Global Healthcare Analyst

Tina Banerjee

Thematic (Sector/Industry)

<ul>
<li>The Japanese yen has been depreciating at a rate never seen before. Amid weakening domestic currency, Japan’s healthcare stocks have mostly outperformed their regional peers, due to their export-led growth.</li>
<li>Cash rich and fundamentally strong healthcare companies in Japan, with large international revenue exposure should be the key focus areas now.</li>
<li>Two of our top picks are sitting on double-digit gains, while the other two are facing temporary setbacks. Long-term fundamental story remains intact for all of them.   </li>
</ul>


The Japanese yen has been depreciating at a rate never seen before. Amid weakening domestic currency, Japan’s healthcare stocks have mostly outperformed their regional peers, due to their export-led growth.
Cash rich and fundamentally strong healthcare companies in Japan, with large international revenue exposure should be the key focus areas now.
Two of our top picks are sitting on double-digit gains, while the other two are facing temporary setbacks. Long-term fundamental story remains intact for all of them.   


APAC Healthcare Series (Part 3)- Focus Is on Japan; Top Picks Are Mostly in The Pink of Health

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus Corp (7733 JP)</a> reported double-digit revenue and operating profit growth in Q1FY23, thanks to favorable foreign exchange rate. Adjusting for FX, revenue was flat compared to year-ago period.</li>
<li>Based on favorable foreign exchange rate, management has raised FY23 revenue and operating profit guidance by 5% and 12% to ¥1,019 billion and ¥231 billion, respectively.</li>
<li>With more than 85% of total revenue coming from international markets, Olympus should remain a prime beneficiary of Japan’s weak currency.</li>
</ul>



Olympus Corp (7733 JP) reported double-digit revenue and operating profit growth in Q1FY23, thanks to favorable foreign exchange rate. Adjusting for FX, revenue was flat compared to year-ago period.
Based on favorable foreign exchange rate, management has raised FY23 revenue and operating profit guidance by 5% and 12% to ¥1,019 billion and ¥231 billion, respectively.
With more than 85% of total revenue coming from international markets, Olympus should remain a prime beneficiary of Japan’s weak currency.


Olympus Corp (7733 JP): Started FY23 on a Strong Note Thanks to Favorable Foreign Exchange Rate

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>In last week's Int'l Compass (July 21) we discussed positive signals that suggested the lows for this bear market may have already been established, or that downside is limited.</li>
<li>But we also noted that various downtrends remained firmly intact, and that we needed to see indexes reverse their downtrends in order to get more constructive at the index level.</li>
<li>It appears the bullish reversals have begun, as the SPX, MSCI ACWI (ACWI-US), and STOXX 600 are the first three major indexes to reverse topside their 4-month and YTD downtrends.</li>
</ul>


In last week's Int'l Compass (July 21) we discussed positive signals that suggested the lows for this bear market may have already been established, or that downside is limited.
But we also noted that various downtrends remained firmly intact, and that we needed to see indexes reverse their downtrends in order to get more constructive at the index level.
It appears the bullish reversals have begun, as the SPX, MSCI ACWI (ACWI-US), and STOXX 600 are the first three major indexes to reverse topside their 4-month and YTD downtrends.


Europe, MSCI ACWI Bullish Downtrend Reversals as Japan Tests Resistance; Tech, Health Care Buys

<ul>
<li>With the declining number of daily new infections, most countries in APAC region are in process to relax their COVID-related restrictions and border re-opening.</li>
<li>While hospitals are the prime beneficiaries of re-opening, medical devices companies will also benefit from the resumption of elective surgeries. Monkeypox is not expected to have big adverse effect.</li>
<li>Investment thesis for four top picks in APAC healthcare sector remains intact, and their recent quarterly results depict their continued growth momentum.</li>
</ul>


With the declining number of daily new infections, most countries in APAC region are in process to relax their COVID-related restrictions and border re-opening.
While hospitals are the prime beneficiaries of re-opening, medical devices companies will also benefit from the resumption of elective surgeries. Monkeypox is not expected to have big adverse effect.
Investment thesis for four top picks in APAC healthcare sector remains intact, and their recent quarterly results depict their continued growth momentum.


APAC Healthcare – Good Bet on Re-Opening; Continued Strong Recovery in Top Picks

<ul>
<li>
<a href="https://www.smartkarma.com/entities/olympus-corp" target="_blank" data-smartkarma-citation="entities:356:1" rel="noopener">Olympus Corp (7733 JP)</a> reported strong double-digit revenue growth in Q4 on continued medical business recovery. Net profit has more than doubled and 40% ahead of consensus.  </li>
<li>The company has achieved growth to above pre-pandemic level in FY22 and CAGR of &gt;7% over last two years. Operating margin improved significantly to 19.3%.</li>
<li>Olympus is on track to achieve more than 20% operating margin in FY23. Management projected a record high net profit of ¥154 billion for FY23.</li>
</ul>



Olympus Corp (7733 JP) reported strong double-digit revenue growth in Q4 on continued medical business recovery. Net profit has more than doubled and 40% ahead of consensus.  
The company has achieved growth to above pre-pandemic level in FY22 and CAGR of &gt;7% over last two years. Operating margin improved significantly to 19.3%.
Olympus is on track to achieve more than 20% operating margin in FY23. Management projected a record high net profit of ¥154 billion for FY23.


Olympus (7733 JP) Q4FY22: Net Profit More Than Doubled; Record High Profit Projection for FY23

Japan

OLYMPUS CORPORATION manufactures optoelectronic products.  The Company's products include cameras, video sets, endoscopes for medicine and industrial use, microscopes, analytical equipment, office communication systems, laseroptical scanners, and ionic printers.

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Olympus Corp (7733 JP)

APAC Healthcare Series (Part 3)- Focus Is on Japan; Top Picks Are Mostly in The Pink of Health

Two of our top picks in APAC healthcare sector are sitting on double-digit gains, while the other two are facing temporary setbacks. Long-term...

Tina Banerjee