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Shanghai Fosun Pharmaceutical (Group) (600196 CH)

Imeik Technology Development (300896.CH) - The Valuation Bubble?

This insight mainly analyzed Imeik in terms of its hyaluronic acid product business, botulinum toxin business, other products, the future business...

Xinyao (Criss) Wang

Pre-IPO Suzhou NanoMicro Tech - A Good Company You Don't Want to Miss

This article analyzed NanoMicro in terms of the market potential, industry characteristics, business prospects, profitability and potential...

Xinyao (Criss) Wang

Shanghai HeartCare Medical IPO Initiation: Surviving Strokes

HeartCare is set to pre-market an HKEx IPO to raise $300 million this quarter, according to press reports. Overall, we believe that HeartCare’s...

Arun George

Pre-IPO Apollomics - Concerns on Competition and Commercialization Despite Some Promising Products

This article provided insights on its major products in the pipeline in terms of competitive landscape, strength and challenges, as well as...

Xinyao (Criss) Wang

SciClone Pharmaceuticals IPO: Valuation Insights

SciClone has launched its IPO to raise net proceeds of $252m, at the mid-point of the price range. We recommend a pass as our concerns on the...

Arun George

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