HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Venus Medtech (Hangzhou) / Equity Bottom-Up

<p>In the beginning of 2021, the listing of <a href="https://www.smartkarma.com/entities/microport-cardioflow-medtech-corporation" target="_blank" data-smartkarma-citation="entities:31084:1" rel="noopener">MicroPort CardioFlow Medtech Corporation (1844972D HK) </a>attracted the attention of most investors. The market's expectation for MicroPort CardioFlow is relatively high. On March 19, 2021, the market value of MicroPort CardioFlow was about RMB36 billion, while the market value of <a href="https://www.smartkarma.com/entities/venus-medtech-hangzhou-inc" target="_blank" data-smartkarma-citation="entities:28257:1" rel="noopener">Venus MedTech (2500 HK)</a> was just about RMB27 billion, with the difference of nearly RMB10 billion. In the domestic TAVR market, MicroPort CardioFlow and Venus Medtech, as the two most popular players, obviously have their own unique advantages and core competitiveness. At its current market value, Venus Medtech is well worth watching.</p>

In the beginning of 2021, the listing of MicroPort CardioFlow Medtech Corporation (1844972D HK) attracted the attention of most investors. The market's expectation for MicroPort CardioFlow is relatively high. On March 19, 2021, the market value of MicroPort CardioFlow was about RMB36 billion, while the market value of Venus MedTech (2500 HK) was just about RMB27 billion, with the difference of nearly RMB10 billion. In the domestic TAVR market, MicroPort CardioFlow and Venus Medtech, as the two most popular players, obviously have their own unique advantages and core competitiveness. At its current market value, Venus Medtech is well worth watching.

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

MicroPort CardioFlow / Equity Capital Markets

<p>We think that the proposed valuation for MicroPort CardioFlow's HKEX listing is pricey based on our DCF analysis, but the business has very good momentum resulting from a favorable product cycle and adoption of a new procedure. We would take the deal.</p>

We think that the proposed valuation for MicroPort CardioFlow's HKEX listing is pricey based on our DCF analysis, but the business has very good momentum resulting from a favorable product cycle and adoption of a new procedure. We would take the deal.

MicroPort CardioFlow: What You Have to Assume

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.

<p>MicroPort Cardioflow, a leading transcatheter valve therapeutic medical device company spun off from MicroPort Group, started book building to raise up to USD 324m via a listing in Hong Kong.</p><p>In our previous note, we looked at the company's first-generation TAVR product, VitaFlow. We think it has decent clinical data in terms of efficacy and safety. It was launched two years behind the main competitor, VenusMedtech's VenusA-Valve. Having said that, its sales ramp has been strong since its launch in 2H2019. The company's management team has been working within the MicroPort Group for more than a decade. We believe that the company can leverage the sales network of MicroPort Group. In terms of pre-IPO investors, we note that they are mainly domestic funds but the quality is decent. </p><p>We think the cornerstone line up is not the best for a healthcare listing and there's also a limited upside of 10% at the high end despite a strong rally for its peer set.</p><h2>Our previous coverage on Microport Cardioflow</h2><ul>
<li dir="ltr" aria-level="1"><p><a href="https://www.smartkarma.com/insights/microport-cardioflow-pre-ipo-strong-sales-ramp-up-despite-being-late-in-market" target="_blank" rel="noopener">MicroPort Cardioflow (微创心通) Pre-IPO: Strong sales ramp-up despite being late in market</a></p></li>
<li dir="ltr" aria-level="1"><p><a href="https://www.smartkarma.com/insights/microport-cardioflow-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">MicroPort Cardioflow (微创心通) Pre-IPO: Thoughts on valuation</a></p></li>
</ul>

MicroPort Cardioflow, a leading transcatheter valve therapeutic medical device company spun off from MicroPort Group, started book building to raise up to USD 324m via a listing in Hong Kong.In our previous note, we looked at the company's first-generation TAVR product, VitaFlow. We think it has decent clinical data in terms of efficacy and safety. It was launched two years behind the main competitor, VenusMedtech's VenusA-Valve. Having said that, its sales ramp has been strong since its launch in 2H2019. The company's management team has been working within the MicroPort Group for more than a decade. We believe that the company can leverage the sales network of MicroPort Group. In terms of pre-IPO investors, we note that they are mainly domestic funds but the quality is decent. We think the cornerstone line up is not the best for a healthcare listing and there's also a limited upside of 10% at the high end despite a strong rally for its peer set.Our previous coverage on Microport Cardioflow
MicroPort Cardioflow (微创心通) Pre-IPO: Strong sales ramp-up despite being late in market
MicroPort Cardioflow (微创心通) Pre-IPO: Thoughts on valuation


Cardioflow (微创心通)  IPO: Limited Upside

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.

<div><p><a href="https://www.smartkarma.com/entities/microport-cardioflow-medtech-corporation" target="_blank" data-smartkarma-citation="entities:31084:1" rel="noopener">MicroPort CardioFlow (1844972D HK)</a> is a leading transcatheter heart valve medical device company in China. It started as an incubation project within <a href="https://www.smartkarma.com/entities/microport-scientific-corp" target="_blank" data-smartkarma-citation="entities:4487:1" rel="noopener">Microport Scientific (853 HK)</a>, the controlling shareholder. At the proposed IPO price range of HK$11.10-12.20 per share, MicroPort will have a market cap of HK$26,264.5-28,867.2 ($3.4-3.7 billion). At the mid-point of the IPO price range, the total net proceeds are HK$2,247.5 million ($290 million). </p></div><div><p>Sixteen cornerstone investors will subscribe for $125 million of the offer shares (40.5% of the offer shares at the mid-point of the IPO price range). The five largest cornerstone investors are CPE Fund, Hillhouse Capital, Lake Bleu Capital, GIC and Taikang Life. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/microport-cardioflow-ipo-initiation-to-save-a-life" target="_blank" data-smartkarma-citation="insights:47200" rel="noopener">MicroPort CardioFlow IPO Initiation: To Save a Life</a>, we stated that with a large addressable market opportunity and VitaFlow’s potentially best-in-class clinical data, we believe that MicroPort is another attractive play on the China TAVR (transcatheter aortic heart valve replacement) market. Overall, we think that the IPO price range is reasonable.</p></div></div></div>

MicroPort CardioFlow (1844972D HK) is a leading transcatheter heart valve medical device company in China. It started as an incubation project within Microport Scientific (853 HK), the controlling shareholder. At the proposed IPO price range of HK$11.10-12.20 per share, MicroPort will have a market cap of HK$26,264.5-28,867.2 ($3.4-3.7 billion). At the mid-point of the IPO price range, the total net proceeds are HK$2,247.5 million ($290 million). Sixteen cornerstone investors will subscribe for $125 million of the offer shares (40.5% of the offer shares at the mid-point of the IPO price range). The five largest cornerstone investors are CPE Fund, Hillhouse Capital, Lake Bleu Capital, GIC and Taikang Life. In MicroPort CardioFlow IPO Initiation: To Save a Life, we stated that with a large addressable market opportunity and VitaFlow’s potentially best-in-class clinical data, we believe that MicroPort is another attractive play on the China TAVR (transcatheter aortic heart valve replacement) market. Overall, we think that the IPO price range is reasonable.

MicroPort CardioFlow IPO: Valuation Insights

<p>MicroPort Cardioflow is a transcatheter valve therapeutic medical device company incubated from the MicroPort Group. The company aims to raise up to USD 300m via a Hong Kong listing.</p><p>We looked at the company's first generation TAVR product, VitaFlow (<a href="https://www.smartkarma.com/insights/microport-cardioflow-pre-ipo-strong-sales-ramp-up-despite-being-late-in-market" target="_blank" rel="noopener">link to note</a>). We think it has decent clinical data in terms of efficacy and safety. It was launched two years behind the main competitor, VenusMedtech's VenusA-Valve. Having said that, its sales ramp has been strong since its launch in 2H2019. </p><p>The company's management team has been working within the MicroPort Group for more than a decade. We believe that the company can leverage on the sales network of MicroPort Group. In terms of pre-IPO investors, we note that they are mainly domestic funds but the quality is decent. </p><p>In this note, we will take a close look at the company’s valuation. We are of the view that the company’s fair value should be around USD 3.0 billion.</p>

MicroPort Cardioflow is a transcatheter valve therapeutic medical device company incubated from the MicroPort Group. The company aims to raise up to USD 300m via a Hong Kong listing.We looked at the company's first generation TAVR product, VitaFlow (link to note). We think it has decent clinical data in terms of efficacy and safety. It was launched two years behind the main competitor, VenusMedtech's VenusA-Valve. Having said that, its sales ramp has been strong since its launch in 2H2019. The company's management team has been working within the MicroPort Group for more than a decade. We believe that the company can leverage on the sales network of MicroPort Group. In terms of pre-IPO investors, we note that they are mainly domestic funds but the quality is decent. In this note, we will take a close look at the company’s valuation. We are of the view that the company’s fair value should be around USD 3.0 billion.

MicroPort Cardioflow (微创心通) Pre-IPO: Thoughts on Valuation

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)

Venus MedTech Vs MicroPort CardioFlow

This article analyzed the difference between MicroPort CardioFlow and Venus Medtech in terms of sales performance, product progress, industry...

Xinyao (Criss) Wang

MicroPort CardioFlow: What You Have to Assume

We think that the proposed valuation for MicroPort CardioFlow's HKEX listing is pricey, but the business has very good momentum. We would take the...

Kemp Dolliver, CFA

Cardioflow (微创心通) IPO: Limited Upside

We think the cornerstone line up is not the best for a healthcare listing and there's also a limited upside of 10% at the high end despite a strong...

Ke Yan, CFA, FRM

MicroPort CardioFlow IPO: Valuation Insights

MicroPort aims to raise total net proceeds of $290 million at the mid-point of the IPO price range of HK$11.10-12.20 per share. Overall, we think...

Arun George

MicroPort Cardioflow (微创心通) Pre-IPO: Thoughts on Valuation

We are taking a close look at the Microport Cardioflow’s valuation. We are of the view that the company’s fair value should be around USD 3.0 billion.

Ke Yan, CFA, FRM

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