At the meeting, Mr. Mao Hua analyzed the importance of industry analysis in Hong Kong stocks and its focus areas. He not only introduced the specific work content and methodology of industry analysis during the listing process in Hong Kong but also emphasized the important role played by Frost & Sullivan in Hong Kong stock listings.
He introduced that the work process for listing on the Hong Kong stock market mainly consists of three lines: business, finance, and legal affairs. Industry analysis plays an important role in the business sector. The main responsibilities of industry consultants include writing industry reports, building sales forecast models based on company operations, reviewing and assisting with early-stage prospectus industry sections, answering questions related to industries at the Hong Kong Stock Exchange, and preparing investors' inquiries about company operations and industries. Throughout the entire Hong Kong stock listing cycle, industry analysis has played an important role in multiple stages from the initial phase to the middle and later stages.
Subsequently, Mr. Mao Hua further elaborated on the importance and methodology of industry analysis. In Hong Kong stock listings, although industry consultants are an objective third-party role, their analytical dimensions must always take into account the positions of the market, companies, and investors. Industry research analyzes and sorts out the hot topics in the industries where issuers operate from multiple dimensions such as market demand, policy environment, competitive environment, and stage of industry development. Based on industry analysis, industry consultants use a combination of quantitative and qualitative methods to showcase the company's highlights to investors to the greatest extent possible, making an objective and comprehensive analysis from aspects such as the scale and compound annual growth rate of the company's market, as well as the competitive advantages and market share at the business level.
In addition, he mentioned that when building predictive models for clients, the choice of valuation method needs to be combined with the company's life cycle and industry characteristics. Biotech companies applying for listing are usually in the early stages of their life cycle, characterized by high growth potential and a high proportion of intangible assets. Based on these features, the DCF (Discounted Cash Flow) valuation method can better reflect the value of such companies. In this process, industry consultants start from four major elements: disease burden, unmet clinical needs, policy benefits, and pipeline competition, to support and quantify the sales potential of the company's products to support the company valuation. For investors in biotech companies, focusing on products with high sales expectations is also the main investment logic in this sector.
Finally, he emphasized that as a company with over 20 years of experience in the capital market, Frost & Sullivan can mobilize its global office's senior research team to collaborate and provide professional and efficient consulting services to clients. The consulting services cover all industry sectors, including pharmaceuticals, medical devices, healthcare services, energy and power, financial services, consumer and entertainment, automotive travel, communication technology, education and training, and chemical materials. At the same time, Frost & Sullivan is also continuously transforming by integrating market and customer needs, providing one-stop consulting services for enterprises from media promotion, early valuation to IPO and post-listing stages, maintaining its leading position in the niche field of Hong Kong stock listed companies' consulting.
As a globally renowned growth consulting firm, Frost & Sullivan integrates 60 years of global consulting experience. For the past 23 years, it has dedicated itself to serving the booming Chinese market and has made the health industry one of its core areas of focus. Over the past sixteen years, the Frost & Sullivan healthcare team has provided financing financial advisory, IPO industry advisory, technical advisory, strategic advisory, management advisory services for hundreds of outstanding domestic and international biopharmaceuticals, medical devices, healthcare services, and internet healthcare enterprises. It is a leader and witness in the development of China's pharmaceutical industry. In terms of the number of completed transaction projects, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong healthcare IPOs, continuously occupying more than 90% of the market share from 2018 to 2020. In the future, Frost & Sullivan will continue to explore cutting-edge industry opportunities and work hand in hand with enterprises to boost innovation and upgrading of China's health industry.
