Aequitas Research - Hangzhou Tigermed Consulting Co. Ltd. Class A (300347) Tigermed (æ³°æ ¼åŒ»ç–—) A+H - PHIP updates and thoughts on valuation

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Aequitas Research

Ke Yan

EUR 96.36 For Business Accounts Only

Tigermed (æ³°æ ¼åŒ»ç–—) A+H - PHIP updates and thoughts on valuation

Hangzhou Tigermed, a leading China-based CRO company, is seeking a USD 1.5 bn H-share listing in Hong Kong.

In our previous note, we discussed that the company was listed on the A-share market in 2012. Once listed in Hong Kong, it will be the best CRO company offering exposure to the clinical CRO business in China and therefore will likely receive strong interest from international investors (particularly those who can't invest in the A-share market). The company's A-share already has investments by quality investors and was widely held by offshore investors via the northbound stock connect.

In this note, we look at updates from the latest filing. Despite the impact of COVID-19 situation, Tigermed still registered a high single-digit revenue growth in 1Q2020. However, the company also guided that profit in 2020E could be lower than what they have achieved in 2019. Besides the negative impact of COVID-19, the low expectation is also due to the high base of financial gains from financial assets in 2019.

We examine the A-H premium of its close peers. Although its two peers are trading at a big gap in terms of A-H premium, we note that their PER multiple is indeed close to each other and we would price Tigermed at a slight discount to peers, given gains from financial assets account for a significant portion of its profit.

20/07/2020 6 EN

Underlying

Hangzhou Tigermed Consulting Co. Ltd. Class A

Hangzhou Tigermed Consulting Co., Ltd. is a China-based company principally engaged in the provision of clinical research services. The Company provides clinical research related consulting services and clinical test technical services. Its technical services include researcher selection, experiment plan designing, test monitoring, the management and collection of clinical test data, as well as the management of drugs applied in experiments, among others. Its research projects cover hepatitis, oncology and cardiovascular fields, among others. The Company operates businesses in both domestic and overseas markets.

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CNE100001KV8 Shenzhen Stock Exchange China

Provider

Aequitas Research

Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.

Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.

Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.

Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.

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Analysts

Ke Yan

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Tigermed (æ³°æ ¼åŒ»ç–—) A+H - PHIP updates and thoughts on valuation

Hangzhou Tigermed Consulting Co Ltd: 1 director

Asymchem Labs A/H Listing

Asymchem Labs A/H Listing

Onewo Space-Tech Pre-IPO

Legend Biotech Follow-on Offering

Xtep International Placement

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