Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

Thematic (Sector/Industry)

<ul>
<li>The IVF industry is booming, driven by couples having children later in life as well as infertility problems.</li>
<li>There should be plenty of opportunities for IVF clinic operators, including for Jinxin Fertility which may benefit if the Chinese government introduces subsidies for IVF procedures. But the acquisitive nature of many IVF-related companies has caused their returns on equity and earnings per share growth to be weak.</li>
<li>One stock that trades at a low multiple with fat profit margins is Organon, though be aware of its ongoing patent cliffs, which may be the reason it was spun off in the first place.</li>
</ul>


The IVF industry is booming, driven by couples having children later in life as well as infertility problems.
There should be plenty of opportunities for IVF clinic operators, including for Jinxin Fertility which may benefit if the Chinese government introduces subsidies for IVF procedures. But the acquisitive nature of many IVF-related companies has caused their returns on equity and earnings per share growth to be weak.
One stock that trades at a low multiple with fat profit margins is Organon, though be aware of its ongoing patent cliffs, which may be the reason it was spun off in the first place.


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.

Equity Bottom-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

<ul><li>We downgrade our F&amp;P Healthcare (FPH) rating to UNDERPERFORM from NEUTRAL.</li><li>Upon reviewing recent peer results and data, we believe a material change in outlook at its 1H24 result on Wednesday, 29 November, is unlikely.</li><li>If anything, risks appear moderately downside skewed. At ~42x 12 month forward PE, FPH is arguably 'priced for perfection' with little scope to underperform relative to expectations. </li></ul>

We downgrade our F&amp;P Healthcare (FPH) rating to UNDERPERFORM from NEUTRAL.Upon reviewing recent peer results and data, we believe a material change in outlook at its 1H24 result on Wednesday, 29 November, is unlikely.If anything, risks appear moderately downside skewed. At ~42x 12 month forward PE, FPH is arguably 'priced for perfection' with little scope to underperform relative to expectations. 

F&P Healthcare - Slow Breathing—Down to UNDERPERFORM

<ul><li>We walk away with three key takeaways from F&amp;P Healthcare’s (FPH) 2023 investor day.</li><li>(1) The long-term growth runway remains strong and FPH continues to be well positioned, (2) the gross margin recovery back to FPH’s 65% target will take time, and (3) COVID-19 is no silver bullet, company commentary and industry insights highlight high flow adoption is taking place but there is unlikely to be a step change in clinical practice change and growth, with FPH needing to continue to invest to grow.</li><li>There was little information in the investor day to fundamentally change our view on the outlook, and, if anything, reinforces the significant opportunity ahead. </li></ul>

We walk away with three key takeaways from F&amp;P Healthcare’s (FPH) 2023 investor day.(1) The long-term growth runway remains strong and FPH continues to be well positioned, (2) the gross margin recovery back to FPH’s 65% target will take time, and (3) COVID-19 is no silver bullet, company commentary and industry insights highlight high flow adoption is taking place but there is unlikely to be a step change in clinical practice change and growth, with FPH needing to continue to invest to grow.There was little information in the investor day to fundamentally change our view on the outlook, and, if anything, reinforces the significant opportunity ahead. 

F&P Healthcare  - Investor Day — Repeat Flow Up to NEUTRAL

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)

IVF: Secular Growth for Decades to Come.

The IVF industry is booming, driven by couples having children later in life as well as infertility problems. There should be plenty of...

Asian Century Stocks

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

F&P Healthcare - Slow Breathing—Down to UNDERPERFORM

If anything, risks appear moderately downside skewed. At ~42x 12 month forward PE, FPH is arguably 'priced for perfection' with little scope to...

Forsyth Barr

F&P Healthcare - Investor Day — Repeat Flow Up to NEUTRAL

There was little information in the investor day to fundamentally change our view on the outlook, and, if anything, reinforces the significant...

Forsyth Barr

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