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

<p><a href="https://www.smartkarma.com/entities/broncus-holding-corporation" target="_blank" data-smartkarma-citation="entities:33315:1" rel="noopener">Broncus (BRC HK)</a> is a medical device company focused on the development of interventional pulmonology products. Broncus has 17 products and major product candidates under various development stages. The core products are <em>InterVapor</em>, the world’s first and only thermal vapour energy ablation system to treat lung diseases and <em>RF-II</em>, which is the only radiofrequency ablation system that specifically targets lung cancer.</p><p>Broncus has a credible management team with a commendable commercialisation track record and blue-chip backers. Pre-IPO investors include Qiming Venture Capital, DiNovA Capital, Lake Bleu Capital, FountainVest and <a href="https://www.smartkarma.com/entities/intuitive-surgical-inc" target="_blank" data-smartkarma-citation="entities:15853:1" rel="noopener">Intuitive Surgical (ISRG US)</a>. Broncus is pre-marketing an HKEx IPO to raise $300 million, according to press reports. </p><p>Broncus currently generates revenue primarily from navigation systems (LungPoint Plus, LungPro, LungPoint and planners) where it ranks second in China with a market share of 37.5% measured by sales revenue for the years ended 2018, 2019 and 2020, according to Frost &amp; Sullivan. However, the market is relatively small as the market size of interventional pulmonology diagnostic consumables in China reached just $26.3 million in 2020, according to Frost &amp; Sullivan. </p><div class="content-highlight"><p>Broncus’s core products aim for a large addressable market by targeting the pulmonary disease treatment market. The core products' differentiation in terms of technology and target indications increases the probability of success. Overall, we believe that Broncus’ product portfolio is attractive. </p></div>

Broncus (BRC HK) is a medical device company focused on the development of interventional pulmonology products. Broncus has 17 products and major product candidates under various development stages. The core products are InterVapor, the world’s first and only thermal vapour energy ablation system to treat lung diseases and RF-II, which is the only radiofrequency ablation system that specifically targets lung cancer.Broncus has a credible management team with a commendable commercialisation track record and blue-chip backers. Pre-IPO investors include Qiming Venture Capital, DiNovA Capital, Lake Bleu Capital, FountainVest and Intuitive Surgical (ISRG US). Broncus is pre-marketing an HKEx IPO to raise $300 million, according to press reports. Broncus currently generates revenue primarily from navigation systems (LungPoint Plus, LungPro, LungPoint and planners) where it ranks second in China with a market share of 37.5% measured by sales revenue for the years ended 2018, 2019 and 2020, according to Frost &amp; Sullivan. However, the market is relatively small as the market size of interventional pulmonology diagnostic consumables in China reached just $26.3 million in 2020, according to Frost &amp; Sullivan. Broncus’s core products aim for a large addressable market by targeting the pulmonary disease treatment market. The core products' differentiation in terms of technology and target indications increases the probability of success. Overall, we believe that Broncus’ product portfolio is attractive. 

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.

Shanghai NewMed Medical / Equity Capital Markets

<p>Shanghai NewMed, a China-based heart valve medical device company, plans to raise up to USD 200m via a Hong Kong listing.</p><p>The company's core TAVR (transcatheter aortic valve replacement) product Prizvalve is a few years behind its competitors, despite its unique balloon expandable design. The selling point for the company is that in the international market such design is better than the self-expandable design which is mainstream in China. On the other hand, the company is leading the TMVR (transcatheter mitral valve replacement) development which is potentially a bigger market than the TAVR. </p><p>The company has quality institutional investors alongside individual investors, as well as an experienced management team. We think investors should follow the IPO.</p>

Shanghai NewMed, a China-based heart valve medical device company, plans to raise up to USD 200m via a Hong Kong listing.The company's core TAVR (transcatheter aortic valve replacement) product Prizvalve is a few years behind its competitors, despite its unique balloon expandable design. The selling point for the company is that in the international market such design is better than the self-expandable design which is mainstream in China. On the other hand, the company is leading the TMVR (transcatheter mitral valve replacement) development which is potentially a bigger market than the TAVR. The company has quality institutional investors alongside individual investors, as well as an experienced management team. We think investors should follow the IPO.

NewMed (纽脉医疗) Pre-IPO: Uphill Battle for TAVR but Leads the TMVR

Jenscare Scientific / Equity Capital Markets

<p>Jenscare, a China based structural heart disease focused medical device company, plans to raise up to USD 300m via a Hong Kong listing.</p><p>There have been many aortic heart valve replacement (TAVR) companies listed in Hong Kong but we think Jenscare has a differentiated portfolio in the area of heart valve replacement. Its TTVR product for the tricuspid valve will be leader the market for a few years and its TAVR product has a different indication for aortic regurgitation vs the aortic stenosis from other TAVR players. </p><p>With quality pre-IPO investors, experienced management team and differentiated portfolio, we think investors should follow the IPO.</p>

Jenscare, a China based structural heart disease focused medical device company, plans to raise up to USD 300m via a Hong Kong listing.There have been many aortic heart valve replacement (TAVR) companies listed in Hong Kong but we think Jenscare has a differentiated portfolio in the area of heart valve replacement. Its TTVR product for the tricuspid valve will be leader the market for a few years and its TAVR product has a different indication for aortic regurgitation vs the aortic stenosis from other TAVR players. With quality pre-IPO investors, experienced management team and differentiated portfolio, we think investors should follow the IPO.

Jenscare (宁波健世科技) Pre-IPO: Differentiated Heart Valve Portfolio

Shanghai HeartCare Medical Technology / Equity Capital Markets

Shanghai HeartCare Medical Technology (6609 HK)

<div><p><a href="https://www.smartkarma.com/entities/shanghai-heartcare-medical-technology-corporation-limited" target="_blank" data-smartkarma-citation="entities:32192:1" rel="noopener">Shanghai HeartCare Medical Technology (6609 HK)</a> is a China-based neuro-interventional medical device manufacturer with a product portfolio that spans the treatment and prevention of ischemic stroke to the treatment of haemorrhagic stroke. HeartCare’s product portfolio consists of a total of 23 commercialised products and product candidates, including four ischemic stroke treatment devices with NMPA approval.</p></div><div><p>HeartCare has launched an HKEx IPO to raise net proceeds of HK$980.6 million ($126 million) at the mid-point of the IPO price range of HK$160.00-171.00 per share. Ten cornerstone investors will subscribe for $66 million worth of the offer shares (46.96% of the offer shares at the mid-point). Pricing will be finalised on 13 August and the shares will list on 20 August.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/shanghai-heartcare-medical-ipo-initiation-surviving-strokes" target="_blank" data-smartkarma-citation="insights:50331" rel="noopener">Shanghai HeartCare Medical IPO Initiation: Surviving Strokes</a>, we opined that HeartCare only started to generate revenue in 1Q20 through the commercialisation of two products (SupSelek and ExtraFlex). Captor thrombectomy device, a core product, was commercialised in December 2020 and Fullblock balloon guiding catheter was commercialised in April 2021. HeartCare aims to commercialise nine currently late-stage product candidates in 2021 and ten currently earlier-stage product candidates between 2022 and 2025. With a strong near-term commercialisation pipeline, HeartCare has shifted from a concept to a revenue-generating stock. We concluded that HeartCare’s product portfolio is attractive.  </p></div><div><div>
<p>HeartCare is braving the moribund IPO market for Chinese stocks by seeking to raise a lower amount than the original target of a $300 million raise. Despite the sell-off on Chinese names, <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>, a peer, is trading 9% above its IPO price (listed 5 July 2021), suggesting that sentiment on the Chinese medical devices sector remains positive.  </p>
<div class="content-highlight"><p>Our base-case DCF valuation is HK$186.51 per share, which is a 13% upside to the mid-point of the IPO price range of HK$160.00-171.00 per share. Consequently, we would participate in the IPO. </p></div>
</div></div>

Shanghai HeartCare Medical Technology (6609 HK) is a China-based neuro-interventional medical device manufacturer with a product portfolio that spans the treatment and prevention of ischemic stroke to the treatment of haemorrhagic stroke. HeartCare’s product portfolio consists of a total of 23 commercialised products and product candidates, including four ischemic stroke treatment devices with NMPA approval.HeartCare has launched an HKEx IPO to raise net proceeds of HK$980.6 million ($126 million) at the mid-point of the IPO price range of HK$160.00-171.00 per share. Ten cornerstone investors will subscribe for $66 million worth of the offer shares (46.96% of the offer shares at the mid-point). Pricing will be finalised on 13 August and the shares will list on 20 August.In Shanghai HeartCare Medical IPO Initiation: Surviving Strokes, we opined that HeartCare only started to generate revenue in 1Q20 through the commercialisation of two products (SupSelek and ExtraFlex). Captor thrombectomy device, a core product, was commercialised in December 2020 and Fullblock balloon guiding catheter was commercialised in April 2021. HeartCare aims to commercialise nine currently late-stage product candidates in 2021 and ten currently earlier-stage product candidates between 2022 and 2025. With a strong near-term commercialisation pipeline, HeartCare has shifted from a concept to a revenue-generating stock. We concluded that HeartCare’s product portfolio is attractive.  
HeartCare is braving the moribund IPO market for Chinese stocks by seeking to raise a lower amount than the original target of a $300 million raise. Despite the sell-off on Chinese names, Zylox-Tonbridge Medical Technology (2190 HK), a peer, is trading 9% above its IPO price (listed 5 July 2021), suggesting that sentiment on the Chinese medical devices sector remains positive.  
Our base-case DCF valuation is HK$186.51 per share, which is a 13% upside to the mid-point of the IPO price range of HK$160.00-171.00 per share. Consequently, we would participate in the IPO. 


Shanghai HeartCare Medical IPO: Valuation Insights

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

LEPU ScienTech Medical Technology / Equity Capital Markets

LEPU ScienTech Medical Technology (2291 HK)

<p>After <a href="https://www.smartkarma.com/entities/lepu-biopharma-co-ltd" target="_blank" data-smartkarma-citation="entities:33231:1" rel="noopener">Lepu Biopharma (LBP HK)</a> submitted its application for listing on HKEX, on June 25, 2021, <a href="https://www.smartkarma.com/entities/lepu-scientech-medical-technology-shanghai-co-ltd" target="_blank" data-smartkarma-citation="entities:33578:1" rel="noopener">Lepu Scientech Medical Technology (Shanghai) (LSM HK)</a> also submitted its prospectus to the HKEX and applied for listing on the main board. It is expected that the spin-off and listing plan of several companies in “Lepu factions” would continue. However, under the frequent capital operation, how is the prospects of Lepu Scientech? This article mainly analyzed the industry characteristics, the business and the outlook of the Company.</p>

After Lepu Biopharma (LBP HK) submitted its application for listing on HKEX, on June 25, 2021, Lepu Scientech Medical Technology (Shanghai) (LSM HK) also submitted its prospectus to the HKEX and applied for listing on the main board. It is expected that the spin-off and listing plan of several companies in “Lepu factions” would continue. However, under the frequent capital operation, how is the prospects of Lepu Scientech? This article mainly analyzed the industry characteristics, the business and the outlook of the Company.

Pre-IPO Lepu Scientech Medical Technology - High Gross Margin Does Not Mean High Moat

China

Venus Medtech is a leading medical device company specializing in transcatheter structural heart valvular therapies. It develops and commercializes innovative solutions for all four heart valves (TAVR, TPVR, TMVR, TTVR) and interventional hypertension treatment. The company was founded in 2009 and is headquartered in Hangzhou, China.

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Venus Medtech (Hangzhou) (2500 HK)

Broncus IPO: Every Breath They Take

Broncus is pre-marketing an HKEx IPO to raise $300m. The core products' differentiation in terms of technology and target indications increases the...

Arun George

NewMed (纽脉医疗) Pre-IPO: Uphill Battle for TAVR but Leads the TMVR

NewMed plans to raise at least USD 200m via a Hong Kong listing. We take a look at its Prizvalve, replacement valve for the aortic valve, and Mi...

Ke Yan, CFA, FRM

Jenscare (宁波健世科技) Pre-IPO: Differentiated Heart Valve Portfolio

Jenscare has a differentiated heart valve portfolio with leadership in the tricuspid heart valve replacement segment. We think the company is...

Ke Yan, CFA, FRM

Shanghai HeartCare Medical IPO: Valuation Insights

Our base-case DCF valuation is HK$186.51 per share, which is a 13% upside to the mid-point of the IPO price range of HK$160.00-171.00 per share.

Arun George

Pre-IPO Lepu Scientech Medical Technology - High Gross Margin Does Not Mean High Moat

This article mainly analyzed Lepu Scientech in terms of industry characteristics, related policies, the business, competition pattern, financial...

Xinyao (Criss) Wang

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