Smartkarma Daily Briefs

• China Traditional Chinese Medicine (570 HK) (“TCM”) is the traditional Chinese medicine arm of SASAC-managed China National Pharmaceutical Group Corporation (CNPGC), one of the largest healthcare groups in China.
• By my reckoning, TCM has fielded three Offers in the past decade, all from Sinopharm Hongkong, an indirect wholly-owned subsidiary of CNPGC and TCM’s major shareholder.
• TCM was suspended “pursuant to the Code on Takeovers and Mergers” earlier today. The Real McCoy? A no-deal again from CNPGC/Sinopharm? And why didn’t the last Offers complete?

• Agilus Diagnostics Limited (SRLL IN) is looking to raise around US$200m in its upcoming India IPO.
• Agilus Diagnostics Limited (Agilus) is a diagnostic testing service provider.
• In this note, we look at the company’s past performance.

• Demonstrating dependable growth – Q1-3 FY3/2024 results were in line with company guidance, driven by a combination of demand recovery in the Americas, sustained growth for Shofu’s competitive Chemical Products (CAD/CAM resin materials and restorative filling materials), and a forex tailwind – overseas sales made up 57.4% of total sales, indicating stable progress towards the long-term target of 66.0%.
• Shofu’s focus on business investment in R&D, recruitment, and sales activities has resulted in a limited growth profile at the operating profit level for the period (+3.9% YoY), but we believe a boost in sales volume will drive a margin enhancement into Q4 FY3/2024 and beyond.

• Americas and China gaining momentum – the highlight for Q1-3 FY3/2024 was sales growth in North America & Latin America growing 4.1% YoY versus a 4.5% decline in Q1-2 FY3/2024. China also maintained strong momentum with sales growth of 16.5% YoY, and Europe remained steady at 16.8% YoY

• Entero Healthcare Solutions Limited (2294842D IN) is looking to raise US$193m in its India IPO.
• Entero Healthcare Solutions (Entero) is a healthcare products distributor in India.
• In this note, we will look at the RHP updates, undertake a peer comparison, and share our thoughts on valuation.

AFT Pharmaceuticals has announced the launch of Maxigesic IV, an intravenous form of its flagship pain relief prescription medicine, in the US market by licensing partner Hikma, under the brand name Combogesic IV. This is a major milestone given the market size (largest analgesic market, estimated at c US$7bn) and strategic importance in supporting management’s international growth plans. Commercial sales following the launch will trigger a milestone payment of US$6m from Hikma (65:35% split between AFT and partner Hyloris), which will be recorded (c NZ$6m) in FY24, sooner than our estimate of early FY25, and should provide a boost to management’s NZ$22–24m operating profit guidance.

• Stryker Corporation presented impressive financial results during their recent earnings call, driven by a robust demand for both procedures and capital, strong pipeline production, and the easing of macro constraints.
• The company exceeded $20 billion in sales, marking another high-growth year, and reported over 11% sales growth in Q4 and for the full year.
• Margin recovery continued as well, with a 13% compared to the full year of 2022, due to strong sales.

• Thermo Fisher Scientific was able to engage in strong execution and display solid operational discipline in 2023.
• For that year, the company reported a revenue of $42.9 billion, an adjusted operating income of $9.81 billion and adjusted earnings per share of $21.55.
• Thermo Fisher Scientific attributes these achievements to its efforts of delivering differentiated short-term performance while also strengthening its long-term competitive position.

VolitionRx continues to make headway in growing a body of clinical evidence to build Nu.Q® NETs as a potential breakthrough tool in sepsis. These efforts, coupled with its CE mark in Europe, are a strong foundation in rapid and simplified sepsis detection that seeks to address the limitations and complexities of the current standard of care. Sepsis (immune-system triggered organ dysfunction) has a worrisome prevalence, affecting c 50 million per year with a mortality rate of c 20–25%, exceeding the combination of many leading cancers. Further, every hour of delayed treatment increases the chances of mortality of this preventable condition by c 8%. In this note we recap VolitionRx’s recent clinical updates, as we look forward to near-term improvements in early sepsis detection.

• GSK’s performance in 2023 has demonstrated strong growth, with sales and profits excluding COVID solutions rising by double-digit levels.
• Sales increased by 14% to over GBP 30 billion, with adjusted operating profit up by 16% and adjusted EPS up by 22%.
• This strong performance enabled the company to upgrade their guidance for 2023, and they have now announced an increased dividend of 58p per share.

• HCA Healthcare Inc.
• had a robust fourth quarter in 2023, which exceeded expectations across most business dimensions.
• Demand for services remained high across the company’s diverse portfolio.