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HIAS: A shift from DCM to IPO

That there has been a shift away from the debt capital markets (DCM), was one of the takeaways from the “Healthcare and capital markets” session at this year’s HealthInvestor Asia Summit at the Marina Bay Sands in Singapore.

Last year was a big year for DCM, driven by an ability to take debt off the balance sheet, said Eugene Hong, senior vice-president, DBS Bank. In the past, he explained that cash rich healthcare companies didn’t need debt. Then perps became the idea of the day. “This year the bond appetite has tapered,” he said. There is a huge line up of IPOs coming up and the DCM market is quiet, but this is “a cyclical thing”.

Saurabh Gupta, managing director, head of consumer, retail & healthcare investment banking, at Maybank Kim Eng Securities, agreed that IPOs were the current flavour of the day. “It is fair to say that valuations have been fuelled by investor interest – institutional as well as retail,” he said. He pointed out the dynamic in Thailand that everyone with even a single hospital wants to IPO, but now across the region we are seeing medical devices, pharma companies as well as early stage drug delivery firms.

Tom Platts, partner, Stephenson Harwood (Singapore) Alliance, who chaired the panel, asked whether we should we look at private markets. “I see private capital more suited for greenfield investment,” said Fabio La Mola, managing director, L.E.K. Singapore. It was a point picked up by Hong who explained that both Raffles and IHH Healthcare were punished by the markets when they announced greenfield investment in China.  

As for M&As, “China is the big brother that is basically gobbling up everything”, said Hong. This is why valuations are being driven up while a further dynamic is the way that Chinese firms have felt the need to move away from targets in the US, thanks to political tensions between the two companies. “Now the focus on Australia,” he said.

Posted on: 15/05/2018 UTC+08:00


News

Huami Corporation, a biometric and data-driven company, has inked a new partnership agreement with PAI Health, a health technology firm.
China’s Ascletis Pharma is set to be the first firm of its kind to float on Hong Kong’s stock exchange.
Japanese robotics firm Cyberdyne is to launch an $82 million fund that will invest in the healthcare and cybernic technology sectors, it said in a statement on its website.
Daiichi Sankyo, the Japanese pharmaceutical company, has moved to block the $1 billion sale of Fortis Healthcare to Malaysia’s IHH, triggering a slide in Fortis’ share price.
SGX-listed Acromec, which designs and builds medical and sterile cleanrooms, has secured another contract in the healthcare sector valued at S$2.9 million (US$2.1 million). It is expected to be completed by the end of the year.
Sydney-based 1st Group, the Australian digital health, media and technology group, has appointed Richard Rogers as chief financial officer. He joins from Lenovo Australia & New Zealand.
Asia-focused market expansion services provider DKSH is to sell its healthcare business in China to Warburg Pincus for SFr100 million (US$100.7 million).
Summerset Group, New Zealand’s third-largest listed retirement village operator, has said that it expects underlying half year profits to jump between 21% and 26% to NZ$43 million (US$29.4 million) and NZ$45 million.



Analysis

Ping An Healthcare and Technology, formerly known as Good Doctor, has signed contracts with nearly 200 large corporations, including Vanke, Greentown, Bank of China, China Telecom, China National Nuclear Power, Evergrande Group and provides services to nearly 1.5 million employees, covering 27 provinces, autonomous regions and municipalities.
Earlier this week, Cigna Corporation released the results of its 2018 Cigna 360° Well-Being Survey – Future Assured. The findings, which were tracked over a four year period, show rising awareness of the need to prepare for old age, which includes being continually active and financially independent. As a result, people are working harder today, and increasingly calling on employers to help in managing workplace stress.
Auckland-based ehealth software company Orion Health is to sell off two significant parts of its business to private equity technology investor Hg for NZ$225 million (US$150.7 million). The sale could revitalise a company that has struggled recently.
Aon’s inaugural Asia Healthcare Trends Report 2017/18 shows that although Hong Kong has a lower medical inflation rate than the average in APAC, it is the highest in Greater China.
Out of date and unsecure fax machines are still being used to share patient information between healthcare providers in Australia. Not only do fax machines cause frustration for healthcare providers trying to communicate with each other, they can also cause patient harm.
Health and well-being programmes are fragmented and do not meet the needs of stressed Asia workforces, finds Willis Towers Watson. By and large, employers in Asia still miss the mark when it comes to their health and well-being benefits, with many employees feeling that their needs are not met, according to research from the global advisory, broking and solutions company.
According to a survey of biopharma companies by L.E.K. Consulting, the majority of firms from Western Europe or the US are interested in China, specifically those at Phase 2 or later development.
Sara Jost, global healthcare industry lead at BlackBerry, explains that putting the systems and procedures in place to deliver a healthy and secure digital healthcare system will protect patient health information and support medical innovation.
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