Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Two years ago, generic pharmaceuticals co <a href="https://www.smartkarma.com/entities/sawai-group-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:35512:1" rel="noopener">Sawai Group Holdings (4887 JP)</a> traded at 10x PER, 6% ROE, and far below book. 10mos ago the price got back to 1x PBR.</li>
<li>By then, their US sub had partly been put into "Current Assets AFS" as it was for sale. By Dec23, it was completely there. In Jan, a "business review" <a href="https://pdf.irpocket.com/C4887/ZoWa/Jdfs/MhK5.pdf" target="_blank" rel="noopener">announcement</a>.</li>
<li>The US business sale led to <a href="https://pdf.irpocket.com/C4887/RLCz/a3oE/RxQz.pdf" target="_blank" rel="noopener">a loss, but growth this year</a>, and a <a href="https://pdf.irpocket.com/C4887/BbNL/QAgJ/DjCb.pdf" target="_blank" rel="noopener">new MTMP</a> in early June. Monday, we got a HUGE buyback announcement. Today, an 8+% pop.</li>
</ul>


Two years ago, generic pharmaceuticals co Sawai Group Holdings (4887 JP) traded at 10x PER, 6% ROE, and far below book. 10mos ago the price got back to 1x PBR.
By then, their US sub had partly been put into "Current Assets AFS" as it was for sale. By Dec23, it was completely there. In Jan, a "business review" announcement.
The US business sale led to a loss, but growth this year, and a new MTMP in early June. Monday, we got a HUGE buyback announcement. Today, an 8+% pop.


Sawai Group (4887) - BIGLY Buyback To "Drastically" Change Capital Structure

Global Healthcare Analyst

Tina Banerjee

Thematic (Sector/Industry)

<ul>
<li>We have screened for APAC (ex-China) healthcare companies using their respective Smart Score, a compound score for a company indicating its overall outlook based on key factors.</li>
<li>Smart Score screens the stock based on five major components including value, dividends, growth, resilience, and momentum. It also provides a cumulative score, which puts equal weightage on each parameter.  </li>
<li>Parameters used to screen the stocks: market cap≥ $800M and smart score≥ 3.5. We have seen stocks having high smart score has strong growth prospects and qualify for investment proposition.</li>
</ul>


We have screened for APAC (ex-China) healthcare companies using their respective Smart Score, a compound score for a company indicating its overall outlook based on key factors.
Smart Score screens the stock based on five major components including value, dividends, growth, resilience, and momentum. It also provides a cumulative score, which puts equal weightage on each parameter.  
Parameters used to screen the stocks: market cap≥ $800M and smart score≥ 3.5. We have seen stocks having high smart score has strong growth prospects and qualify for investment proposition.


Top APAC (Ex-China) Investment Worthy Healthcare Companies Using Smartkarma’s Smart Score Screener

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kaken-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:18819:1" rel="noopener">Kaken Pharmaceutical (4521 JP)</a> reported 42% YoY jump in revenue during H1FY25 on one-time upfront payment, while operating profit also witnessed hefty growth of 255% YoY.</li>
<li>Top selling products are impacted by NHI drug price revision and increasing competition. The company has reiterated FY25 guidance. Profitability is expected to deteriorate sequentially in H2.</li>
<li>The respite from one time receipt will not compensate for the revenue loss from the negative impact from NHI drug price revision and generic competition for top selling products.</li>
</ul>



Kaken Pharmaceutical (4521 JP) reported 42% YoY jump in revenue during H1FY25 on one-time upfront payment, while operating profit also witnessed hefty growth of 255% YoY.
Top selling products are impacted by NHI drug price revision and increasing competition. The company has reiterated FY25 guidance. Profitability is expected to deteriorate sequentially in H2.
The respite from one time receipt will not compensate for the revenue loss from the negative impact from NHI drug price revision and generic competition for top selling products.


Kaken Pharmaceutical (4521 JP): One-Off Payment Boosts H1FY25 Revenue; Headed for Another Bleak H2

David Blennerhassett

Keisei Electric Railway Co / Event-Driven

<ul>
<li>No surprise: <a href="https://www.smartkarma.com/entities/keisei-electric-railway-co" target="_blank" data-smartkarma-citation="entities:10876:1" rel="noopener">Keisei Electric Railway (9009 JP)</a> shareholders voted down Palliser's proposal. If the vote was close, Palliser may ups its rhetorical game, and takes a harder stance.</li>
<li>Argyle failed to boot one <a href="https://www.smartkarma.com/entities/china-merchants-china-direct-investments" target="_blank" data-smartkarma-citation="entities:6862:1" rel="noopener">CMCDI (133 HK)</a> director. They'll next target the management agreement renewal; and agitate the company buy back 20% of shares outstanding at 90% of NAV.</li>
<li>The Offeror now has 90.16% in <a href="https://www.smartkarma.com/entities/great-eastern-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13993:1" rel="noopener">Great Eastern Holdings (GE SP)</a> - so this will get suspended at the close of the Offer.</li>
</ul>


No surprise: Keisei Electric Railway (9009 JP) shareholders voted down Palliser's proposal. If the vote was close, Palliser may ups its rhetorical game, and takes a harder stance.
Argyle failed to boot one CMCDI (133 HK) director. They'll next target the management agreement renewal; and agitate the company buy back 20% of shares outstanding at 90% of NAV.
The Offeror now has 90.16% in Great Eastern Holdings (GE SP) - so this will get suspended at the close of the Offer.


Last Week in Event SPACE: Keisei Electric, China Merchants, Great Eastern, Jardine Matheson/JCNC

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sawai-group-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:35512:1" rel="noopener">Sawai Group Holdings (4887 JP)</a> reported muted FY23 result, with all parameters missing guidance. Miss was due to the lower-than-expected performance in Japan, which contributed 82% of revenue.</li>
<li>Sawai’s U.S. business revenue increased 22% YoY to ¥36.6B, beating guidance of ¥32.2B. The U.S. business is now back to profitability by reporting higher-than-expected operating profit of ¥930M.</li>
<li>Sawai guided for 8% revenue growth in FY24. Core operating income is projected to decline due to the soaring raw material and energy prices and an increase in upfront costs.</li>
</ul>



Sawai Group Holdings (4887 JP) reported muted FY23 result, with all parameters missing guidance. Miss was due to the lower-than-expected performance in Japan, which contributed 82% of revenue.
Sawai’s U.S. business revenue increased 22% YoY to ¥36.6B, beating guidance of ¥32.2B. The U.S. business is now back to profitability by reporting higher-than-expected operating profit of ¥930M.
Sawai guided for 8% revenue growth in FY24. Core operating income is projected to decline due to the soaring raw material and energy prices and an increase in upfront costs.


Sawai Group Holdings (4887 JP): FY23 Result Missed Guidance; FY24 Guidance Calls For Lower Profits

Japan

Sawai Group Holdings Co., Ltd. manufactures and distributes medical products. The Company produces drugs, healthcare products, and other products. Sawai Group Holdings also produces medical equipment.

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Sawai Group Holdings (4887 JP)

Sawai Group (4887) - BIGLY Buyback To "Drastically" Change Capital Structure

Sawai Group has announced a large buyback, effectively putting the 3 year MTMP buyback into Year 1, all executed in the market. That means 10% of...

Travis Lundy

Top APAC (Ex-China) Investment Worthy Healthcare Companies Using Smartkarma’s Smart Score Screener

We have screened APAC (ex-China) healthcare companies with market cap≥$800M using Smartkarma’s Smart Score and picked up 2 investable ideas by...

Tina Banerjee

Kaken Pharmaceutical (4521 JP): One-Off Payment Boosts H1FY25 Revenue; Headed for Another Bleak H2

Kaken Pharmaceutical sees strong revenue and profit growth in H1FY25, but faces challenges ahead with NHI drug price revisions and increased...

Tina Banerjee

Last Week in Event SPACE: Keisei Electric, China Merchants, Great Eastern, Jardine Matheson/JCNC

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett