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For Business Accounts Only
While the company derives most of its revenues from the central lab model, its in-hospital model which is characterized by recurring sales of reagent test kits is also growing rapidly.
However, looking at the company's disclosure in the IPO prospectus, we think there is a lack of details for the technical specifications of its core products.
In addition, we believe that the potential market estimates provided in the prospectus are too aggressive given that the test kits, particularly the big panels, are unlikely to be included in the reimbursement plan in the foreseeable future and hence remain a luxury product.
We are of the view that the company has quality pre-IPO investors and management team. The company was valued at USD 814 million in the pre-IPO round. We will provide our thoughts on valuation in our next note.
Burning Rock (燃石医å¦) Pre-IPO - Leading precision oncology player but short of disclosure
Burning Rock, a leading precision oncology player in China, is aiming to raise USD 100 million via a listing in the US. The company is the number one next-generation sequencing (NGS) based cancer therapy selection company with a 26.7% share in China by patients tested in 2019.While the company derives most of its revenues from the central lab model, its in-hospital model which is characterized by recurring sales of reagent test kits is also growing rapidly.
However, looking at the company's disclosure in the IPO prospectus, we think there is a lack of details for the technical specifications of its core products.
In addition, we believe that the potential market estimates provided in the prospectus are too aggressive given that the test kits, particularly the big panels, are unlikely to be included in the reimbursement plan in the foreseeable future and hence remain a luxury product.
We are of the view that the company has quality pre-IPO investors and management team. The company was valued at USD 814 million in the pre-IPO round. We will provide our thoughts on valuation in our next note.
Underlying
Burning Rock Biotech
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.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Ke Yan
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