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)

<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.

Kindstar Globalgene Technology / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/kindstar-globalgene-technology-inc" target="_blank" data-smartkarma-citation="entities:32175:1" rel="noopener">Kindstar Globalgene Technology (9960 HK)</a> is a leading independent esoteric clinical testing service provider in China. Kindstar provides full-spectrum testing services primarily to hospitals in various speciality areas, including hematology, genetic diseases and rare diseases, infectious diseases, oncology, neurology and maternity-related diseases. In 2020, Kindstar had a 4.1% revenue market share of the total esoteric testing market in China, according to Frost &amp; Sullivan. </p></div><div><p>At the proposed IPO price range of HK$8.60-9.78 per share, Kindstar will have a market cap of HK$7,788.3-8,857.0 ($1.0-1.1 billion). At the mid-point of the IPO price range, the total net proceeds are HK$1,931.1 million ($250 million). </p></div><div><p>Seven cornerstone investors will subscribe for $140 million of the offer shares (52.2% of the offer shares at the mid-point of the IPO price). The cornerstone investors include BlackRock, CPE, Snow Lake Capital, Carmignac Funds, Natixis Investment Managers, Athos Capital and IvyRock Asset Management.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/kindstar-globalgene-ipo-initiation-testing-testing" target="_blank" data-smartkarma-citation="insights:53731" rel="noopener">Kindstar Globalgene IPO Initiation: Testing, Testing</a>, we stated that the business has successfully overcome the negative impact of the COVID-19 pandemic, with most of its segments displaying either a return to growth or lower revenue declines in 4Q20 in comparison to 9M20. In combination, with solid operating leverage and cash generation, we think that the Kindstar IPO is worth a look. Overall, we would participate in the IPO due to an attractive IPO price range.</p></div></div></div>

Kindstar Globalgene Technology (9960 HK) is a leading independent esoteric clinical testing service provider in China. Kindstar provides full-spectrum testing services primarily to hospitals in various speciality areas, including hematology, genetic diseases and rare diseases, infectious diseases, oncology, neurology and maternity-related diseases. In 2020, Kindstar had a 4.1% revenue market share of the total esoteric testing market in China, according to Frost &amp; Sullivan. At the proposed IPO price range of HK$8.60-9.78 per share, Kindstar will have a market cap of HK$7,788.3-8,857.0 ($1.0-1.1 billion). At the mid-point of the IPO price range, the total net proceeds are HK$1,931.1 million ($250 million). Seven cornerstone investors will subscribe for $140 million of the offer shares (52.2% of the offer shares at the mid-point of the IPO price). The cornerstone investors include BlackRock, CPE, Snow Lake Capital, Carmignac Funds, Natixis Investment Managers, Athos Capital and IvyRock Asset Management.In Kindstar Globalgene IPO Initiation: Testing, Testing, we stated that the business has successfully overcome the negative impact of the COVID-19 pandemic, with most of its segments displaying either a return to growth or lower revenue declines in 4Q20 in comparison to 9M20. In combination, with solid operating leverage and cash generation, we think that the Kindstar IPO is worth a look. Overall, we would participate in the IPO due to an attractive IPO price range.

Kindstar Globalgene IPO: Valuation Insights

<p><a href="https://www.smartkarma.com/entities/kindstar-globalgene-technology-inc" target="_blank" data-smartkarma-citation="entities:32175:1" rel="noopener">Kindstar Globalgene Technology (1868874D HK)</a> is a leading independent esoteric clinical testing service provider in China. Kindstar provides full-spectrum testing services primarily to hospitals in various speciality areas, including hematology, genetic diseases and rare diseases, infectious diseases, oncology, neurology and maternity-related diseases. In 2020, Kindstar had a 4.1% revenue market share of the total esoteric testing market in China, according to Frost &amp; Sullivan. </p><p>Kindstar is set to launch an HKEx IPO to raise around $300 million, according to press reports. Kindstar’s shareholders include Morningside, Investcorp, KPCB, Mayo Clinic and CPE.</p><p>ICLs (independent clinical laboratory) such as Kindstar provide hospitals with a wide range of testing services that they are not capable of conducting in-house. China’s ICL market consists of routine and esoteric testing. The size of China’s esoteric testing market is forecasted to increase from RMB20,057.6 million in 2020 to RMB27,860.1 million in 2025, representing a CAGR of 6.8% from 2020 to 2025, according to Frost &amp; Sullivan. </p><div class="content-highlight"><p>Kindstar is well-paced to benefit from this market opportunity as it has the largest esoteric testing portfolio among all the independent esoteric testing providers in China. The business has successfully overcome the negative impact of the COVID-19 pandemic, with most of its segments displaying either a return to growth or lower revenue declines in 4Q20 in comparison to 9M20. In combination, with solid operating leverage and cash generation, we think that the Kindstar IPO is worth a look. </p></div>

Kindstar Globalgene Technology (1868874D HK) is a leading independent esoteric clinical testing service provider in China. Kindstar provides full-spectrum testing services primarily to hospitals in various speciality areas, including hematology, genetic diseases and rare diseases, infectious diseases, oncology, neurology and maternity-related diseases. In 2020, Kindstar had a 4.1% revenue market share of the total esoteric testing market in China, according to Frost &amp; Sullivan. Kindstar is set to launch an HKEx IPO to raise around $300 million, according to press reports. Kindstar’s shareholders include Morningside, Investcorp, KPCB, Mayo Clinic and CPE.ICLs (independent clinical laboratory) such as Kindstar provide hospitals with a wide range of testing services that they are not capable of conducting in-house. China’s ICL market consists of routine and esoteric testing. The size of China’s esoteric testing market is forecasted to increase from RMB20,057.6 million in 2020 to RMB27,860.1 million in 2025, representing a CAGR of 6.8% from 2020 to 2025, according to Frost &amp; Sullivan. Kindstar is well-paced to benefit from this market opportunity as it has the largest esoteric testing portfolio among all the independent esoteric testing providers in China. The business has successfully overcome the negative impact of the COVID-19 pandemic, with most of its segments displaying either a return to growth or lower revenue declines in 4Q20 in comparison to 9M20. In combination, with solid operating leverage and cash generation, we think that the Kindstar IPO is worth a look. 

Kindstar Globalgene IPO Initiation: Testing, Testing

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>In this edition of the Smartkarma North Asia Weekly, it summarizes some of the top insights on Smartkarma in the past week covering Japan, HK/China, and the Korean stock markets. The top topics are below:</p><p><strong>1) POTUS Executive Order: Updated List of Chinese Stocks to Be Deleted by Major Indices</strong></p><p><strong>2) Kanzhun IPO</strong></p><p><strong>3) Angelalign IPO </strong></p><p><strong>4) China: Allows Families to Have Three Children</strong></p><p><strong>5) HYBE Rights Offering</strong></p><p><strong>6) China Infrastructure REITs</strong></p><p><strong>7) Aihuishou IPO</strong></p><p><strong>8) Full Truck Alliance IPO</strong></p><p><strong>9) Enjin IPO</strong></p><p><strong>10) Xpeng: Positive Momentum Back</strong></p><p><strong>11) Tesla China Losing Market Share</strong></p><p><strong>12) CStone Pharma (2616.HK) - Time for a Revaluation</strong></p><p><strong>13) JD Health Lock-Up Expiration</strong></p><p><strong>14) Passive Money Tracking KOSPI</strong></p><p><strong>15) SK IE Tech KOSPI 200 Fast-Entry</strong></p><p><strong>16) DL Holdings with Recent Tender’s Increased Shares: Index Treatment </strong></p><p><strong>17) WH Group (288 HK)</strong></p>

In this edition of the Smartkarma North Asia Weekly, it summarizes some of the top insights on Smartkarma in the past week covering Japan, HK/China, and the Korean stock markets. The top topics are below:1) POTUS Executive Order: Updated List of Chinese Stocks to Be Deleted by Major Indices2) Kanzhun IPO3) Angelalign IPO 4) China: Allows Families to Have Three Children5) HYBE Rights Offering6) China Infrastructure REITs7) Aihuishou IPO8) Full Truck Alliance IPO9) Enjin IPO10) Xpeng: Positive Momentum Back11) Tesla China Losing Market Share12) CStone Pharma (2616.HK) - Time for a Revaluation13) JD Health Lock-Up Expiration14) Passive Money Tracking KOSPI15) SK IE Tech KOSPI 200 Fast-Entry16) DL Holdings with Recent Tender’s Increased Shares: Index Treatment 17) WH Group (288 HK)

Smartkarma North Asia Weekly: POTUS Order, Kanzhun, Angelalign, & 3 Children Policy in China

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.

Equity Bottom-Up

<p>China's Politburo hosted a meeting on May 31st to review the population policy (关于优化生育政策促进人口长期均衡发展的决定, hereafter Decision). The meeting pointed out that allowing couples to have third child will improve the demographic structure of China to counter the aging population. The meeting also mentioned that the government will start to implement policies to encourage the third child, with social and economic support. In this note, I take a brief look at the China's past child birth policy changes and three beneficiaries of the new birth policy. I am of the view that the benefit of the new policy will be marginal but the direction is plausible. </p>

China's Politburo hosted a meeting on May 31st to review the population policy (关于优化生育政策促进人口长期均衡发展的决定, hereafter Decision). The meeting pointed out that allowing couples to have third child will improve the demographic structure of China to counter the aging population. The meeting also mentioned that the government will start to implement policies to encourage the third child, with social and economic support. In this note, I take a brief look at the China's past child birth policy changes and three beneficiaries of the new birth policy. I am of the view that the benefit of the new policy will be marginal but the direction is plausible. 

China: 3rd Child Policy and 3 Beneficiaries

China

Suzhou Basecare Medical is a China-based company specializing in assisted reproductive genetic testing solutions. It researches, develops, manufactures, and sells genetic testing kits, equipment, instruments, and consumables, with key products including preimplantation genetic testing for aneuploidy (PGT-A) kits. The company was founded in 2010 and is headquartered in Suzhou, Jiangsu, China.

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Suzhou Basecare Medical (2170 HK)

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

Kindstar Globalgene IPO: Valuation Insights

At the mid-point of the IPO price range, the total net proceeds are HK$1,931.1 million ($250 million). Overall, we would participate in the IPO due...

Arun George

Kindstar Globalgene IPO Initiation: Testing, Testing

Kindstar is set to launch an IPO to raise around $300 m. It has successfully overcome the COVID-19 pandemic. In combination, with operating...

Arun George

Smartkarma North Asia Weekly: POTUS Order, Kanzhun, Angelalign, & 3 Children Policy in China

In this edition of the Smartkarma North Asia Weekly, it summarizes some of the top insights on Smartkarma in the past week covering Japan, HK...

Douglas Kim

China: 3rd Child Policy and 3 Beneficiaries

I take a brief look at the China's past child birth policy changes and three beneficiaries of the exposure to the new birth policy.

Ke Yan, CFA, FRM

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