Category

Healthcare

Oct 31
0

Daily Brief Health Care: Guangzhou Kingmed Diagnostics, Biogen Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Guangzhou Kingmed Diagnostics (603882CH)-Soaring Accounts Receivable/Potential Bad Debt Are Big Risk
  • Biogen Inc: Push For Byooviz & Other Drivers

Guangzhou Kingmed Diagnostics (603882CH)-Soaring Accounts Receivable/Potential Bad Debt Are Big Risk

By Xinyao (Criss) Wang

  • Driven by the demand for nucleic acid testing due to COVID-19, Kingmed’s 22Q3 performance continued to grow. However, its accounts receivable also increased sharply, which would be a risk. 
  • Kingmed has to switch business in time when the huge demand for nucleic acid testing fades away.The YoY growth of other businesses would be the key to decide its outlook.
  • The current valuation of Kingmed isn’t attractive. After COVID-19 is under control, Kingmed’s YoY revenue growth could fall back to below 40%. Net profit margin could reduce to above 10%.

Biogen Inc: Push For Byooviz & Other Drivers

By Baptista Research

  • Biogen’s stock has been on a roll as the company delivered another solid set of results, surpassing Wall Street expectations on all counts.
  • Along with Eisai, there have been positive results from Clarity AD, a Phase 3 study of the lecanemab.
  • In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

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Oct 30
0

Daily Brief Health Care: Abbvie Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • AbbVie (ABBV US): Q3 Sales Miss as Humira OUS Declines; 2022 Guidance Narrowed; Dividend Raised

AbbVie (ABBV US): Q3 Sales Miss as Humira OUS Declines; 2022 Guidance Narrowed; Dividend Raised

By Tina Banerjee

  • Abbvie Inc (ABBV US) reported Q3 revenue of $14.8 billion, an increase of 5% y/y operationally, mainly driven by a 16% y/y operational growth in immunology portfolio.
  • While Humira revenue increased 7% y/y in the U.S. to $5 billion, internationally Humira revenue declined 26% y/y to $603 million due to biosimilar competition.
  • While management reiterated mid-point of 2022 adjusted EPS guidance range, they have narrowed the range to $13.84–13.88 from $13.76–13.96. 2022 revenue guidance has been slightly lowered to $58.2 billion.

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Oct 29
0

Daily Brief Health Care: Vertex Pharmaceuticals, Novartis AG and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Vertex Pharmaceuticals (VRTX US): Better-Than-Expected Q3 Result; Guidance Raised 2nd Time This Year
  • Novartis ADR: Initiation of Coverage – Latest Focus Areas & Key Drivers

Vertex Pharmaceuticals (VRTX US): Better-Than-Expected Q3 Result; Guidance Raised 2nd Time This Year

By Tina Banerjee

  • Vertex Pharmaceuticals (VRTX US) reported 18% y/y revenue growth to $2.3 billion, led by 46% growth outside the U.S. on continued strong uptake of Trikafta. U.S. revenue grew 5% y/y.
  • The company raised full-year 2022 product revenue guidance by 2% at the mid-point to $8.8–8.9 billion, representing 17% y/y growth at the mid-point.
  • The company will submit biologics licensing application (BLA) for exa-cel to the FDA, beginning in November 2022 and expects to complete the submission by the end of Q1 2023.

Novartis ADR: Initiation of Coverage – Latest Focus Areas & Key Drivers

By Baptista Research

  • This is our first report global pharma major, Novartis.
  • The company delivered a mixed set of results for the last quarter, failing to meet Wall Street expectations in terms of revenues but managing an earnings beat.
  • The innovative medicine sales grew consistently in the quarter across the U.S.

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Oct 27
0

Daily Brief Health Care: Chongqing Zhifei Biological Products, Shinpoong Pharmaceutical, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Zhifei Biological Products (300122.CH) – More Downside Ahead, with Untenable Logic in HPV Vaccine
  • Shinpoong Pharmaceutical (019170 KS): Late Entry in COVID Drug Market; Legal Overhang Still Persists
  • Human Capital Investment Is Also Necessary to Remind Valuations of Growth-Based Corporate Value

Zhifei Biological Products (300122.CH) – More Downside Ahead, with Untenable Logic in HPV Vaccine

By Xinyao (Criss) Wang

  • Due to the lack of competitiveness, Zhifei’s self-developed products cannot contribute solid performance to make up for the shrinking revenue of HPV vaccines when more competing products gradually launched.
  • The real potential of HPV vaccine market in China is not as big as imagined. So, the companies involved have the problem of inflated market values.
  • Due to low demand of COVID-19 vaccine/negative impact of pandemic on HPV vaccination, Zhifei’s revenue YoY growth could be 10%-20%; Net profit YoY growth could be negative in 2022.

Shinpoong Pharmaceutical (019170 KS): Late Entry in COVID Drug Market; Legal Overhang Still Persists

By Tina Banerjee

  • Shinpoong Pharmaceutical (019170 KS) is re-purposing its existing anti-malarial drug Pyramax as an oral treatment for the COVID-19. The company is conducting phase 3 study in six countries, including Korea.
  • South Korean oral COVID-19 treatment market is currently dominated by Paxlovid. Other domestic companies are also in race to develop homegrown oral COVID-19 drugs, thereby creating a crowded market.
  • With declining cases and hospitalizations, Pyramax has muted growth prospect as a treatment for COVID-19. Shinpoong is reporting operating loss due to accelerated R&D expenditures.  

Human Capital Investment Is Also Necessary to Remind Valuations of Growth-Based Corporate Value

By Aki Matsumoto

  • Human investment, the engine of medium-to-long-term growth, was burden for companies without high profit margins, and it wasn’t of much interest to investors seeking stock price returns from short-term perspective.
  • Today, where people are required to do jobs that machines and robots cannot do and to think about mechanisms for making them work, investing in people is becoming more important.
  • The fact that investors have focused more on short-term earnings volatility indicates that they have failed to assume growth-based corporate value in valuations. Growth investing is essential to raising valuations.

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Oct 26
0

Daily Brief Health Care: Myovant Sciences, Giant Biogene Holding, Incyte Corp, Shanghai Bio-Heart Biological Technology and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Sumitomo/​Myovant: Agreed Minorities Takeout at $27
  • Giant Biogene IPO: Peer Comparison and Valuation
  • Giant Biogene IPO: Valuation Insights
  • Incyte Corp: Acquisition of Villaris Therapeutics & Other Drivers
  • Shanghai Bio-Heart Biological Technology (2185.HK) – The Bubble Will Eventually Burst

Sumitomo/​Myovant: Agreed Minorities Takeout at $27

By Jesus Rodriguez Aguilar

  • Sumitomo has increased its all-cash offer by c. 19% to $27/share, a 50% premium, 4.6x EV/Fwd Revenue and corresponds to an implied equity value of $1.7 billion and EV of $2.9 billion.
  • The Board of Myovant recommends the offer, which should close in Q1 2023. The market has bought into the deal: USD turnover on 24 October has been $585 million.
  • As a result of the improved offer, I increase my TP to $27 (vs $22.84 formerly). Gross spread is 0.78% and the estimated annual return is 1.83%.

Giant Biogene IPO: Peer Comparison and Valuation

By Shifara Samsudeen, ACMA, CGMA

  • Giant Biogene Holding (GBH HK) designs, develops and manufactures professional skin treatment products with recombinant collagen as the key bioactive ingredient in China.
  • The company’s IPO offering has been downsized and now plans to raise approx. US$80m through issuing 22.6m shares at an indicative IPO price range of HK$24.3-27.7 per share.
  • Our analysis shows that Giant Biogene’s IPO is attractively priced compared to domestic and international peers, however, we expect the upside to be limited given the current market volatility.

Giant Biogene IPO: Valuation Insights

By Arun George

Incyte Corp: Acquisition of Villaris Therapeutics & Other Drivers

By Baptista Research

  • Incyte has started appreciating with its financial results being just around the corner.
  • In the last quarter, the company’s revenues rose 29% and it managed an all-around beat.
  • With an increase in new patient starts across all 3 indications, Jakafi’s net revenues increased 13% to $598 million.

Shanghai Bio-Heart Biological Technology (2185.HK) – The Bubble Will Eventually Burst

By Xinyao (Criss) Wang

  • Among innovative medical device companies in HKEX under Chapter 18A, Bio-heart is quite “special”- It is the only company without commercialized products but has higher market value than the peers.
  • The competitiveness of Bio-heart’s core products is not high. There are great uncertainties in terms of the commercialization outlook, because Bio-heart doesn’t have obvious advantages in development progress/sales capability.
  • Bio-Heart is overvalued. Its efforts to maintain high share price may be to pave the way for listing in A-share,but anything deviates from fundamentals would inevitably return to the origin. 

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Oct 25
0

Daily Brief Health Care: Innovent Biologics Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Innovent Biologics Inc (1801.HK) – The Concerns and the Outlook

Innovent Biologics Inc (1801.HK) – The Concerns and the Outlook

By Xinyao (Criss) Wang

  • Innovent Biologics Inc (1801 HK)’s share price had some rebounds last week, which could be related to some positive progress on business and the picking-up market sentiment in healthcare sector. 
  • We increased overall sales forecast for Innovent by including the two new products from Sanofi. But it’s still far from the management’s target of RMB20 billion sales in 5 years.
  • Innovent’s current commercialization capability is like a “semi-finished product”, and has long way to go. It lacks the second big product except PD-1 to “pave the way” for next-stage development.

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Oct 24
0

Daily Brief Health Care: Giant Biogene Holding and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Giant Biogene IPO: Valuation First Look

Giant Biogene IPO: Valuation First Look

By Arun George

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Oct 23
0

Daily Brief Health Care: Giant Biogene Holding, PolyNovo Ltd, Tokyo Stock Exchange Tokyo Price Index Topix and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • ECM Weekly (23rd Oct 2022) – Giant Biogene, Blibli, Bionote, Fusion Micro, Mitsubishi Estate
  • PolyNovo Ltd (PNV AU): Shares Are Rallying Fueled by Strong US Sales and New Product Approval
  • Prime Market Should Raise Market Cap Standards. Companies Should Take Measures to Raise Valuations

ECM Weekly (23rd Oct 2022) – Giant Biogene, Blibli, Bionote, Fusion Micro, Mitsubishi Estate

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPO front, Blibli launched its Indonesian IPO, while a few other names are said to be gearing up to launch in Hong Kong and India.
  • There were a few placements this week, notable ones being Mitsubishi Estate Logistics (3481 JP) and Zee Entertainment Enterprises (Z IN).

PolyNovo Ltd (PNV AU): Shares Are Rallying Fueled by Strong US Sales and New Product Approval

By Tina Banerjee

  • PolyNovo Ltd (PNV AU) reported 73% y/y revenue growth to A$12.5M in Q1FY23, driven by the U.S. The company reported record high monthly sales of A$5.4M in September 2022.
  • The company is aggressively expanding team and the increased headcount is having the desired impact on sales growth and loss continues to be minimized compared to business expansion.
  • PolyNovo received FDA clearance for NovoSorb MTX, which expands PolyNovo’s U.S. addressable market by ~A$500M. The company plans to launch SynPath in the U.S. in 2023 (addressable market ~$400M).

Prime Market Should Raise Market Cap Standards. Companies Should Take Measures to Raise Valuations

By Aki Matsumoto

  • There is a discrepancy between the prime market concept and the listing criteria of 10 billion yen in tradable market capitalization.
  • The most significant effect of the market restructuring was the elimination of parent-subsidiary listings, but companies are reluctant to discuss matters not explicitly addressed in the corporate governance code.
  • Increasing market capitalization is not an overnight solution, but companies should study the initiatives advanced by companies that have increased valuations and implement those initiatives.

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Oct 22
0

Daily Brief Health Care: WuXi AppTec Co Ltd, Bionote and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (21 October 2022)
  • Bionote Pre-IPO – The Negatives – Fortunes Generated from a Sole Related Party

Shanghai/​​​​​​​​​​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (21 October 2022)

By David Blennerhassett

Bionote Pre-IPO – The Negatives – Fortunes Generated from a Sole Related Party

By Clarence Chu

  • Bionote (377740 KS) is looking to raise approximately US$200m in its Korean IPO. The IPO would consist of both a primary and secondary selldown.
  • Bionote is an integrated producer of diagnostics test products and biocontent products. Based on its unique recombinant antigen and antibody manufacturing technology, the firm researches and develops diagnostic reagent products.
  • A large part of the firm’s fortunes came from supplying to a sole customer, which is also a related party. Margins have since come under pressure as well.

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Oct 18
0

Daily Brief Health Care: Grifols SA, Andon Health Co Ltd A, Giant Biogene Holding, Bionote and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Liquid Universe of European Ordinary and Preferred Shares: October ‘22 Report
  • SZSE1000 Index Rebalance Preview: Stock Connect & MSCI/​FTSE Eligibility
  • Giant Biogene Pre-IPO – Peer Comparison – Might Need to Spend a Lot More Online
  • BioNote IPO Valuation Analysis

Liquid Universe of European Ordinary and Preferred Shares: October ‘22 Report

By Jesus Rodriguez Aguilar

  • Since mid-September, spreads have shown a mixed performance across our liquid universe with a slight bias towards widening.
  • Trade recommendations long ords / short prefs: BMW, Fuchs Petrolub, Handelsbanken, SSAB Svenska Stal.
  • Recommendations Long prefs / short ords: Sixt, VW, MFE-Media for Europe, Grifols, Atlas Copco.

SZSE1000 Index Rebalance Preview: Stock Connect & MSCI/​FTSE Eligibility

By Brian Freitas

  • Nearing the end of the review period for the SZSE1000 Index, we estimate around 50 changes to the index. The first-order impact on the stocks is not large.
  • Stocks that are not currently in Buy/Sell Stock Connect will be added to the list. That makes them eligible for inclusion in the MSCI and FTSE indices in February/March.
  • 5 of the potential adds could be added to the MSCI China Index in February and 34 of the potential adds could be added to the FTSE All-World/All-Cap in March.

Giant Biogene Pre-IPO – Peer Comparison – Might Need to Spend a Lot More Online

By Sumeet Singh

  • Giant Biogene Holding (GBH HK)  aims to raise around US$500m in its Hong Kong IPO.
  • GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
  • We had looked at the company’s past performance in our previous notes. In this note, we’ll undertake a peer comparison.

BioNote IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation is target price of 16,182 won per share, which is 10% lower than the low end of the IPO price range. 
  • We estimate BioNote to generate sales of 535.2 billion won (down 14% YoY) in 2022 and 349 billion won (down 34.8% YoY) in 2023. 
  • Given the downside risk relative to the IPO price range, we have a Negative View of the BioNote IPO. 

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