Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cochlear-ltd" target="_blank" data-smartkarma-citation="entities:918:1" rel="noopener">Cochlear Ltd (COH AU)</a> shares rallied 30%+ over the last six months. Shares are trading at NTM P/E of 51.3x, versus other Australia-listed medical devices companies’ P/E of 23–32x.</li>
<li>The underlying business strength depicted by strong financial performance and guidance raise, and superior product offerings justify the pricey valuation.</li>
<li>Cochlear lifted FY24 net profit guidance to A$385–400M (+26–31% YoY) from A$355–375M. The company expects FY24 cochlear implant volume growth of 10–15% YoY.</li>
</ul>



Cochlear Ltd (COH AU) shares rallied 30%+ over the last six months. Shares are trading at NTM P/E of 51.3x, versus other Australia-listed medical devices companies’ P/E of 23–32x.
The underlying business strength depicted by strong financial performance and guidance raise, and superior product offerings justify the pricey valuation.
Cochlear lifted FY24 net profit guidance to A$385–400M (+26–31% YoY) from A$355–375M. The company expects FY24 cochlear implant volume growth of 10–15% YoY.


Cochlear Ltd (COH AU): Underlying Business Strength Justifies Superior Valuation

New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Thematic (Sector/Industry)

<ul><li>For the first time in three years we are moving our WACC assumptions down.</li><li>This is driven by a modestly lower (-25 bps) interpolated 10-year interest rate assumption; our proxy for the risk free rate.</li><li>We also incorporate our C&amp;ESG ratings into our WACC assumptions. We do this on an overall neutral basis, with a scale of -25 bps to +25 bps added to the cost of equity. </li></ul>

For the first time in three years we are moving our WACC assumptions down.This is driven by a modestly lower (-25 bps) interpolated 10-year interest rate assumption; our proxy for the risk free rate.We also incorporate our C&amp;ESG ratings into our WACC assumptions. We do this on an overall neutral basis, with a scale of -25 bps to +25 bps added to the cost of equity. 

Equity Strategy - WACC Review; a Lower Rfr and Adding C&ESG

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gentrack-group-ltd" target="_blank" data-smartkarma-citation="entities:2752:1" rel="noopener">Gentrack (GTK NZ)</a> and <a href="https://www.smartkarma.com/entities/dorchester-pacific-ltd" target="_blank" data-smartkarma-citation="entities:1854:1" rel="noopener">Turners Automotive (TRA NZ)</a> will be added to the S&amp;P/NZX 50 Index while <a href="https://www.smartkarma.com/entities/synlait-milk-ltd" target="_blank" data-smartkarma-citation="entities:16298:1" rel="noopener">Synlait Milk (SML NZ)</a> and <a href="https://www.smartkarma.com/entities/pacific-edge-ltd" target="_blank" data-smartkarma-citation="entities:20261:1" rel="noopener">Pacific Edge (PEB NZ)</a> will be deleted.</li>
<li>There is a lot to trade on the stocks. The impact in terms of days of ADV appears high but historically there has been volume on implementation date.</li>
<li>The adds have jumped recently and there will be pre-positioning on the stocks. Not so much on the deletes.</li>
</ul>



Gentrack (GTK NZ) and Turners Automotive (TRA NZ) will be added to the S&amp;P/NZX 50 Index while Synlait Milk (SML NZ) and Pacific Edge (PEB NZ) will be deleted.
There is a lot to trade on the stocks. The impact in terms of days of ADV appears high but historically there has been volume on implementation date.
The adds have jumped recently and there will be pre-positioning on the stocks. Not so much on the deletes.


S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

Fisher & Paykel Healthcare Corp / Equity Bottom-Up

<ul><li>F&amp;P Healthcare's (FPH) 1H24 result had few surprises relative to our expectations.</li><li>The key positives of strong homecare revenue growth and better-than-expected gross margins slightly outweighed slower than expected new apps consumables revenue growth.</li><li>Looking ahead, FPH's revenue guidance (and mix commentary) implies ~+10% new apps consumables growth in FY24: a sharp slowdown from history. </li></ul>

F&amp;P Healthcare's (FPH) 1H24 result had few surprises relative to our expectations.The key positives of strong homecare revenue growth and better-than-expected gross margins slightly outweighed slower than expected new apps consumables revenue growth.Looking ahead, FPH's revenue guidance (and mix commentary) implies ~+10% new apps consumables growth in FY24: a sharp slowdown from history. 

F&P Healthcare - 1H24 Result — New Apps Slowing?

<ul><li>F&amp;P Healthcare's (FPH) 1H24 result on Wednesday, 29 November is unlikely to surprise relative to current consensus expectations.</li><li>Looking ahead, we expect minimal changes to full year guidance (revenue of NZ$1.7bn, constant currency gross margin improvement approaching ~+200bps and ~+14% constant currency opex growth), but note (in light of recent trends and currency movements) on balance risks appear more downside skewed than upside</li><li>1H24 guidance appears largely risk-free: Guidance provided at its late August AGM is for revenue of ~NZ$790m and NPAT between NZ$95m–$105m.</li></ul>

F&amp;P Healthcare's (FPH) 1H24 result on Wednesday, 29 November is unlikely to surprise relative to current consensus expectations.Looking ahead, we expect minimal changes to full year guidance (revenue of NZ$1.7bn, constant currency gross margin improvement approaching ~+200bps and ~+14% constant currency opex growth), but note (in light of recent trends and currency movements) on balance risks appear more downside skewed than upside1H24 guidance appears largely risk-free: Guidance provided at its late August AGM is for revenue of ~NZ$790m and NPAT between NZ$95m–$105m.

F&P Healthcare - 1H24 Preview — Few Surprises

New Zealand

Fisher & Paykel Healthcare Corporation Limited designs, manufactures and markets heated humidification products and systems for use in respiratory care and the treatment of sleep apnea.  The Company also offers patient warming and neonatal care products, including warming products and infant resuscitators.

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Fisher & Paykel Healthcare Cor (FPH AU)

Cochlear Ltd (COH AU): Underlying Business Strength Justifies Superior Valuation

Cochlear lifted FY24 net profit guidance 8% to A$385–400M (+26–31% YoY). The company expects FY24 cochlear implant volume growth of 10–15% YoY from...

Tina Banerjee

Equity Strategy - WACC Review; a Lower Rfr and Adding C&ESG

For the first time in three years we are moving our WACC assumptions down. This is driven by a modestly lower (-25 bps) interpolated 10-year...

Forsyth Barr

S&P/NZX 50 Index Rebalance: Two High Impact Changes Coming Up

As expected, Gentrack and Turners Auto will replace Synlait Milk and Pacific Edge in the NZX50 Index. The adds have jumped recently and there...

Brian Freitas

F&P Healthcare - 1H24 Result — New Apps Slowing?

F&P Healthcare's (FPH) 1H24 result had few surprises relative to our expectations. The key positives of strong homecare revenue growth and...

Forsyth Barr

F&P Healthcare - 1H24 Preview — Few Surprises

F&P Healthcare's (FPH) 1H24 result on Wednesday, 29 November is unlikely to surprise relative to current consensus expectations.

Forsyth Barr

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