HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Bayzed Health Group / Equity Capital Markets

<ul>
<li>The positioning of Bayzed is just “a supplement to public hospitals system”, with limited scale and competitiveness, which is a point that investors may need to be aware of.</li>
<li>A big problem in the operation of Bayzed is the loss status/weak profitability. At current gross margin level, it would be difficult for Bayzed to deliver good returns for investors.</li>
<li>Valuation of Bayzed should be lower than Inkon Life Technology and Hygeia. The Pre-IPO valuation is not cheap, and the valuation upside potential may be limited considering weak profitability.  </li>
</ul>


The positioning of Bayzed is just “a supplement to public hospitals system”, with limited scale and competitiveness, which is a point that investors may need to be aware of.
A big problem in the operation of Bayzed is the loss status/weak profitability. At current gross margin level, it would be difficult for Bayzed to deliver good returns for investors.
Valuation of Bayzed should be lower than Inkon Life Technology and Hygeia. The Pre-IPO valuation is not cheap, and the valuation upside potential may be limited considering weak profitability.  


Pre-IPO Bayzed Health Group (PHIP Updates) - Some Points Worth the Attention

<ul>
<li>The expansion space of BenQ is severely limited as the market has been saturated in Jiangsu Province. Due to DRG, future revenue/net profit growth would continue to be under pressure. </li>
<li>Low profit margin of general hospitals is a common problem in this industry due to pain points of business model.It’s difficult to achieve improvement.Investors need to be aware of this.</li>
<li>BenQ’s valuation should be lower than Hygeia due to weaker profitability, smaller revenue scale, lower growth outlook.Post-money valuation before IPO of US$375 million (or about RMB2.7 billion) is already expensive</li>
</ul>


The expansion space of BenQ is severely limited as the market has been saturated in Jiangsu Province. Due to DRG, future revenue/net profit growth would continue to be under pressure. 
Low profit margin of general hospitals is a common problem in this industry due to pain points of business model.It’s difficult to achieve improvement.Investors need to be aware of this.
BenQ’s valuation should be lower than Hygeia due to weaker profitability, smaller revenue scale, lower growth outlook.Post-money valuation before IPO of US$375 million (or about RMB2.7 billion) is already expensive


Pre-IPO BenQ BM Holding (PHIP Updates) - Some Points Worth the Attention

<ul>
<li>Since HUGE ranks in the first tier among domestic brands, the import substitution would be the main logic to continue driving the performance growth based on its strong cost effectiveness.</li>
<li>If HUGE wants to achieve success in non-advantageous areas in the future, reducing price to compete for more market share could be an essential means. VBP is also a challenge.</li>
<li>Comparable companies include <a href="https://www.smartkarma.com/entities/shandong-sinocera-functional-material-a" target="_blank" data-smartkarma-citation="entities:6865:1" rel="noopener">Sinocera Functional Material</a>, <a href="https://www.smartkarma.com/entities/yantai-zhenghai-bio-tech-co-ltd" target="_blank" data-smartkarma-citation="entities:29760:1" rel="noopener">Yantai Zhenghai Bio-Tech</a>, Angelalign, <a href="https://www.smartkarma.com/entities/modern-dental-group-ltd" target="_blank" data-smartkarma-citation="entities:21020:1" rel="noopener">Modern Dental Group</a>, <a href="https://www.smartkarma.com/entities/topchoice-medical-corporation" target="_blank" data-smartkarma-citation="entities:1102:1" rel="noopener">Topchoice Medical</a>. We think valuation of HUGE could be higher than peers due to higher profitability.</li>
</ul>


Since HUGE ranks in the first tier among domestic brands, the import substitution would be the main logic to continue driving the performance growth based on its strong cost effectiveness.
If HUGE wants to achieve success in non-advantageous areas in the future, reducing price to compete for more market share could be an essential means. VBP is also a challenge.
Comparable companies include Sinocera Functional Material, Yantai Zhenghai Bio-Tech, Angelalign, Modern Dental Group, Topchoice Medical. We think valuation of HUGE could be higher than peers due to higher profitability.


Pre-IPO Huge Dental Limited - The Business and the Concerns Behind

Dazhong Dental Medical / Equity Capital Markets

<ul>
<li>In other to attract and retain high-quality dentists, dental services providers need to pay higher salaries than public hospitals, which inevitably drives up manpower costs and drag down profit margin.</li>
<li>Regulatory pricing controls and centralized procurement policies on dental implants and orthodontic materials will affect the pricing of Dazhong’s dental services, thus put pressure on its future revenue growth.</li>
<li>The future valuation performance largely depends on if Dazhong is able to expand out of Central China and achieve nationwide coverage. However, so far, no successful cases have emerged.</li>
</ul>


In other to attract and retain high-quality dentists, dental services providers need to pay higher salaries than public hospitals, which inevitably drives up manpower costs and drag down profit margin.
Regulatory pricing controls and centralized procurement policies on dental implants and orthodontic materials will affect the pricing of Dazhong’s dental services, thus put pressure on its future revenue growth.
The future valuation performance largely depends on if Dazhong is able to expand out of Central China and achieve nationwide coverage. However, so far, no successful cases have emerged.


Pre-IPO Wuhan Dazhong Dental Medical - Valuation Performance May Disappoint Investors

Distinct Healthcare Holdings / Equity Capital Markets

<ul>
<li>Due to industry characteristics, it would be difficult for Distinct Healthcare to scale up. The Company is more of “a supplementary role” in the entire medical service system in China.</li>
<li>Profit margin is not satisfactory and cost side is also difficult to reduce. Even if Distinct Healthcare successfully turns losses into profits, it’s hard to generate good returns for investors.</li>
<li>Post-Money valuation was US$510 million after Series E financing. For a company that would encounter bottlenecks in both revenue and profit growth, it would be difficult to achieve high valuation.</li>
</ul>


Due to industry characteristics, it would be difficult for Distinct Healthcare to scale up. The Company is more of “a supplementary role” in the entire medical service system in China.
Profit margin is not satisfactory and cost side is also difficult to reduce. Even if Distinct Healthcare successfully turns losses into profits, it’s hard to generate good returns for investors.
Post-Money valuation was US$510 million after Series E financing. For a company that would encounter bottlenecks in both revenue and profit growth, it would be difficult to achieve high valuation.


Pre-IPO Distinct Healthcare Holdings-  Hard to Deliver the Expected Returns Due to Growth Bottleneck

China

Topchoice Medical Investment Corporation provides dental and oral health care services.

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52-week Range	0.00 - 0.00
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Topchoice Medical (600763 CH)

Pre-IPO Bayzed Health Group (PHIP Updates) - Some Points Worth the Attention

The positioning of Bayzed is just “a supplement to public hospital system”, with limited competitiveness.Due to weak profitability, it's hard to...

Xinyao (Criss) Wang

Pre-IPO BenQ BM Holding (PHIP Updates) - Some Points Worth the Attention

BenQ faces limited growth in Jiangsu Province due to market saturation. Low profit margin/ pain points of business model pose challenges.Valuation...

Xinyao (Criss) Wang

Pre-IPO Huge Dental Limited - The Business and the Concerns Behind

Import substitution and cost effectiveness drive HUGE's performance growth, but competing in non-advantageous areas may require price reduction...

Xinyao (Criss) Wang

Pre-IPO Wuhan Dazhong Dental Medical - Valuation Performance May Disappoint Investors

To attract top dentists, dental service providers have to pay higher salaries, impacting profit margins. VBP will affect revenue growth for...

Xinyao (Criss) Wang

Pre-IPO Distinct Healthcare Holdings- Hard to Deliver the Expected Returns Due to Growth Bottleneck

Distinct Healthcare faces challenges in scaling up due to industry characteristics and may not generate good returns for investors despite turning...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Pre-IPO Bayzed Health Group (PHIP Updates) - Some Points Worth the Attention

The positioning of Bayzed is just “a supplement to public hospital system”, with limited competitiveness.Due to weak profitability, it's hard to...

Xinyao (Criss) Wang

Pre-IPO BenQ BM Holding (PHIP Updates) - Some Points Worth the Attention

​BenQ faces limited growth in Jiangsu Province due to market saturation. Low profit margin/ pain points of business model pose challenges.Valuation...

Xinyao (Criss) Wang

Pre-IPO Huge Dental Limited - The Business and the Concerns Behind

​Import substitution and cost effectiveness drive HUGE's performance growth, but competing in non-advantageous areas may require price reduction...

Xinyao (Criss) Wang

Pre-IPO Wuhan Dazhong Dental Medical - Valuation Performance May Disappoint Investors

​To attract top dentists, dental service providers have to pay higher salaries, impacting profit margins. VBP will affect revenue growth for...

Xinyao (Criss) Wang

Pre-IPO Distinct Healthcare Holdings- Hard to Deliver the Expected Returns Due to Growth Bottleneck

​Distinct Healthcare faces challenges in scaling up due to industry characteristics and may not generate good returns for investors despite turning...

Xinyao (Criss) Wang

BenQ faces limited growth in Jiangsu Province due to market saturation. Low profit margin/ pain points of business model pose challenges.Valuation...

Import substitution and cost effectiveness drive HUGE's performance growth, but competing in non-advantageous areas may require price reduction...

To attract top dentists, dental service providers have to pay higher salaries, impacting profit margins. VBP will affect revenue growth for...

Distinct Healthcare faces challenges in scaling up due to industry characteristics and may not generate good returns for investors despite turning...