Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Syngene International Ltd / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/syngene-international-ltd" target="_blank" data-smartkarma-citation="entities:26923:1" rel="noopener">Syngene International Ltd (SYNG IN)</a> provides integrated services from early discovery to commercial supply across all major therapeutic areas and modalities. The company has 400+ active clients.</li>
<li>To capitalize on the secular industry tailwind, the company has been investing to enhance capacity and capability, which has led to extension of existing client relations and engaging new clients.</li>
<li>For FY23, the company expects high-teens revenue growth and EBITDA margin of ~30%. Operating leverage is expected to improve from next year onwards, and that should improve the overall profitability.</li>
</ul>



Syngene International Ltd (SYNG IN) provides integrated services from early discovery to commercial supply across all major therapeutic areas and modalities. The company has 400+ active clients.
To capitalize on the secular industry tailwind, the company has been investing to enhance capacity and capability, which has led to extension of existing client relations and engaging new clients.
For FY23, the company expects high-teens revenue growth and EBITDA margin of ~30%. Operating leverage is expected to improve from next year onwards, and that should improve the overall profitability.


Syngene International Ltd (SYNG IN): Well-Positioned to Capitalize On Strong Industry Tailwind

<ul>
<li>In 2022, <a href="https://www.smartkarma.com/entities/samsung-biologics-co-ltd" target="_blank" data-smartkarma-citation="entities:22932:1" rel="noopener">Samsung Biologics (207940 KS)</a> posted record-high consolidated revenue of KRW3 trillion and, driven by new orders, efficient plant utilization, and inclusion of Samsung Bioepis as a wholly-owned subsidiary.</li>
<li>Plant 4 is on track to be completed in H12023, with active pre-sale activities are rapidly locking in capacity. Strong order momentum continued, with 2022 CMO contract amount of $9.5B.</li>
<li>Samsung Bioepis reported revenue growth of 12% to KRW946B, driven by stable sales of existing products and new product launch. Humira biosimilar launch in the US is the biggest catalyst.</li>
</ul>


In 2022, Samsung Biologics (207940 KS) posted record-high consolidated revenue of KRW3 trillion and, driven by new orders, efficient plant utilization, and inclusion of Samsung Bioepis as a wholly-owned subsidiary.
Plant 4 is on track to be completed in H12023, with active pre-sale activities are rapidly locking in capacity. Strong order momentum continued, with 2022 CMO contract amount of $9.5B.
Samsung Bioepis reported revenue growth of 12% to KRW946B, driven by stable sales of existing products and new product launch. Humira biosimilar launch in the US is the biggest catalyst.


Samsung Biologics (207940 KS): 2022 Revenue Surpassed KRW3T; Strong Growth Momentum to Continue

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.</li>
<li>Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.</li>
<li>We highlight 33 pair trades that involve Korean holdcos and opcos.</li>
</ul>


In this insight, we highlight the pricing gap divergences of the major Korean holdcos and opcos in 1Q 2023.
Of the 33 pair trades, 2/3 of them involved holdcos outperforming opcos in the past year and 1/3 of them involved opcos outperforming holdcos in the same period.
We highlight 33 pair trades that involve Korean holdcos and opcos.


Korean Holdcos Vs Opcos Gap Spreads Opportunities in 1Q 2023

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>The review period for the March rebalance ends on 31 January, the changes will be announced towards end February and implemented at the close of trading on 9 March.</li>
<li>We forecast one add/delete for the Game Index, and a couple of adds/deletes for the BBIG Index. There will be a lot of capping changes.</li>
<li>The largest inflows are expected on <a href="https://www.smartkarma.com/entities/posco-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:12421:1" rel="noopener">Posco Chemical (003670 KS)</a> and <a href="https://www.smartkarma.com/entities/douzone-bizon-co-ltd" target="_blank" data-smartkarma-citation="entities:20161:1" rel="noopener">Douzone Bizon (012510 KS)</a>; the largest outflows are expected on <a href="https://www.smartkarma.com/entities/sk-innovation-co-ltd" target="_blank" data-smartkarma-citation="entities:1268:1" rel="noopener">SK Innovation (096770 KS)</a> and <a href="https://www.smartkarma.com/entities/kmw-co-ltd" target="_blank" data-smartkarma-citation="entities:2834:1" rel="noopener">KMW (032500 KS)</a>.</li>
</ul>


The review period for the March rebalance ends on 31 January, the changes will be announced towards end February and implemented at the close of trading on 9 March.
We forecast one add/delete for the Game Index, and a couple of adds/deletes for the BBIG Index. There will be a lot of capping changes.
The largest inflows are expected on Posco Chemical (003670 KS) and Douzone Bizon (012510 KS); the largest outflows are expected on SK Innovation (096770 KS) and KMW (032500 KS).


KRX New Deal Index Rebalance Preview: Some Big Impact Names

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>At this point, one constituent change is expected, and LG Chem is expected to replace KT&amp;G.</li>
<li>The return of the equal-weighted long/short basket trade for the constituent changes in the past two years was recorded from 2.3% to 3.8%.</li>
<li>Both LG Chem and KT&amp;G are expected to have a significant rebalancing flow impact. It can be an event that brings a juicy day trading return.</li>
</ul>


At this point, one constituent change is expected, and LG Chem is expected to replace KT&amp;G.
The return of the equal-weighted long/short basket trade for the constituent changes in the past two years was recorded from 2.3% to 3.8%.
Both LG Chem and KT&amp;G are expected to have a significant rebalancing flow impact. It can be an event that brings a juicy day trading return.


Introducing KODEX Top 5 Plus ETF Rebalancing Event

South Korea

LegoChem Biosciences, Inc. (LCB) is a researched-based biotechnology company that discovers, develops, and commercializs of medicines.  The Company utilizes chemistry to make biologics more targeted and potent for patients with diseases of highly unmet medical needs.  The Company focuses on therapy within antibiotics, anti-coagulants, oncology, antibody and protein-drug conjugate.

ST Pharm Co., Ltd.  manufactures active pharmaceutical ingredients.  The Company is also engaged in new drug custom manufacturing services, fine chemical business, and bio-therapy businesss.

Celltrion Inc. produces and sells biosimilar products and also provides consignm ent processing service for other companies.  The Company's main product is Abata cept which is for arthritis treatment

Alteogen Inc. is a pharmaceutical research company.  The Company researches and develops bio-medicines such as bio-better and bio-similar.

Yuhan Corporation manufactures and markets various pharmaceutical products on its own and through joint ventures with other global pharmaceutical companies. The Company also produces personal care products, dietary supplements, and veterinary medicines.

Macrogen Inc. provides DNA sequencing and genome research services.  The Company also raises and sells transgenic and knockout mice to biotechnology institutes and pharmaceutical companies.  Macrogen develops DNA chips, which are used to improve the diagnosis and treatment of disease as well.

Celltrion Pharm Inc. manufactures and sells pharmaceutical products.  The Company products inclue drugs for for hepatic diseases, digestion, diabetes, cold and fever, anti-inflammatory, and veterinary medical products.  Celltrion also provides pharmaceutical raw materials.

Sam Chun Dang Pharm Co., Ltd. (SCD) develops, manufactures, and markets medicines for human health care.  The Company specializes in producing medical treatment drugs as well as diagnostic drugs.  SCD Pharm's products include antibiotics, respiratory stimulants, pneumonia diagnosis devices, and many others.

Hanmi Pharm. Company Ltd. produces pharmaceutical products, including antibiotics, vitamins, and intestinal tonics.  The Company also provides beverages and processes soft capsules for other pharmaceutical firms.

Hugel, Inc. is a Bio-pharmaceutical company that focuses on developing beauty/cosmetics related products.  The Company's main products include botulinum toxin and fillers.

Divi's Laboratories Ltd. manufactures pharmaceutical products which include generic drugs and their intermediates. The Company also undertakes contract research activities for other pharmaceutical companies.

Illumina, Inc. develops, manufactures and markets integrated systems for the large scale analysis of genetic variation and biological function. The Company provides a comprehensive line of products and services that currently serve the sequencing, genotyping and gene expression markets for genomic research centers, pharmaceutical companies, academic institutions and biotechnology companies.

IQVIA Holdings Inc. focuses on technology solutions and contract research services. The Company offers a broad range of solutions which includes clinical development strategies, therapeutic expertise, predictive and prescriptive analytics, and patient retention services. IQVIA Holdings serves consumer health, biopharma, and medical technology industries globally.

WuXi AppTec Co., Ltd. manufactures medical products. The Company produces biological agents, antibodies, biological diagnostic reagents, and other products. WuXi AppTec also provides biological analysis, technical study, and other services.

ICON PLC provides contract clinical research services to the global pharmaceutical industry.  The Company manages clinical studies in addition to providing data management, regulatory, and central laboratory services.  ICON currently operates offices in multiple countries.

Medpace Holdings, Inc. operates as a holding company. The Company, through its subsidiaries, provides cardiovascular, hematology, oncology, neurology, pediatrics, nephrology, and diagnostic services. Medpace Holdings serves patients worldwide.

Lonza is a global partner to the pharmaceutical, biotech and nutrition markets. The company works with healthcare customers to develop, manufacture and commercialize medical treatments and technologies to treat patients against a range of diseases. Founded in the Swiss Alps, Lonza now operates across Europe, North America, South America, Asia and Oceania.

Avantor, Inc. manufactures and distributes chemicals, reagents, and laboratory supplies. The Company offers amino acids, silicones, bioreagents, denaturants, gas, solvents, stains, dyes, and minerals. Avantor serves biopharma, healthcare, education and government, advanced technologies, life sciences, and applied materials industries worldwide.

Charles River Laboratories International, Inc. provides research tools and support services that enable drug discovery and development.  The Company provides the animal research models required in research and development for new drugs, devices, and therapies.  Charles River's customers include pharmaceutical and biotechnology companies, hospitals, and academic institutions.

Bio-Techne Corp develops, manufactures and sells biotechnology products and clinical diagnostic controls. The Company specializes in proteins, cytokines, growth factors, immunoassays and small molecules.

Samsung Biologics Co.,Ltd. manufactures bio-healthcare products. The Company develops, refines, and distributes biopharmaceutical products.

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Samsung Biologics (207940 KS)

Syngene International Ltd (SYNG IN): Well-Positioned to Capitalize On Strong Industry Tailwind

Through capacity and capability addition in biologics manufacturing and expansion of commercial API manufacturing, Syngene has expanded...

Tina Banerjee