Daily BriefsIPOs and Placements

Equity Capital Markets: WeDoctor Holdings, Zhaoke Ophthalmology Pharmaceutical, YishengBio, Coinbase, Sona BLW Precision Forgings, E Mart Inc, Shanghai Bio-Heart Biological Technology and more

In today’s briefing:

  • We Doctor Pre-IPO (微医) – Remedying Pain Points
  • Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Thoughts on Valuation
  • YishengBio (依生生物) Pre-IPO: Need a Faithful Bet in PIKA
  • Coinbase IPO – Why You Can Justify a $100bn Valuation… If You Want
  • Sona Comstar IPO Initiation: Shifting Gears
  • 2020 Financials Comparison of Kurly Vs SSG.Com (IPO Candidates in 2021 & 2022)
  • Pre-IPO Shanghai Bio-Heart Biological Technology – Here Are the Strength and Concerns

We Doctor Pre-IPO (微医) – Remedying Pain Points

By Zhen Zhou, Toh

WeDoctor Holdings (1737089D HK)  is looking to raise US$2bn in its upcoming Hong Kong IPO. 

Prior to the filing, we had looked at the background of the company, did an app walkthrough, and brief comparison with other online medical providers like JD Health and Ping An Good Doctor

In this note, we will take a closer look at the company’s business models, financials, operating data and share our initial thoughts on the company.


Zhaoke Ophthalmic (兆科眼科) Pre-IPO: Thoughts on Valuation

By Ke Yan, CFA, FRM

Founded by Lee’s Pharma, Zhaoke offers a comprehensive ophthalmic product pipeline. The company is looking to raise up to USD 200m via a Hong Kong listing.

In our previous note, we looked at the company’s two products, namely CsA gel and ZKY001. We are of the view that CsA gel does provide advantage over Restasis, the top selling eye gel for the DED, but the forecast of market growth is too aggressive for the DED market. For another core product ZKY001, while there is no data on the efficacy from Phase I clinical trial, we do note that the licensing parnter’s product which uses the same technology but on a different indication, did not meet the primary end point in Phase III clinical trial according to a recent announcement, which raises our concern on the potential of the product candidate. In addition, the company also had a long list of generic referencing top selling glaucoma drugs. The company has an OK management team but strong backing of institutional investors.  

In this note, we provide a forecast on the company’s two core products CsA gel and the ZKY001. 

Our previous coverage on Zhaoke Ophthalmic


YishengBio (依生生物) Pre-IPO: Need a Faithful Bet in PIKA

By Ke Yan, CFA, FRM

YishengBio is a China-based biopharmaceutical company with a focus of developing PIKA based technology for vaccine and oncology. The company plans to raise up to USD 200m via a Hong Kong listing.

We look at the company’s main product, the PIKA based rabies vaccine and the rabies vaccine market. We are of the view that there is limited upsides from the rabies vaccine market given the oligopoly market structure. New comers, unless offering a much lower price, will find it challenging to acquire a market share from the incumbent players. Having said that, we do see that the company’s PIKA based rabies has advantages of less injection and few visits for patients. In addition, the company is using the PIKA technology for oncology and HBV vaccine. We think to invest in the company is to bet on the PIKA technology that has not been proven working in indications other than rabies. We also highlight past GMP non-compliance issues with the company and as a result it suspended production of rabies vaccine for 7 years.

The company’s management team is mediocre but the pre-IPO investor line up is strong. 


Coinbase IPO – Why You Can Justify a $100bn Valuation… If You Want

By Mio Kato

Coinbase’s business model and profitability are very heavily affected by cryptocurrency trading volumes which are in turn very heavily affected by the absolute price of cryptocurrencies and the trend in price, particularly for bitcoin. Due to the volatility of these prices, it makes estimating sustainable profitability difficult. However, we believe it is possible to gauge what plausible ranges are.


Sona Comstar IPO Initiation: Shifting Gears

By Arun George

Sona BLW Precision Forgings (SPF IN)/Sona Comstar is one of India’s leading auto technology companies that designs, manufactures, and supplies highly engineered, mission-critical systems and components. Sona Comstar is looking to raise Rs60 billion ($820 million) through an IPO in India as soon as April, according to press reports. The offer comprises a primary raise of Rs3 billion ($41 million) and a secondary raise of Rs57 billion ($777 million). The selling shareholder is Blackstone Group LP (BX US).  

Sona Comstar’s broad product portfolio which spans both conventional and electrified powertrains position it to gain from high growth auto industry trends (rising penetration of mild hybrids/full hybrids and battery electric vehicles) as well as various Government of India initiatives to spur the growth of the auto industry (such as recently announced Rs570 billion production-linked incentive scheme). Overall, we think that Sona Comstar is an attractive and alternative play on the electric vehicle market.


2020 Financials Comparison of Kurly Vs SSG.Com (IPO Candidates in 2021 & 2022)

By Douglas Kim

In this insight, we compare the key financials and metrics of Kurly versus SSG.com. Kurly is a leading fresh food e-commerce company in Korea. Kurly is preparing for an IPO (most likely in the US) in 2H 2021. SSG.com is the e-commerce platform of E Mart Inc (139480 KS). SSG.com is also an IPO candidate but its IPO is more likely in 2022/2023. After the hugely successful IPO of Coupang (CPNG US), there has been a lot more interest in the competitors of Coupang that could also be the next IPO candidates. 

Kurly has selected Goldman Sachs, Morgan Stanley, and JP Morgan as its lead underwriters for the IPO listing in the US in 2H 2021. Kurly’s founder & CEO Kim Seul-Ah is an ex-Goldman Sachs banker. Kim Jong-Hoon, the CFO of Kurly, worked previously at Morgan Stanley. 

Attaching lower valuation multiples for Kurly (5x to 10x P/GP, using 2020 figures, which would be much lower than Kurly’s P/GP ratio of 29.5x at $4.4 billion valuation), this would suggest potential valuation of 3.1 trillion won (US$2.7 billion) to 6.0 trillion won (US$5.4 billion) for SSG.com. Given that Emart has a 50.1% stake in SSG.com, this would represent a 32% and 65% in Emart’s market cap, respectively. 


Pre-IPO Shanghai Bio-Heart Biological Technology – Here Are the Strength and Concerns

By Xinyao (Criss) Wang

On Feb. 26, 2021, Shanghai Bio-Heart Biological Technology (BHT HK) applied to list on the main board of the Hong Kong Stock Exchange. In China, cardiovascular medical device market is a very promising market with large growth potential. Domestic leading companies include Lepu Medical Technology A (300003 CH) and Microport Scientific (853 HK). Bio-heart’s business mainly focuses on bioresorbable scaffolds (BRS) and renal denervation (RDN). So how about Bio-heart compared with other strong players in the market? The following mainly analyzed both the strengths and the concerns of the Company.


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