ChinaDaily Briefs

China: Broncus, Laowang Holding, Zhejiang Expressway Co H, Greenland Hong Kong Holdings and more

In today’s briefing:

  • Broncus (堃博医疗) Pre-IPO: Thoughts on Valuation
  • Laowang Holding Pre-IPO Tearsheet
  • Zhejiang Expressway (576 HK): Drivers in Place for Robust Outlook
  • Morning Views Asia: China South City, JSW Steel Ltd

Broncus (堃博医疗) Pre-IPO: Thoughts on Valuation

By Ke Yan, CFA, FRM

Broncus Holding is a leading interventional pulmonology company in China and globally. The company has commercialized the whole lung access navigation and treatment technology. The company is looking to raise up to USD 300 m 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. 

In this note, we will provide our thoughts on pre-money valuation of Broncus.

Laowang Holding Pre-IPO Tearsheet

By Clarence Chu

Laowang Holding is looking to raise up to US$200m in its upcoming Hong Kong IPO. The deal will be run by CICC and Huatai. 

Laowang Holding is the largest Cantonese hot pot chain restaurant in China based on revenue, as per Frost & Sullivan (F&S). It operates three self-developed distinctive brands: Want Hotpot, Guoji Hotpot and Soup for the Soul. As of the latest practicable date (23 Aug 21), it operated 135 non-franchised chain restaurants in 25 cities across Mainland China and one restaurant in Taipei, Taiwan. 

Zhejiang Expressway (576 HK): Drivers in Place for Robust Outlook

By Osbert Tang, CFA

After reporting an 8.65x surge in profit in 1H21, we think there are three drivers that should bring better outlook for Zhejiang Expressway Co H (576 HK) (ZJEC) over the next twelve months. These positive factors include further rebound in traffic and toll revenue, additional contribution from new projects and good upside from profit of Zheshang Securities Co Ltd (601878 CH)

YTD, share price of ZJEC increased by 10%, but we still see good upside potential given that it trades on only 0.9x P/B for FY21 and its ROE for 1H21 already reached 10.1% (before annualised). On earnings valuation, its 5.7x and 5.0x PER for FY21 and FY22, respectively, also appeared very attractive, in our view. 

Morning Views Asia: China South City, JSW Steel Ltd

By Charles Macgregor

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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