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

Zylox-Tonbridge Medical Technology / Equity Capital Markets

Zylox-Tonbridge Medical Technology (2190 HK)

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<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>
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<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>
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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. 

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.

<p>Zylox-Tonbridge, a leading China-based neuro- and peripheral interventional device company, is looking to raise up to USD 400m via a Hong Kong listing.  </p><p>In this note, we look at two key products of the company, namely the Thrombite clot retriever for acute ischemic stroke treatment, and Ultrafree Drug Coated PTA Balloon Catheter for the arterial stenosis or occlusion. The Thrombite clot retriever demonstrated efficacy and safety that is in-line with the benchmark product developed by international device player, while the reading from head-to-head clinical research of Ultrafree Drug Coated PTA Ballon Catether appears to be better than its competitor product. The key challenge for the company is the competition in each of its product lines as the company does not have much early bird advantage in the field. </p><p>Both the management team and pre-IPO investors are OK but not the best you can expect in a hot medical device listing.</p>

Zylox-Tonbridge, a leading China-based neuro- and peripheral interventional device company, is looking to raise up to USD 400m via a Hong Kong listing.  In this note, we look at two key products of the company, namely the Thrombite clot retriever for acute ischemic stroke treatment, and Ultrafree Drug Coated PTA Balloon Catheter for the arterial stenosis or occlusion. The Thrombite clot retriever demonstrated efficacy and safety that is in-line with the benchmark product developed by international device player, while the reading from head-to-head clinical research of Ultrafree Drug Coated PTA Ballon Catether appears to be better than its competitor product. The key challenge for the company is the competition in each of its product lines as the company does not have much early bird advantage in the field. Both the management team and pre-IPO investors are OK but not the best you can expect in a hot medical device listing.

Zylox-Tonbridge (归创通桥) Pre-IPO: Competition Is the Key Concern

Shanghai HeartCare Medical Technology / Equity Capital Markets

Shanghai HeartCare Medical Technology (6609 HK)

<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

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<p>On January 27<sup>th</sup>, 2021, <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> filed its prospectus on the Hong Kong Stock Exchange. HeartCare was founded in 2016, focusing on the development and industrialization of neuro-interventional technology innovations for stroke prevention and treatment. Over the past four years or so, the Company has raised five rounds of funding, with three rounds of equity funding last year, and now it officially launches its IPO plan. HeartCare has not been established for a long time, why could it frequently obtain the capital favor?</p>

On January 27th, 2021, Shanghai HeartCare Medical Technology (HMT HK) filed its prospectus on the Hong Kong Stock Exchange. HeartCare was founded in 2016, focusing on the development and industrialization of neuro-interventional technology innovations for stroke prevention and treatment. Over the past four years or so, the Company has raised five rounds of funding, with three rounds of equity funding last year, and now it officially launches its IPO plan. HeartCare has not been established for a long time, why could it frequently obtain the capital favor?

Pre-IPO Shanghai HeartCare Medical Technology - Promising Market but Fierce Competition

China

Engages in research, development, manufacture and sale of neuro-interventional medical devices

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Shanghai HeartCare Medical Technology (6609 HK)

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

Zylox-Tonbridge (归创通桥) Pre-IPO: Competition Is the Key Concern

Zylox-Tonbridge is a leading neuro- and peripheral vascular interventional device company with a comprehensive product coverage. It has two main...

Ke Yan, CFA, FRM

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 Shanghai HeartCare Medical Technology - Promising Market but Fierce Competition

This article analyzed HeartCare Medical in terms of industry characteristics in China, market potential, competitive landscape, financial position,...

Xinyao (Criss) Wang

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