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Saturday, 16 December 2017

Clearbridge Health Limited



For Info only as there is no public tranche. I also caveat that i know nothing about the biotech industry. Too "genomic-ally Greek" to me...

Clearbridge Health Limited ("Clearbridge" or the "Company") is placing out 88m New Shares at $0.28 each for a listing on Catalist. There is no public offering and the Company will commence trading on SGX on 18 Dec 2017. Based on the IPO price, the market cap of the Company is $134.7m You can find the prospectus here.

Principal Business

The Company is a healthcare company with a focus on delivery of precision medicine in Asia ...🤔... and its vision is to empower clinicians and healthcare professionals to make more reliable and accurate diagnoses, provide insights to disease management and tailor personalised prevention and timely treatment programmes for patients.


It provides lab testing services, owns and operates medical centres and invest strategically in precision medical technological companies. 

Lab Testing Services

The Company currently provides lab testing services comprising clinical diagnostics as well as lifestyle and wellness management testing services. You can read more about the different services below.


Owns and Operates medical clinics

In addition, the Company owns and operates two medical clinics in Singapore and Hong Kong and has entered into a term sheet for acquiring a medical centre in Philippines. The Company intends to collaborate with local partners in Indonesia, Myanmar, India, Malaysia and the PRC.  It is adopting a data drive approach to healthcare and the deployment of diagnostics and screening tools by leveraging on its business in laboratory testing services.

Investment Merits

Let's see what the company says about itself... in terms of investment merits


Future Business and Prospects

Financial Highlights

The financials show that this is still a "start-up" company and the Company is generating revenue of less than $1m and loss making. Investors have to "believe" in the prospectus of what the Company is doing.

The NAV per share, after adjusting for the IPO, is around 13.8 cents. This is a huge premium over the issue price of 28 cents.

Ownership


More than 50% of the shareholders have agreed to be locked up in one way or another, thus there wouldn't be much float post the IPO

Use of IPO Proceeds

The Company is raising money primarily to expand its medical clinics organically and through acquisitions.


What I like about the Company
  • Experienced management  - Clearbridge is led by an experienced CEO who previously ran Cordlife. 
  • "Young" industry with potential - Precision medicine is probably a young industry with high growth potential. It includes the study and analytics of one's DNA and genetics. The belief is that everyone is "made differently" and by knowing your own "genetic composition", doctors and physicians will be able to use more appropriate medication and treatment.  
  • Right demographics in Singapore - As the population in Singapore gets older, wiser and hopefully richer, they will demand a higher quality of medical treatment and the rising affluence and awareness of precision medicine will be a big boost for Clearbridge.
  • Substantial Shareholders invested at around IPO price - QED Innovate injected $32m at around 27.74 cents
Some of my concerns
  • Source and reliability of data - Genomics require a large sample of data. What the Company is doing is nothing new or ground breaking. What the Company needs is access to large and reliable databases. If the Company is able to penetrate and work closely with the local hospitals, this would be ground breaking 
  •  Can the Company break into the Asian market successfully? - For the Company to be successful in Asia, it will need to break into the Asian markets. This will not be an easy task considering how tough and unique each market in Asia is
  • The Company has not proven its earnings capabilities  - Clearbridge is still clearly not revenue generating and is loss making.
  • Future funding may dilute the value- The Company will need to raise funds in future for expansion and potentially, that may be dilutive to existing investors
  • Thin trading liquidity post listing - Post the IPO, more than 50% of shares will be under moratorium and with only 18.3% in public shareholders, liquidity is likely to be limited  
Fair value

The Company is loss making and not generating substantial revenue. I wouldn't attempt to give a fair value here.  I understand the IPO issuance is well supported by several familiar players in the marketplace (see list from placement announcement below). Coop International is a subsidiary of Bonvests Holdings while Benny Yeo is the well known face behind MM2 Asia and Unusual.


My Chilli Ratings

My chilli rating is irrelevant but i would have probably gave it a one chilli. This IPO should be well orchestrated debut. Vested.

Polling time

You can vote here.


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