HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Intco Medical Technology  Lt / Equity Capital Markets

On January 29th, 2021, the A-share listed company <a href="https://www.smartkarma.com/entities/intco-medical-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:29782:1" rel="noopener">Intco Medical Technology Co., Ltd-A (300677 CH)</a> submitted its prospectus to the HKEX, officially starting the process of IPO in Hong Kong. Meanwhile, the Company released the financial results in 2020. Intco achieved revenue of RMB13.8 billion in 2020, up 564.29% YoY. Net income attributed to shareholders in 2020 was RMB7 billion, up 3829.22% YoY. The results were in line with expectations.

On January 29th, 2021, the A-share listed company Intco Medical Technology Co., Ltd-A (300677 CH) submitted its prospectus to the HKEX, officially starting the process of IPO in Hong Kong. Meanwhile, the Company released the financial results in 2020. Intco achieved revenue of RMB13.8 billion in 2020, up 564.29% YoY. Net income attributed to shareholders in 2020 was RMB7 billion, up 3829.22% YoY. The results were in line with expectations.

Pre-IPO Intco Medical Technology - Economies of Scale or Overcapacity?

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.

<a href="https://www.smartkarma.com/entities/intco-medical-technology-co-ltd-a" target="_blank" data-smartkarma-citation="entities:29782:1" rel="noopener">Intco Medical Technology Co., Ltd-A (300677 CH)</a> is the largest disposable gloves provider in China and the third-largest in the world as measured by production capacity as of 31 December 2020, according to Frost &amp; Sullivan. Intco which listed its A Share on the Shenzhen Stock Exchange on 21 July 2017, is seeking an H Share listing to raise $1 billion, according to press reports. <div class="content-highlight">Intco along with its global peers have benefited tremendously from the demand-supply imbalance for gloves due to the COVID-19 pandemic. Most peer share prices have declined since the start of the year in expectation of peak quarterly earnings in the second or third quarter of 2021. The glove industry has gone through two previous cycles but has re-rated at each cycle – sector average P/E of 11x in 2007-11 and P/E of 18x in 2013-17. As the industry continues to be underpinned by structural growth drivers, the sector will likely re-rate as sector earnings normalise. Overall, we think that Intco has attractive fundamentals to benefit from these market dynamics. </div>

Intco Medical Technology Co., Ltd-A (300677 CH) is the largest disposable gloves provider in China and the third-largest in the world as measured by production capacity as of 31 December 2020, according to Frost &amp; Sullivan. Intco which listed its A Share on the Shenzhen Stock Exchange on 21 July 2017, is seeking an H Share listing to raise $1 billion, according to press reports. Intco along with its global peers have benefited tremendously from the demand-supply imbalance for gloves due to the COVID-19 pandemic. Most peer share prices have declined since the start of the year in expectation of peak quarterly earnings in the second or third quarter of 2021. The glove industry has gone through two previous cycles but has re-rated at each cycle – sector average P/E of 11x in 2007-11 and P/E of 18x in 2013-17. As the industry continues to be underpinned by structural growth drivers, the sector will likely re-rate as sector earnings normalise. Overall, we think that Intco has attractive fundamentals to benefit from these market dynamics. 

Intco Medical IPO Initiation: Riding the Cycle

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:<a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a>, <a href="https://www.smartkarma.com/entities/top-glove-corp-bhd" target="_blank" data-smartkarma-citation="entities:20759:1" rel="noopener">Top Glove Corp (TOPG MK)</a>, <a href="https://www.smartkarma.com/entities/naver-corp" target="_blank" data-smartkarma-citation="entities:16029:1" rel="noopener">Naver Corp (035420 KS)</a>, <a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a>, <a href="https://www.smartkarma.com/entities/hon-hai-precision-industry-co-ltd" target="_blank" data-smartkarma-citation="entities:745:1" rel="noopener">Hon Hai Precision Industry (2317 TT)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/tata-consultancy-svcs-ltd" target="_blank" data-smartkarma-citation="entities:18708:1" rel="noopener">Tata Consultancy Svcs (TCS IN)</a>, <a href="https://www.smartkarma.com/entities/infosys-ltd" target="_blank" data-smartkarma-citation="entities:267:1" rel="noopener">Infosys Ltd (INFO IN)</a>, <a href="https://www.smartkarma.com/entities/hcl-technologies-ltd" target="_blank" data-smartkarma-citation="entities:20025:1" rel="noopener">Hcl Technologies (HCLT IN)</a>, <a href="https://www.smartkarma.com/entities/wipro-ltd" target="_blank" data-smartkarma-citation="entities:15360:1" rel="noopener">Wipro Ltd (WPRO IN)</a>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:Hyundai Motor Co (005380 KS), Top Glove Corp (TOPG MK), Naver Corp (035420 KS), Coupang (CPNG US), Hon Hai Precision Industry (2317 TT), TSMC (2330 TT), Tata Consultancy Svcs (TCS IN), Infosys Ltd (INFO IN), Hcl Technologies (HCLT IN), Wipro Ltd (WPRO IN)

Global Emerging Markets Weekly: 2 April 2021

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

The US Customs and Border Protection Agency (CBP) ordered its ports to begin seizing all disposable gloves produced in Malaysia by <a href="https://www.smartkarma.com/entities/top-glove-corp-bhd" target="_blank" data-smartkarma-citation="entities:20759:1" rel="noopener">Top Glove Corp (TOPG MK)</a>, citing that CBP has found sufficient evidence to determine that the imported goods were produced using forced labour practices. Top Glove shares sank 5.3% yesterday and another 5.4% today to close at MYR 4.52 per share.Even though the immediate financial impact from the above order is some what limited, we believe the order to have a significant impact on Top Glove’s financial performance in the post COVID era. Moreover, it could affect the company’s proposed Hong Kong Offering and also risk getting thrown out of ESG indices.

The US Customs and Border Protection Agency (CBP) ordered its ports to begin seizing all disposable gloves produced in Malaysia by Top Glove Corp (TOPG MK), citing that CBP has found sufficient evidence to determine that the imported goods were produced using forced labour practices. Top Glove shares sank 5.3% yesterday and another 5.4% today to close at MYR 4.52 per share.Even though the immediate financial impact from the above order is some what limited, we believe the order to have a significant impact on Top Glove’s financial performance in the post COVID era. Moreover, it could affect the company’s proposed Hong Kong Offering and also risk getting thrown out of ESG indices.

CBP to Seize Goods Over Forced Labour: The Impact Limited in The Short Run & Severe in The Long Run

Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

Trade data for February 2021 (due next week), the first for the Biden era, will be scrutinized for bilateral deficits. In 2020, the US' bilateral deficits with only 3 of its top-10 trade partners declined -- Canada, Japan and Germany -- suggesting that Trump tariffs on steel and aluminium had worked partially. The US deficit with China declined sharply in 2019 and in Jan-Oct 2020, but mysteriously widened in the next 3 months. The US suspects that big deficits with Vietnam, Taiwan, South Korea and Malaysia reflect transshipment of mainland-China products via those countries, and they are consequently already coming under some pressure. The trade war may not heat up further under Biden, but it will not cool down anytime soon. The US had a trade deficit of US$916 billion in 2020, 6% larger than in 2019, with exports down 14.1% YoY and imports down 6.6% YoY. But with net tourist and student inflows to the US down sharply, the current account deficit widened by as much as 35% to US$647 billion or 3.1% of GDP in 2020 (the largest in a decade, but much lower than the 2006 peak of 6% of GDP). US bilateral trade deficits with Canada, Japan and Germany (which are among top-5 trade partners) declined in 2020, suggesting that the impact of the steel and aluminium tariffs imposed early in the Trump term were beginning to finally pay off at least partly. Importantly, for the second consecutive year, the bilateral trade deficit with China declined (by a modest 3.6% YoY) to US$311 billion, the lowest since 2011. That bilateral deficit had widened in 2017 and 2018 (while Trump was only threatening but not actually imposing any tariffs). The imposition of tariffs on China's imports in 2019 (extended in 2020 to nearly half of goods imports from China) did contribute to reducing the US bilateral trade deficit with China. However, US imports from China increased 23.8% YoY in November-December 2020 (immediately after the US election), having declined in 9 of the first 10 months of 2020, and rose 17.5% YoY in Jan 2021.  The beneficiaries of export diversion from China were Vietnam, Switzerland, Taiwan, South Korea and Malaysia, who saw US imports from them rise significantly in 2020 -- thereby also widening the US' bilateral trade deficits with them in 2020. The US believes that at least some of these countries' widening trade surpluses with the US reflect Chinese exports being transshipped to the US via those countries. So the Biden administration is likely to pay increased attention not only to the bilateral trade deficit with China (which has mysteriously risen sharply again since the election), but also bilateral deficits with Vietnam, Taiwan, Malaysia, South Korea, etc., which may reflect the impact of transshipment of mainland-Chinese products into the US.

Trade data for February 2021 (due next week), the first for the Biden era, will be scrutinized for bilateral deficits. In 2020, the US' bilateral deficits with only 3 of its top-10 trade partners declined -- Canada, Japan and Germany -- suggesting that Trump tariffs on steel and aluminium had worked partially. The US deficit with China declined sharply in 2019 and in Jan-Oct 2020, but mysteriously widened in the next 3 months. The US suspects that big deficits with Vietnam, Taiwan, South Korea and Malaysia reflect transshipment of mainland-China products via those countries, and they are consequently already coming under some pressure. The trade war may not heat up further under Biden, but it will not cool down anytime soon. The US had a trade deficit of US$916 billion in 2020, 6% larger than in 2019, with exports down 14.1% YoY and imports down 6.6% YoY. But with net tourist and student inflows to the US down sharply, the current account deficit widened by as much as 35% to US$647 billion or 3.1% of GDP in 2020 (the largest in a decade, but much lower than the 2006 peak of 6% of GDP). US bilateral trade deficits with Canada, Japan and Germany (which are among top-5 trade partners) declined in 2020, suggesting that the impact of the steel and aluminium tariffs imposed early in the Trump term were beginning to finally pay off at least partly. Importantly, for the second consecutive year, the bilateral trade deficit with China declined (by a modest 3.6% YoY) to US$311 billion, the lowest since 2011. That bilateral deficit had widened in 2017 and 2018 (while Trump was only threatening but not actually imposing any tariffs). The imposition of tariffs on China's imports in 2019 (extended in 2020 to nearly half of goods imports from China) did contribute to reducing the US bilateral trade deficit with China. However, US imports from China increased 23.8% YoY in November-December 2020 (immediately after the US election), having declined in 9 of the first 10 months of 2020, and rose 17.5% YoY in Jan 2021.  The beneficiaries of export diversion from China were Vietnam, Switzerland, Taiwan, South Korea and Malaysia, who saw US imports from them rise significantly in 2020 -- thereby also widening the US' bilateral trade deficits with them in 2020. The US believes that at least some of these countries' widening trade surpluses with the US reflect Chinese exports being transshipped to the US via those countries. So the Biden administration is likely to pay increased attention not only to the bilateral trade deficit with China (which has mysteriously risen sharply again since the election), but also bilateral deficits with Vietnam, Taiwan, Malaysia, South Korea, etc., which may reflect the impact of transshipment of mainland-Chinese products into the US. 

US: Trump's Record Card on Trade Mixed; China Trade Already Challenging Biden

Malaysia

Top Glove Corporation Bhd manufactures a wide range of latex gloves.  The Company's products include latex examination powdered, latex examination powderfree, nitrile examination gloves,soft nitrile examination gloves, vinyl examination gloves, surgical gloves, and other related products.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Top Glove Corp (TOPG MK)

Pre-IPO Intco Medical Technology - Economies of Scale or Overcapacity?

The article analyzed Intco Medical in terms of market potential, business (entry barrier, technology, capacity), financial position compared with...

Xinyao (Criss) Wang

Intco Medical IPO Initiation: Riding the Cycle

Intco is seeking an H Share listing to raise $1 billion, according to press reports. Overall, we think that Intco has attractive fundamentals to...

Arun George

Global Emerging Markets Weekly: 2 April 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

CBP to Seize Goods Over Forced Labour: The Impact Limited in The Short Run & Severe in The Long Run

The immediate financial impact from the CBP order is limited. Yet we believe it to have a significant impact on Top Glove’s financial performance...

Oshadhi Kumarasiri

US: Trump's Record Card on Trade Mixed; China Trade Already Challenging Biden

The US bilateral trade deficit with China declined in 2019 & Jan-Oct 20, but rose in the 3 post-election months. Focus is turning to transshipment...

Prasenjit K. Basu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)