Daily Brief China: Guming Holdings, Vesync and more

In today’s briefing:

Guming Holding IPO Valuation Analysis
China Healthcare Weekly (Feb.9) – Vesync Is a High-Quality Company, VBP to Cover Retail Pharmacies
Weekly Deals Digest (09 Feb) – Guming, Hexaware, Shibaura, Fuji Soft, Proto, Tohto, Pentamaster

Guming Holding IPO Valuation Analysis

Our base case valuation of Guming Holding is implied target price of HKD 13.70, which is 38% higher than the high end of the IPO valuation range.
Given the solid upside, we have a Positive view of this IPO. Our valuation sensitivity analysis suggests a range of HKD 11.09 to HKD 16.57 per share.
Our base case valuation is based on 2025E P/S multiple of 3x, which is a 30% premium to the two closest comps (Sichuan Baicha Baidao Industrial and Helens International Holdings).

Relevant departments are discussing the promotion of drugs included in VBP scope to enter retail pharmacies. However, the new business model will be detrimental to valuation performance for retail pharmacies.
The gap in the distribution of funds among biotech companies is rapidly widening. We suggest investors focus on leading biotech rather than take risks in areas with higher uncertainties.
Vesync is a good company. Due to the low liquidity, the Proposal presents a good opportunity for shareholders to exit. Considering its future growth potential, Share Alternative can be considered.

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Hexaware Technologies (HEXW IN) seeks to raise US$1 billion, and Guming Holdings (1364 HK) seeks to raise US$202 million.
Event-Driven developments: Shibaura Electronics (6957 JP), Fuji Soft Inc (9749 JP), Proto Corp (4298 JP), Tohto Suisan (8038 JP), Tecnos Japan (3666 JP), Pentamaster International (1665 HK).

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network