Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/oscar-health-inc" target="_blank" data-smartkarma-citation="entities:31499:1" rel="noopener">Oscar Health (OSCR US)</a>  completed its IPO in March and sold to investors ~36.4 million shares of Class A common stock at IPO price of $39.00 per share. Therefore, insurtech unicorn raised net proceeds of $1.3 billion and used a portion of funds to repay ~$153 million of borrowings under the Term Loan Facility. However, Oscar Health shares fell ~43% since IPO and could find the bottom near $22.00 per share. We believe that upcoming IPO of insurtech competitor Bright Health and strong financial results for 1Q CY21 may drive valuation of Oscar Health higher. Company plans to deliver revenue growth and expects direct and assumed policy premiums will be ~$3.1 billion at midpoint for CY21.

Oscar Health (OSCR US)  completed its IPO in March and sold to investors ~36.4 million shares of Class A common stock at IPO price of $39.00 per share. Therefore, insurtech unicorn raised net proceeds of $1.3 billion and used a portion of funds to repay ~$153 million of borrowings under the Term Loan Facility. However, Oscar Health shares fell ~43% since IPO and could find the bottom near $22.00 per share. We believe that upcoming IPO of insurtech competitor Bright Health and strong financial results for 1Q CY21 may drive valuation of Oscar Health higher. Company plans to deliver revenue growth and expects direct and assumed policy premiums will be ~$3.1 billion at midpoint for CY21.

Will Bright Health Upcoming IPO Drive Valuation of Oscar Health Higher?

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

<ul><li>PLANB's share price increased 21% in the previous three months thanks to the ad industry's improvement, which is likely to fuel a big earnings turnaround in 4Q20E.</li><li>We forecast a net profit of Bt117mn in 4Q20E for PLANB, falling by 48% YoY but rebounding strongly from the net profit of only Bt1mn in 3Q20, thanks to the improvement in revenue and the gross profit margin (GPM).</li><li>In 2021E, we expect PLANB to earn revenue of Bt450mn related to sponsorship and marketing management for the Tokyo 2020 Olympics, in line with PLANB's guidance.</li></ul>

PLANB's share price increased 21% in the previous three months thanks to the ad industry's improvement, which is likely to fuel a big earnings turnaround in 4Q20E.We forecast a net profit of Bt117mn in 4Q20E for PLANB, falling by 48% YoY but rebounding strongly from the net profit of only Bt1mn in 3Q20, thanks to the improvement in revenue and the gross profit margin (GPM).In 2021E, we expect PLANB to earn revenue of Bt450mn related to sponsorship and marketing management for the Tokyo 2020 Olympics, in line with PLANB's guidance.

Net Profit to Turn Around QoQ in 4Q20E - Hold

<ul><li>We upgrade NWR's rating to Buy with the new target price of Bt0.68, pegged with 2021E PBV of 0.5x.</li><li>The positives for NWR include not only its success in gaining a record-high backlog, which will secure its top line, but also sustainable margin improvement.</li><li>The low PBV benchmark is justified in light of the volatile earnings risk.</li></ul>

We upgrade NWR's rating to Buy with the new target price of Bt0.68, pegged with 2021E PBV of 0.5x.The positives for NWR include not only its success in gaining a record-high backlog, which will secure its top line, but also sustainable margin improvement.The low PBV benchmark is justified in light of the volatile earnings risk.

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

Fullerton Healthcare / Equity Capital Markets

The listing of Fullerton Healthcare has been delayed by the Monetary Authority of Singapore in response to letters  (i.e., hate mail from doctors) questioning the company's business model.  We do not know the contents of these letters nor MAS' view of them, but think the deal will go through after a "tasteful delay".We reached this conclusion based on our experience with similar situations in the US, and the fact that MAS approved the company's debt offering in June.

The listing of Fullerton Healthcare has been delayed by the Monetary Authority of Singapore in response to letters  (i.e., hate mail from doctors) questioning the company's business model.  We do not know the contents of these letters nor MAS' view of them, but think the deal will go through after a "tasteful delay".We reached this conclusion based on our experience with similar situations in the US, and the fact that MAS approved the company's debt offering in June.

Ah, Foreign War Movies............................

M&A Reporting, CTFN

Jonathan Spitzer

M&A Reporting

CTFN

Bringing the marketplace leading coverage of mergers, events, and major corporate actions, CTFN has a team of seasoned reporters from Los Angeles to London, publishing news that advances stories that matter to event-driven investors and deal professionals.

Event-Driven

Growing troubles with the Affordable Care Act’s state exchanges, including the planned departure from multiple states by UnitedHealth Group and Humana and expected double digit increases in annual premiums by the big insurers, are expected to complicate the pending reviews of the two big healthcare mergers being conducted by the Department of Justice and state agencies.

Growing troubles with the Affordable Care Act’s state exchanges, including the planned departure from multiple states by UnitedHealth Group and Humana and expected double digit increases in annual premiums by the big insurers, are expected to complicate the pending reviews of the two big healthcare mergers being conducted by the Department of Justice and state agencies.

Obamacare Problems Complicate Health Insurer Mergers

United States

The Cigna Group operates as an insurance company. The Company offers life, accident, disability, supplemental, medicare, and dental insurance products and services. The Cigna Group serves individuals, families, and businesses worldwide.

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Cigna Group (CI US)

Will Bright Health Upcoming IPO Drive Valuation of Oscar Health Higher?

Oscar Health reduced quota share in 1Q CY21 and we expect GAAP revenue may grow 100%+ y/o/y this year with growing business segments MA, Small...

Andrei Zakharov

Net Profit to Turn Around QoQ in 4Q20E - Hold

PLANB's share price increased 21% in the previous three months thanks to the ad industry's improvement, which is likely to fuel a big earnings...

Krungthai XSpring

Improving Outlook on Strong Margin

We upgrade NWR's rating to Buy with the new target price of Bt0.68, pegged with 2021E PBV of 0.5x. The positives for NWR include not only its...

Krungthai XSpring

Ah, Foreign War Movies............................

The listing of Fullerton Healthcare has been delayed by the Monetary Authority of Singapore in response to letters (i.e., hate mail from doctors)...

Kemp Dolliver, CFA

Obamacare Problems Complicate Health Insurer Mergers

Growing troubles with the Affordable Care Act’s state exchanges, including the planned departure from multiple states by UnitedHealth Group and...

CTFN

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