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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dickson-concepts-intl-ltd" target="_blank" data-smartkarma-citation="entities:5052:1" rel="noopener">Dickson Concepts Intl (113 HK)</a> shareholders have voted against Sir Poon’s HK$7.20 per share offer. The vote marginally failed the &lt;10% of all disinterested shareholders' rejection threshold.</li>
<li>While painful, this deal break was arguably the correct outcome as the offer was below the net cash and Dickson is cash generative on an underlying basis. </li>
<li>Unlike the last HK deal break (Soundwill), the price action over the last two days indicated a done deal. My estimated break price is HK$5.00 (30% downside to last close).</li>
</ul>



Dickson Concepts Intl (113 HK) shareholders have voted against Sir Poon’s HK$7.20 per share offer. The vote marginally failed the &lt;10% of all disinterested shareholders' rejection threshold.
While painful, this deal break was arguably the correct outcome as the offer was below the net cash and Dickson is cash generative on an underlying basis. 
Unlike the last HK deal break (Soundwill), the price action over the last two days indicated a done deal. My estimated break price is HK$5.00 (30% downside to last close).


Dickson Concepts (113 HK): A Necessary HK Arbageddon

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Shanghai Henlius Biotech  / Equity Bottom-Up

<ul>
<li>The NewCo model can be considered as an "intermediate state" for Chinese biotech companies when they hopes to enter overseas markets, rather than a real success in internationalization.</li>
<li>After the announcement of Pfizer-Summit cooperation, share price of Summit plunged. Pfizer is clearly the beneficiary. The possibility of Summit being acquired could be reduced, which make investors unhappy.</li>
<li>Shares of Henlius surged. Thanks to Lin Lijun's dissenting vote, investors have the opportunity to profit at a higher price.Next goal is to be included in Hong Kong Stock Connect.</li>
</ul>


The NewCo model can be considered as an "intermediate state" for Chinese biotech companies when they hopes to enter overseas markets, rather than a real success in internationalization.
After the announcement of Pfizer-Summit cooperation, share price of Summit plunged. Pfizer is clearly the beneficiary. The possibility of Summit being acquired could be reduced, which make investors unhappy.
Shares of Henlius surged. Thanks to Lin Lijun's dissenting vote, investors have the opportunity to profit at a higher price.Next goal is to be included in Hong Kong Stock Connect.


China Healthcare Weekly (Mar.2) - NewCo Model, Pfizer-Summit Deal, Henlius to Enter HK Stock Connect

<ul>
<li>LVC increased its holding of Henlius by 1,110,900 shares on January 23, reflecting its high recognition of the Company and optimism on its prospects, despite the biosimilar VBP headwinds.</li>
<li>Even with concerns, LVC still repeatedly invested in Henlius at a valuation far higher than its actual value, offering support with real money during pre-IPO stage.</li>
<li>Lin Lijun’s dissenting vote was a deliberate decision. We are interested to see Lin's next move. Lin should have a very clear understanding of the true value of Henlius.</li>
</ul>


LVC increased its holding of Henlius by 1,110,900 shares on January 23, reflecting its high recognition of the Company and optimism on its prospects, despite the biosimilar VBP headwinds.
Even with concerns, LVC still repeatedly invested in Henlius at a valuation far higher than its actual value, offering support with real money during pre-IPO stage.
Lin Lijun’s dissenting vote was a deliberate decision. We are interested to see Lin's next move. Lin should have a very clear understanding of the true value of Henlius.


Shanghai Henlius Biotech (2696 HK) - LVC Increased Its Holding of Henlius Again

<ul>
<li>There have been quite a few M&amp;As in the field of TCM, with a clear trend of SOEs taking over TCM enterprises due to strategically significant and advantageous integration.</li>
<li>Whether a drug can be approved does not depend on whether it has entered Phase II/III trials. The areas with clearly unmet medical needs often indicate good investment opportunities.</li>
<li>The privatization of Henlius failed. Lin Lijun's dissenting vote was based on a deliberate decision. We are optimistic about the outlook of Henlius due to its strong fundamentals and internationalization. </li>
</ul>


There have been quite a few M&amp;As in the field of TCM, with a clear trend of SOEs taking over TCM enterprises due to strategically significant and advantageous integration.
Whether a drug can be approved does not depend on whether it has entered Phase II/III trials. The areas with clearly unmet medical needs often indicate good investment opportunities.
The privatization of Henlius failed. Lin Lijun's dissenting vote was based on a deliberate decision. We are optimistic about the outlook of Henlius due to its strong fundamentals and internationalization. 


China Healthcare Weekly (Jan.26) - Key Takeaways from the Failure of Henlius Privatization, TCM M&As

<ul>
<li>Lin Lijun voted against the privatization, which is in line with our analysis.Lin and some other long-term investors expressed their "dissatisfaction" by opposing the privatization due to disappointing Cancellation Price.</li>
<li>Due to deal break, Henlius’ share price could be under pressure in short term.Investors may need to wait until the implementation of biosimilar VBP in 2025 to see situation clearly.</li>
<li>Despite biosimilar VBP, we remain optimistic about the outlook of Henlius, because its future development positioning will not be limited to just biosimilars, but will focus on internationalization.</li>
</ul>


Lin Lijun voted against the privatization, which is in line with our analysis.Lin and some other long-term investors expressed their "dissatisfaction" by opposing the privatization due to disappointing Cancellation Price.
Due to deal break, Henlius’ share price could be under pressure in short term.Investors may need to wait until the implementation of biosimilar VBP in 2025 to see situation clearly.
Despite biosimilar VBP, we remain optimistic about the outlook of Henlius, because its future development positioning will not be limited to just biosimilars, but will focus on internationalization.


Shanghai Henlius Biotech (2696 HK) - About the Deal Break and the Valuation Outlook

China

Shanghai Henlius Biotech, Inc develops and produces drugs. The Company develops and produces monoclonal antibody biosimilar drugs, bio betters, novel monoclonal antibodys, and other drugs. Shanghai Henlius Biotech throughout China.

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Shanghai Henlius Biotech (2696 HK)

Dickson Concepts (113 HK): A Necessary HK Arbageddon

While painful, this deal break was arguably the correct outcome as the offer was below the net cash. My estimated break price is HK$5.00 (30%...

Arun George

China Healthcare Weekly (Mar.2) - NewCo Model, Pfizer-Summit Deal, Henlius to Enter HK Stock Connect

The NewCo model is just an "intermediate state" for Chinese Biotech. After Pfizer-Summit deal, the possibility of Summit being acquired is reduced....

Xinyao (Criss) Wang