In today’s briefing:
- Pre-IPO ADICON Holdings Limited – Uncertain Growth and Outlook in Post-COVID Era
Pre-IPO ADICON Holdings Limited – Uncertain Growth and Outlook in Post-COVID Era
- The revenue generated from COVID-19 business would not be sustainable in the long term. The lower price of COVID-19 tests, DRGs, centralized procurement and fierce competition would drag down margins.
- ADICON hasn’t established enough advantage and moat to secure its leading position and could be overtaken by competitors.The weak R&D makes ADICON difficult to gain an edge in esoteric tests.
- Considering the fierce competition, lower margins, the decline of COVID-19 business revenue, and poor liquidity and IPO market sentiment in HKEX, the PE could be below 10.
Before it’s here, it’s on Smartkarma
