Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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 Capital Markets

MicroTech Medical (Hangzhou) / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/microtech-medical-hangzhou-co-ltd" target="_blank" data-smartkarma-citation="entities:33367:1" rel="noopener">MicroTech Medical Hangzhou (2235 HK)</a> provides diabetes treatment and diabetes monitoring medical devices in China and globally. MicroTech’s core product, a semi-disposable patch insulin pump (known as Equil) is the only patch insulin pump available in China whereas the competitor products are tube insulin pumps. The company also has a CGMS product (Continuous Glucose Monitoring System), AiDEX G7 which is the second commercialised calibration-free real-time CGMS in the world. AiDEX G7 has received the CE Marking in the EU in September 2020 and the product has been certified by the NMPA to be eligible for Special Approval Procedures of Innovative Medical Devices promulgated by the NMPA.</p><p>MicroTech has priced its IPO at HK$30.50 per share, slightly below the upper end of the indicative IPO price range of HK$27.70-31.15 per share. At the offer price of HK$30.50 per share, the company raised net proceeds of HK$1,815.1m at a market capitalisation of HK$12.9bn and a post-money enterprise value of HK$10.5bn. According to the company, its Hong Kong offering was oversubscribed by about 6.79x while the international offering was oversubscribed by about 4.9x.</p><p>In our previous two insights on the company’s IPO, we discussed the company’s core products and product portfolio, market potential for its products and the company’s valuation.</p>

MicroTech Medical Hangzhou (2235 HK) provides diabetes treatment and diabetes monitoring medical devices in China and globally. MicroTech’s core product, a semi-disposable patch insulin pump (known as Equil) is the only patch insulin pump available in China whereas the competitor products are tube insulin pumps. The company also has a CGMS product (Continuous Glucose Monitoring System), AiDEX G7 which is the second commercialised calibration-free real-time CGMS in the world. AiDEX G7 has received the CE Marking in the EU in September 2020 and the product has been certified by the NMPA to be eligible for Special Approval Procedures of Innovative Medical Devices promulgated by the NMPA.MicroTech has priced its IPO at HK$30.50 per share, slightly below the upper end of the indicative IPO price range of HK$27.70-31.15 per share. At the offer price of HK$30.50 per share, the company raised net proceeds of HK$1,815.1m at a market capitalisation of HK$12.9bn and a post-money enterprise value of HK$10.5bn. According to the company, its Hong Kong offering was oversubscribed by about 6.79x while the international offering was oversubscribed by about 4.9x.In our previous two insights on the company’s IPO, we discussed the company’s core products and product portfolio, market potential for its products and the company’s valuation.

MicroTech Medical IPO: Thoughts on First Day Trading

<p><a href="https://www.smartkarma.com/entities/broncus-holding-corporation" target="_blank" data-smartkarma-citation="entities:33315:1" rel="noopener">Broncus (2216 HK)</a> is a medical device company focused on the development of interventional pulmonology products. The company offers five interventional therapeutic products and product candidates for lung diseases (including its core products InterVapor and RF-II) and offers six interventional diagnostic medical consumable products including LungPoint. The company was ranked first in China’s interventional pulmonology navigation device market with a market share of 43.2% based on sales volume and ranked second with a market share of 37.5% measured by sales revenue from 2018-2020.</p><p>The company has priced its IPO at HK$18.70 per share, at the upper end of the IPO price range of HK$17.2-18.7 per share. At the above price, Broncus raised net proceeds of HK$1,552.4m at a market capitalisation of HK$9.9bn and a post-money enterprise value of HK$8.0bn. According to the company, its Hong Kong offering was oversubscribed by about 11.1x while the international offering was oversubscribed by about 4.1x.</p><p>In our previous two insights on the company’s IPO, we discussed the company’s core products and product portfolio, market potential for its products and the company’s valuation.</p>

Broncus (2216 HK) is a medical device company focused on the development of interventional pulmonology products. The company offers five interventional therapeutic products and product candidates for lung diseases (including its core products InterVapor and RF-II) and offers six interventional diagnostic medical consumable products including LungPoint. The company was ranked first in China’s interventional pulmonology navigation device market with a market share of 43.2% based on sales volume and ranked second with a market share of 37.5% measured by sales revenue from 2018-2020.The company has priced its IPO at HK$18.70 per share, at the upper end of the IPO price range of HK$17.2-18.7 per share. At the above price, Broncus raised net proceeds of HK$1,552.4m at a market capitalisation of HK$9.9bn and a post-money enterprise value of HK$8.0bn. According to the company, its Hong Kong offering was oversubscribed by about 11.1x while the international offering was oversubscribed by about 4.1x.In our previous two insights on the company’s IPO, we discussed the company’s core products and product portfolio, market potential for its products and the company’s valuation.

Broncus IPO: Thoughts on First Day Trading

Shanghai HeartCare Medical Technology / Equity Capital Markets

Shanghai HeartCare Medical Technology (6609 HK)

<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 neuro-interventional medical device company in China. The company’s product portfolio includes two core products Captor and LAA Occluder of which Captor received the NMPA approval in August 2020 and the company started commercialising the product in December 2020. On the other hand, LAA Occluder is an ischemic stroke prevention device, and the company expects to receive NMPA approval in 4Q2021 whereby they can commence sales in 2Q2022. The company’s LAA Occluder indicates better efficacy and safety compared to other products in the market.</p><p>The company has priced its IPO at HK$171 per share, at the upper end of the IPO price range of HK$160-171 per share. At the above price, Medlive raised net proceeds of HK$1,014.8m (US$131.9m) at a market capitalisation of HK$5.40bn and a post-money enterprise value of HK$3.96bn.</p><p>In our previous insight, we discussed our forecasts and valuation and our DCF based valuation offered price per share of HK$182.78 per share, which is 6.9% higher than the company’s final IPO price of HK$171 per share.</p>

Shanghai HeartCare Medical Technology (6609 HK) is a neuro-interventional medical device company in China. The company’s product portfolio includes two core products Captor and LAA Occluder of which Captor received the NMPA approval in August 2020 and the company started commercialising the product in December 2020. On the other hand, LAA Occluder is an ischemic stroke prevention device, and the company expects to receive NMPA approval in 4Q2021 whereby they can commence sales in 2Q2022. The company’s LAA Occluder indicates better efficacy and safety compared to other products in the market.The company has priced its IPO at HK$171 per share, at the upper end of the IPO price range of HK$160-171 per share. At the above price, Medlive raised net proceeds of HK$1,014.8m (US$131.9m) at a market capitalisation of HK$5.40bn and a post-money enterprise value of HK$3.96bn.In our previous insight, we discussed our forecasts and valuation and our DCF based valuation offered price per share of HK$182.78 per share, which is 6.9% higher than the company’s final IPO price of HK$171 per share.

Shanghai Heartcare IPO: Thoughts on First Day Trading

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>Shanghai HeartCare raised HKD 1,014 million (USD 131m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, August 20th.</p>
<p>In our previous note, we looked at the company's two core products Captor and LAA Occluder. We think the Captor, a stent retrieving thrombectomy device, is the main selling point of the deal given its decent efficacy and safety data and it has already been approved by the NMPA. Market structure for Captor is characterized by the early stage of growth and dominance by MNC players and the company's product is the first approved domestic product with commendable data from head-to-head clinical trials. The company's management are mainly ex-employee from Microport Scientific, a leading international medical device player in China.</p>
<p>In this note, we look at the updates since our last note. The demand for the deal is strong from the retail side but weak on the institution side. We think the institutional investors are risk off for the deal given the overhang of legal proceedings and the weak sentiment on medical devices and hence the debut performance is likely under pressure. Otherwise we remain positive on the company from a valuation perspective.</p>

Shanghai HeartCare raised HKD 1,014 million (USD 131m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, August 20th.
In our previous note, we looked at the company's two core products Captor and LAA Occluder. We think the Captor, a stent retrieving thrombectomy device, is the main selling point of the deal given its decent efficacy and safety data and it has already been approved by the NMPA. Market structure for Captor is characterized by the early stage of growth and dominance by MNC players and the company's product is the first approved domestic product with commendable data from head-to-head clinical trials. The company's management are mainly ex-employee from Microport Scientific, a leading international medical device player in China.
In this note, we look at the updates since our last note. The demand for the deal is strong from the retail side but weak on the institution side. We think the institutional investors are risk off for the deal given the overhang of legal proceedings and the weak sentiment on medical devices and hence the debut performance is likely under pressure. Otherwise we remain positive on the company from a valuation perspective.

Heartcare (心玮医疗) IPO Trading: Risk-Off for Institutional Investors

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.

Acotec Scientific / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/acotec-scientific-holdings-limited" target="_blank" data-smartkarma-citation="entities:32176:1" rel="noopener">Acotec Scientific Holdings (6669 HK)</a> is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are <em>AcorArt Orchid &amp; Dhalia</em> and <em>AcorArt Tulip &amp; Litos</em>. </p></div><div><p>Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares. Pricing will be finalised on 17 August and the shares will list on 24 August.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/acotec-scientific-ipo-living-right" target="_blank" data-smartkarma-citation="insights:56006" rel="noopener">Acotec Scientific IPO: Living Right</a>, we opined that Acotec has an established commercialisation track record with <em>AcorArt Orchid &amp; Dhalia</em> launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. We concluded that Acotec’s product portfolio is attractive.  </p></div><div><div><div class="content-highlight"><p>Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range of HK$22.20-23.80 per share. Consequently, we think the shares are fully priced at the IPO price range. In combination with the lack of blue-chip cornerstone investors, we would wait on the sidelines for a lower entry point. </p></div></div></div>

Acotec Scientific Holdings (6669 HK) is a leading innovative medical device company in China focusing on providing treatment solutions for vascular diseases, particularly in the fields of drug-coated balloons (DCB) and thrombus aspiration catheters. The two core products are AcorArt Orchid &amp; Dhalia and AcorArt Tulip &amp; Litos. Acotec has launched an HKEx IPO to raise net proceeds of HK$1,473.6 million ($189 million) at the mid-point of the IPO price range of HK$22.20-23.80 per share. Thirteen Chinese cornerstone investors will subscribe for $105 million worth of the offer shares. Pricing will be finalised on 17 August and the shares will list on 24 August.In Acotec Scientific IPO: Living Right, we opined that Acotec has an established commercialisation track record with AcorArt Orchid &amp; Dhalia launched in China in 2016. The growth story is supported by ongoing market growth, the recent commercial launch of its second core product, indication expansion for the core products and ambition to commercialise all of the product candidates in the pipeline before the end of 2025. We concluded that Acotec’s product portfolio is attractive.  Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range of HK$22.20-23.80 per share. Consequently, we think the shares are fully priced at the IPO price range. In combination with the lack of blue-chip cornerstone investors, we would wait on the sidelines for a lower entry point. 

Acotec Scientific IPO: Valuation Insights

China

Zylox-Tonbridge Medical Technology is a medical technology company dedicated to the innovative research, development, manufacturing, and commercialization of neurovascular and peripheral vascular interventional devices. Its product portfolio includes devices such as the Thrombite Clot Retriever Device, Ultrafree Drug Coated PTA Balloon Catheter, and Zenflex Peripheral Stent System. The company was founded in 2012 and is headquartered in Hangzhou, China.

Zylox-Tonbridge Medical Technology (2190 HK)

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Zylox-Tonbridge Medical Technology (2190 HK)

MicroTech Medical IPO: Thoughts on First Day Trading

MicroTech priced its IPO at HK$30.50 per share which significantly overvalues the shares. We expect the company's shares to open poorly at its...

Shifara Samsudeen, FCMA, CGMA

Broncus IPO: Thoughts on First Day Trading

Though Broncus priced its IPO at the top-end of its price range, our reverse DCF model suggests that Broncus’ IPO is overvalued. We expect shares...

Shifara Samsudeen, FCMA, CGMA

Shanghai Heartcare IPO: Thoughts on First Day Trading

We expect Heartcare’s IPO to remain under pressure at its open due to uncertainty regarding the lawsuit with Medtronics despite being priced at a...

Shifara Samsudeen, FCMA, CGMA

Heartcare (心玮医疗) IPO Trading: Risk-Off for Institutional Investors

We analyze the new information for HeartCare IPO. We think the demand is not strong and debut performance will be under pressure given the overhang...

Ke Yan, CFA, FRM

Acotec Scientific IPO: Valuation Insights

Our base-case DCF valuation is HK$21.65 per share, which is a -6% downside to the mid-point of the IPO price range. Consequently, we think the...

Arun George

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