IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/probiotec-ltd" target="_blank" data-smartkarma-citation="entities:12047:1" rel="noopener">Probiotec Ltd (PBP AU)</a> IE considers <a href="https://www.smartkarma.com/entities/pyridam-farma-tbk-pt" target="_blank" data-smartkarma-citation="entities:12900:1" rel="noopener">Pyridam Farma (PYFA IJ)</a>’s A$3.00 offer fair and reasonable as it is within its A$2.79-A$3.28 per share valuation range.</li>
<li>The scheme remains conditional on shareholders' (Probiotec and Pyridam), FIRB, and OJK approvals. Probiotec can also pay a permitted dividend of up to A$0.04 per share.</li>
<li>The gross spread of 4.9% (6.3% including dividends) reflects doubts about Pyridam’s funding credibility, as Pyridam’s market cap is 16% of Probiotec’s implied by the offer.</li>
</ul>


The Probiotec Ltd (PBP AU) IE considers Pyridam Farma (PYFA IJ)’s A$3.00 offer fair and reasonable as it is within its A$2.79-A$3.28 per share valuation range.
The scheme remains conditional on shareholders' (Probiotec and Pyridam), FIRB, and OJK approvals. Probiotec can also pay a permitted dividend of up to A$0.04 per share.
The gross spread of 4.9% (6.3% including dividends) reflects doubts about Pyridam’s funding credibility, as Pyridam’s market cap is 16% of Probiotec’s implied by the offer.


Probiotec (PBP AU): Scheme Vote on 29 May as Doubts on Pyridam’s Funding Linger

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Dr. Reddy's Laboratories / Equity Bottom-Up

<ul>
<li>Global generics revenue increased 9% YoY to INR61 billion, mainly driven by double-digit growth in North America and Europe generic businesses, partly offset by muted growth in domestic market.</li>
<li>Revenue from North America generics increased 13% y/y to INR31.7 billion, driven by growing momentum in core portfolio, Mayne integration, and favorable Fx. Pricing environment remains stable.</li>
<li>Despite increase in SG&amp;A and R&amp;D expenses, EBITDA grew 13% YoY to INR 21.8 billion. Net profit increased 33% YoY to INR14.8 billion. Both EBITDA and net profit topped estimates.</li>
</ul>


Global generics revenue increased 9% YoY to INR61 billion, mainly driven by double-digit growth in North America and Europe generic businesses, partly offset by muted growth in domestic market.
Revenue from North America generics increased 13% y/y to INR31.7 billion, driven by growing momentum in core portfolio, Mayne integration, and favorable Fx. Pricing environment remains stable.
Despite increase in SG&amp;A and R&amp;D expenses, EBITDA grew 13% YoY to INR 21.8 billion. Net profit increased 33% YoY to INR14.8 billion. Both EBITDA and net profit topped estimates.


Dr. Reddy's Laboratories (DRRD IN): Highest Ever Sales and Profit in Q2; Good Show in Key Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a> divested its retail generic portfolio. The divestment is part of the transformation strategy which refocused the company on the U.S. women’s healthcare and dermatology markets.</li>
<li>Mayne Pharma will announce FY23 result on August 25. With business restructuring and cost management, the company is expected to cut net loss significantly and turn EBITDA positive from FY24.</li>
<li>Mayne Pharma announced a share buyback for up to 10% of issued capital, which will be funded through cash reserves. As of April 30, Mayne Pharma held A$239M in cash.</li>
</ul>



Mayne Pharma (MYX AU) divested its retail generic portfolio. The divestment is part of the transformation strategy which refocused the company on the U.S. women’s healthcare and dermatology markets.
Mayne Pharma will announce FY23 result on August 25. With business restructuring and cost management, the company is expected to cut net loss significantly and turn EBITDA positive from FY24.
Mayne Pharma announced a share buyback for up to 10% of issued capital, which will be funded through cash reserves. As of April 30, Mayne Pharma held A$239M in cash.


Mayne Pharma (MYX AU): Sale of Retail Generic Portfolio Shifts Focus on US Women’s Health and Derma

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

Index Rebalance

<ul>
<li>We forecast 26 changes across the ASX50 Index, ASX100 Index, <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> and ASX300 Index at the September rebalance.</li>
<li>The review period ends tomorrow, so most changes are high probability. Though there are some changes that will be up to the discretion of the index committee.</li>
<li>There will be a lot of stock to trade on the changes to the ASX200 and indices higher up the hierarchy. But there will be a lot of pre-positioning too.</li>
</ul>


We forecast 26 changes across the ASX50 Index, ASX100 Index, S&amp;P/ASX 200 (AS51 INDEX) and ASX300 Index at the September rebalance.
The review period ends tomorrow, so most changes are high probability. Though there are some changes that will be up to the discretion of the index committee.
There will be a lot of stock to trade on the changes to the ASX200 and indices higher up the hierarchy. But there will be a lot of pre-positioning too.


S&P/​​​​​​​​​ASX Index Rebalance Preview: Potential Adds Have Outperformed

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> started FY24 on a strong note, with Q1FY24 revenue and net profit growing 29% and 18%, YoY, respectively, driven by North America generics business.</li>
<li>Revenue from North America generics increased 79% y/y and 26% q/q to INR32 billion, driven by new product launches, continued momentum in existing products, and favorable forex rates movement.</li>
<li>During Q1FY24, the company has launched six new products in the U.S. With a rich ANDA pipeline of 85 ANDAs, launch momentum is expected to accelerate in the current fiscal.</li>
</ul>



Dr. Reddy's Laboratories (DRRD IN) started FY24 on a strong note, with Q1FY24 revenue and net profit growing 29% and 18%, YoY, respectively, driven by North America generics business.
Revenue from North America generics increased 79% y/y and 26% q/q to INR32 billion, driven by new product launches, continued momentum in existing products, and favorable forex rates movement.
During Q1FY24, the company has launched six new products in the U.S. With a rich ANDA pipeline of 85 ANDAs, launch momentum is expected to accelerate in the current fiscal.


Dr. Reddy's Laboratories (DRRD IN): Q1FY24 Result- US Business Shines; PAT Jumps 18%

Australia

Mayne Pharma Group Ltd. develops and manufactures oral pharmaceuticals.  The Company produces branded generics, specialty generics, and active pharmaceutical ingredients.

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Mayne Pharma (MYX AU)

Probiotec (PBP AU): Scheme Vote on 29 May as Doubts on Pyridam’s Funding Linger

The spread reflects concerns about the credibility of Pyridam’s funding (which requires OJK approval) due to the stark disparities in market cap....

Arun George

Dr. Reddy's Laboratories (DRRD IN): Highest Ever Sales and Profit in Q2; Good Show in Key Markets

Revenue increased 9% YoY to INR69B, beating street’s expectation of INRINR68, driven by double-digit growth North America and Europe. Net profit...

Tina Banerjee