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.

Equity Capital Markets

Broncus raised HKD 1,552 million (USD 199m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, September 23rd.
In our previous note, we discussed that the company's core product, InterVapor, is a minimally invasive surgery that uses heated water vapor to treat the chronic obstructive pulmonary disease (COPD). In addition to the COPD indication, the company plans to further develop the product for the treatment of lung cancer. Another core product, RF-II uses radio frequency to treat lung cancer. Besides InterVapor and RF-II, the company also has a commercialized lung navigation system which has a leading market share in China. However, we believe the market for the lung navigation system is still in the early stage of development in China and hence the small market size.  We think the company has a strong pre-IPO investor line-up with backing from the founder of VenusMedtech and its management team is experienced. We also provided our thoughts on valuation of Broncus.
In this note, we look at the updates since our last note. We re-iterate our view that the company is fairly valued at the top end and will stay away from the company.

Broncus raised HKD 1,552 million (USD 199m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, September 23rd.
In our previous note, we discussed that the company's core product, InterVapor, is a minimally invasive surgery that uses heated water vapor to treat the chronic obstructive pulmonary disease (COPD). In addition to the COPD indication, the company plans to further develop the product for the treatment of lung cancer. Another core product, RF-II uses radio frequency to treat lung cancer. Besides InterVapor and RF-II, the company also has a commercialized lung navigation system which has a leading market share in China. However, we believe the market for the lung navigation system is still in the early stage of development in China and hence the small market size.  We think the company has a strong pre-IPO investor line-up with backing from the founder of VenusMedtech and its management team is experienced. We also provided our thoughts on valuation of Broncus.
In this note, we look at the updates since our last note. We re-iterate our view that the company is fairly valued at the top end and will stay away from the company.

Broncus (堃博医疗) IPO Trading: Chilled for a Reason but Mind the Share Concentration

Broncus Holding is a leading interventional pulmonology company in China and globally. The company launched book building to raise up to USD 215m via a Hong Kong listing.In our previous note, we discussed that the company's core product, InterVapor, is a minimally invasive surgery that uses heated water vapor to treat the chronic obstructive pulmonary disease (COPD). In addition to the COPD indication, the company plans to further develop the product for the treatment of lung cancer. Another core product, RF-II uses radio frequency to treat lung cancer. Besides InterVapor and RF-II, the company also has a commercialized lung navigation system which has a leading market share in China. However, we believe the market for the lung navigation system is still in the early stage of development in China and hence the small market size.  We think the company has a strong pre-IPO investor line-up with backing from the founder of VenusMedtech and its management team is experienced. We also provided our thoughts on valuation of Broncus.In this note, we provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.

Broncus Holding is a leading interventional pulmonology company in China and globally. The company launched book building to raise up to USD 215m via a Hong Kong listing.In our previous note, we discussed that the company's core product, InterVapor, is a minimally invasive surgery that uses heated water vapor to treat the chronic obstructive pulmonary disease (COPD). In addition to the COPD indication, the company plans to further develop the product for the treatment of lung cancer. Another core product, RF-II uses radio frequency to treat lung cancer. Besides InterVapor and RF-II, the company also has a commercialized lung navigation system which has a leading market share in China. However, we believe the market for the lung navigation system is still in the early stage of development in China and hence the small market size.  We think the company has a strong pre-IPO investor line-up with backing from the founder of VenusMedtech and its management team is experienced. We also provided our thoughts on valuation of Broncus.In this note, we provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.

Broncus (堃博医疗) IPO: Long Term Faith Needed

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/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 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 <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. 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. <div class="content-highlight">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. </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. 

Shanghai NewMed Medical / Equity Capital Markets

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.

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

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, 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

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 (堃博医疗) IPO: Long Term Faith Needed

We provide an update for the book building of Broncus. The company has an interesting product portfolio but the sales ramp-up will be slow.

Ke Yan, CFA, FRM

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

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52-week Range

Market Cap (USDm)

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Dividend (Yield)

Broncus (堃博医疗) IPO Trading: Chilled for a Reason but Mind the Share Concentration

We look at the updates since our last note for Broncus IPO. We re-iterate our view that the company is fairly valued at the top end and will stay...

Ke Yan, CFA, FRM

Broncus (堃博医疗) IPO: Long Term Faith Needed

We provide an update for the book building of Broncus. The company has an interesting product portfolio but the sales ramp-up will be slow.

Ke Yan, CFA, FRM

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