Category

Healthcare

Oct 17
0

Daily Brief Health Care: Bionote, SD Biosensor, Bloomage Biotechnology Corporation-A and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • BioNote IPO Preview
  • SD Biosensor (137310 KS): Aggressively Investing Windfall Gain From COVID; Adding New Growth Engines
  • Bloomage Biotechnology (688363.CH) – Positioning and Strategic Layout Imply Strong Upside Potential

BioNote IPO Preview

By Douglas Kim

  • BioNote, a Korean company specializing in bio contents and animal diagnostics, is getting ready for an IPO in November.
  • The IPO price range is from 18,000 won to 22,000 won per share. The IPO offering amount is from 234 billion won to 286 billion won.
  • At the high end of IPO price, its market cap would be 2.3 trillion won. Using annualized net profit of 597 billion won, this would suggest a P/E of 3.9x. 

SD Biosensor (137310 KS): Aggressively Investing Windfall Gain From COVID; Adding New Growth Engines

By Tina Banerjee

  • In July 2022, SD Biosensor (137310 KS) in partnership with SJL Partners signed a definitive merger agreement to acquire Meridian Bioscience (VIVO US)  for approximately KRW800 billion (~$1.5 billion).
  • The acquisition will strengthen SD Biosensos’s IVD platform to navigate the decline in COVID-19 testing demand and accelerate its U.S. market entry.
  • In September 2021, SD Biosensor acquired ~22% stake in UXN, which aims to launch mini continuous blood glucose meter in domestic market in 2024.

Bloomage Biotechnology (688363.CH) – Positioning and Strategic Layout Imply Strong Upside Potential

By Xinyao (Criss) Wang

  • Many interpretations of Bloomage are just looking at the surface of the Company. It is actually a biotechnology and biomaterial company, with business layout covering the whole industrial chain.
  • The biggest advantage is the innovation of raw materials.Based on synthetic biology, Bloomage is more comfortable in the richness of raw materials (hyaluronic acid/collagen etc.) and flexibility of product matrix expansion.
  • The synergy/complementarity of multiple businesses improve the resilience to market/policy changes. If investors cannot have a deep understanding of Bloomage’s positioning/real strategic intentions, they won’t seize the alpha in the future.

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Oct 15
0

Daily Brief Health Care: Meta Health Limited, Giant Biogene Holding, Seegene Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Meta Health: Forging a Digital Future for Healthcare
  • Giant Biogene IPO: Strong Growth Prospects Offsets Short-Term Margin Concerns
  • Seegene (096530 KS): Recovery of Non-COVID Sales to Drive Future Growth

Meta Health: Forging a Digital Future for Healthcare

By Geoff Howie

  • Meta Health: Forging a Digital Future for Healthcare As a result, my leadership style is one of servant leadership,” said the Chairman and Chief Executive Officer of SGX-listed Meta Health Ltd.
  • With more than two decades of professional experience in the pharmaceutical and consumer health industries, Ng is well-positioned to oversee Meta Health’s pivot to the digital healthcare space.

Giant Biogene IPO: Strong Growth Prospects Offsets Short-Term Margin Concerns

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 has filed for an IPO on the Hong Kong Stock Exchange and plans to raise proceeds of around HK$500m.
  • We remain positive on Biogene’s growth prospects as it operates in a growing market which should further benefit from regulatory tailwinds.

Seegene (096530 KS): Recovery of Non-COVID Sales to Drive Future Growth

By Tina Banerjee

  • Seegene Inc (096530 KS) reported a 30% y/y growth in revenue from non-COVID products to KRW69.5 billion in H1 2022. Q2 non-COVID product revenue was up 21% compared to Q1.
  • The company expects strong demand for respiratory virus testing in fall and winter as the flu season starts in its key markets of Europe and North America.
  • Seegene stock is trading near its lows, mainly due to muted financial performance. Seegene can be a value pick and long-term play on the non-COVID product recovery.  

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Oct 14
0

Daily Brief Health Care: iRay Technology, Ship Healthcare Holdings, Meta Health Limited and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • IRay Technology (688301.CH) – Overvalued; Performance Deceleration Will Lead to Valuation Correction
  • Ship Healthcare Holdings (3360 JP): Continues to Be a Strong Beneficiary of Japan Reopening
  • Meta Health: Forging a Digital Future for Healthcare

IRay Technology (688301.CH) – Overvalued; Performance Deceleration Will Lead to Valuation Correction

By Xinyao (Criss) Wang

  • IRay Masters all the major core technologies. It has a complete technical system of TFT SENSOR design and invention patents in the field of scintillators,setting it apart from domestic peers. 
  • The market where iRay is located has slow growth rate and obvious growth ceiling. The higher the short-term performance growth of iRay, the faster it would encounter a growth bottleneck.
  • IRay is overvalued. The valuation has already overdrawn the performance of the next few years. Any deceleration in revenue/profit in any given year would lead to a significant valuation correction.

Ship Healthcare Holdings (3360 JP): Continues to Be a Strong Beneficiary of Japan Reopening

By Tina Banerjee

  • Ship Healthcare Holdings (3360 JP), being a leading supplier of hospital consumables in Japan reported stellar Q1 results, with 7% y/y revenue growth in its medical supply business.    
  • The impact of COVID-19 is easing in Japan and economic activities are gradually returning to normal. The number of surgeries is recovering due to increasing number of medical consultations.
  • Ship Healthcare is expected to report high-single-digit revenue growth in FY23, accelerated from low-single-digit revenue growth reported in FY21 and FY22.

Meta Health: Forging a Digital Future for Healthcare

By Geoff Howie

  • Meta Health: Forging a Digital Future for Healthcare As a result, my leadership style is one of servant leadership,” said the Chairman and Chief Executive Officer of SGX-listed Meta Health Ltd.
  • With more than two decades of professional experience in the pharmaceutical and consumer health industries, Ng is well-positioned to oversee Meta Health’s pivot to the digital healthcare space.

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Oct 13
0

Daily Brief Health Care: Giant Biogene Holding, SillaJen Inc, Rainbow Children’s Hospital, Owens & Minor and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Giant Biogene IPO: The Bear Case
  • SillaJen Trade Resumption: Day Trading Setup Betting on Shooting Star Pattern
  • Rainbow Children’s Hospital (RAINBOW IN): Flying High Backed by Niche Focus and Business Recovery
  • Pre-IPO Giant Biogene – The Strength and the Concerns
  • OMI update

Giant Biogene IPO: The Bear Case

By Arun George

  • Giant Biogene Holding (GBH HK), a leading professional skin care product manufacturer, has started pre-marketing a US$500 million HKEx IPO.  
  • In Giant Biogene IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.  
  • The key elements of the bear case rest on a worrying performance of Collgene (the second flagship brand), an inexorable rise in S&M expenses and margins on a downward trajectory.

SillaJen Trade Resumption: Day Trading Setup Betting on Shooting Star Pattern

By Sanghyun Park

  • We should pay attention to two significant flows. INFLOW: Covering of those holding short positions & OUTFLOW: Rebalancing of local PASSIVEs that failed to remove SillaJen.
  • Osstem, which was in a similar situation, showed this shooting star pattern on its trade resumption day. Of course, this setup will work limitedly because SillaJen is shorting-restricted.
  • Nevertheless, SillaJen will likely show this pattern more dramatically in the shooting phase as its short interest is more than three times that of Osstem.

Rainbow Children’s Hospital (RAINBOW IN): Flying High Backed by Niche Focus and Business Recovery

By Tina Banerjee

  • Rainbow Children’s Hospital (RAINBOW IN) is India’s largest pediatric multi-specialty healthcare chain, operating 15 hospitals and 3 clinics in 6 cities, with a total bed capacity of 1,550+.
  • Due to its presence in the affluent cities of India, the company has superior ARPOB. With the normalization of business occupancy and outpatient volume improved significantly.   
  • The company plans to add 100 beds by the end of FY23. Higher occupancy and greater scale of operation are the biggest margin driver for the company.

Pre-IPO Giant Biogene – The Strength and the Concerns

By Xinyao (Criss) Wang

  • The strength about Giant Biogene is that the founders have R&D background, which helps build trust. Meanwhile, the financial performance was good, with three years of consistent high margins.
  • The sustainability of high-profit model will face pressure due to increasing competition. The establishment of long-term core competitiveness and second growth point is important. Complex related-party transaction is another concern.
  • Giant Biogene is in an industry that has a large potential for future growth in valuation. Its valuation should be lower than that of Bloomage and Imeik.

OMI update

By Newmoon Capital

  • It looks to me that the company is now run-rating to $500M of EBITDA, but it is possible that it is much lower depending on how Q3 turn out.

  • It was very possible that things were fine for the first 2 months of Q3 and then got really bad thereafter and so the run-rate EBITDA is actually much lower…but let’s just use $500M as our base case

  • Capex in this business is really closer to Opex. Apria is really a leasing/distribution business and so Capex is needed to keep the business running.

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Oct 12
0

Daily Brief Health Care: Osstem Implant, Giant Biogene Holding and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Clarifying KRX’s Confusing Heads-Up Designation System for KOSPI 200/KOSDAQ 150 Review
  • Giant Biogene IPO: The Bull Case

Clarifying KRX’s Confusing Heads-Up Designation System for KOSPI 200/KOSDAQ 150 Review

By Sanghyun Park

  • The KRX gives three heads-up types: WARNING (illegal trading), ADMINISTRATIVE (insolvency), & ATTENTION (inappropriate accounting). Those losing eligibility are ADMINISTRATIVE (KOSPI 200) and ADMINISTRATIVE + ATTENTION (KOSDAQ 150).
  • Those designated as WARNING keep the eligibility for KOSPI 200/KOSDAQ 150 unless delisting is decided. We can find these heads-up designations on the KRX website, which is available in English.
  • Osstem is currently an ATTENTION issue, so ineligible at this point. Knotus was designated as a WARNING issue in June and underwent a trade suspension. Nevertheless, it maintains eligibility.

Giant Biogene IPO: The Bull Case

By Arun George

  • Giant Biogene Holding (GBH HK), a leading professional skin care product manufacturer, has started pre-marketing a US$500 million HKEx IPO.  
  • According to Frost & Sullivan, Biogene was China’s second-largest professional skin treatment product company by retail sales in 2021.  
  • The key elements of the bull case rest on a large and growing addressable market, regulatory tailwinds, the core brand’s stellar performance and high cash generation. 

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Oct 11
0

Daily Brief Health Care: PureTech Health, Tokyo Stock Exchange Tokyo Price Index Topix, Wuxi Biologics, Giant Biogene Holding and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • PureTech Health (PRTC LN): Possible Combination with Nektar Is Just a Defensive Move
  • Recognizing Human Resource Strategy as a Management Issue and Creating the Policy Is the First Step
  • Wuxi Biologics (2269.HK) – Removed from UVL, but the Crisis Is Not Over
  • Giant Biogene Pre-IPO – PHIP Updates – Sales Growing Faster but so Have Marketing Spends

PureTech Health (PRTC LN): Possible Combination with Nektar Is Just a Defensive Move

By Tina Banerjee

  • PureTech Health (PRTC LN) has confirmed its possible merger with Nektar Therapeutics (NKTR US). Uncertainty regarding the actual offer has caused volatility to PureTech shares.
  • Nektar will be required, by not later than November 3, 2022, to announce a firm intention to make an offer for the company.
  • Nektar faced a big setback in its lead pipeline assets and is going through tight financial condition. We are not expecting a lucrative takeover offer for PureTech.

Recognizing Human Resource Strategy as a Management Issue and Creating the Policy Is the First Step

By Aki Matsumoto

  • Neither the company nor the employees have made sufficient investments, despite the fact that both sides see a gap between the skills they need and the reality.
  • Many companies either fail to link their management strategy to their human capital investment and human resource strategy, or don’t have a clear policy for human capital investment.
  • If investment in human resources is curbed in order to maintain short-term profit margins, this will lead to weighing on growth potential and profit margins in the medium-to-long term.

Wuxi Biologics (2269.HK) – Removed from UVL, but the Crisis Is Not Over

By Xinyao (Criss) Wang

  • Wuxi Biologics (2269 HK) has been removed from the “Unverified List”, but the crisis is not over. CXO’s valuation center could gradually volatile to the downside,during which there would be temporary rebounds.
  • Biotechnology of US and China has entered a higher level of game. As domestic CXO is deeply embedded in global supply chain, we won’t take any chances on WuXi Biologics.
  • We may face a long high-interest-rate environment after the Fed hikes,but the booming of US pharmaceutical IPOs is the underlying logic of CXO. We provided suggestions on CXO trading strategy.

Giant Biogene Pre-IPO – PHIP Updates – Sales Growing Faster but so Have Marketing Spends

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 talk about its PHIP updates.

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Oct 10
0

Daily Brief Health Care: Antengene, Dingdang Health Technology Group and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Antengene (6996 HK): First Drug Launched in Crowded Market of China Fails to Allure Investors
  • Dingdang Health Technology (9886HK)-Business Model Face Test; Hard to Run the Ecosystem Successfully

Antengene (6996 HK): First Drug Launched in Crowded Market of China Fails to Allure Investors

By Tina Banerjee

  • On May 13, Antengene (6996 HK) launched first drug, Xpovio in China as fourth-line treatment of relapsed/refractory multiple myeloma. Xpovio has also been launched in South Korea, Australia, and Singapore.
  • Xpovio reported revenue of RMB54 million in H1 2022. Antengene has guided for 2022 revenue of RMB180–200 million from Xpovio.
  • Late-Line MM therapy market is small and dominated by blockbuster drugs and low-cost generic versions of erstwhile blockbuster drugs, indicating muted growth potential for Xpovio in its current approval status.

Dingdang Health Technology (9886HK)-Business Model Face Test; Hard to Run the Ecosystem Successfully

By Xinyao (Criss) Wang

  • Dingdang has formed a system integrating front-end consultation, self-built pharmacies and back-end distribution. The “heavy asset model” leads to large liabilities, negative equity balance, cash flow pressure and poor profitability.
  • Dingdang lacks core competitiveness in introducing customer flow or rapidly expanding user base. Together with fierce competition, the gap between the Company and JD Health/Alibaba Health will become bigger.
  • It’s difficult to achieve high profits based on the business model when break-even is barely achieved. Dingdang has it hard to successfully run through its ecosystem.We’re bearish on the outlook.

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Oct 09
0

Daily Brief Health Care: Antengene and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Antengene (6996.HK) 22H1-Defective Business Model and Uncompetitive Pipeline; Bearish on the Outlook

Antengene (6996.HK) 22H1-Defective Business Model and Uncompetitive Pipeline; Bearish on the Outlook

By Xinyao (Criss) Wang

  • There’s an “insurmountable obstacle” to license-in business model. Antengene (6996 HK) has to go all the way to the end. Otherwise, Antengene won’t end up well.
  • Considering the pipeline quality/speed of clinical advancement/high cost of license-in/fierce competition/just APAC rights/limited cash balance, the biggest problem Antengene has to face is how to “survive this winter” .
  • Theoretically, Antengene is undervalued, so if willing to, investors could do short-term trade. However, due to the concerns, we are still bearish on Antengene’s outlook overall. 

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Oct 08
0

Daily Brief Health Care: Myovant Sciences, Wuxi Biologics, Jenscare Scientific and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Myovant Sciences (MYOV US): Rejects Sumitomo’s $2.5B Bid; Remains Open for Better Offer
  • Sumitomo/Myovant: Minorities Takeout
  • Shanghai/​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (7 October 2022)
  • Jenscare (健世科技) IPO Trading: Weak Demand and Share Concentration

Myovant Sciences (MYOV US): Rejects Sumitomo’s $2.5B Bid; Remains Open for Better Offer

By Tina Banerjee

  • Myovant Sciences (MYOV US) rejected $2.5 billion takeover offer from its largest shareholder, Sumitomo Dainippon Pharma Co (4506 JP), as the bid significantly undervalues the company.
  • Amid its tight cash situation, upcoming patent cliff, and ongoing late-stage clinical trials, Sumitomo is not expected to revise its offer upward.
  • New acquisition offer from marketing partner Pfizer is the most likely scenario. Even if the company does not receive any takeover offer, Myovant is capable of running its operating activities.

Sumitomo/Myovant: Minorities Takeout

By Jesus Rodriguez Aguilar

  • Sumitomo has offered $22.75/share in cash, 27% premium, for the 48% stake it doesn’t hold in Myovant, whose Board has rejected the offer and is open to negotiate.
  • The sell-side forecasts peak sales of over $2 billion for Orgovyx and Myfembree. Myovant also has a co-marketing deal with Pfizer could be worth $3.8 billion in milestones.
  • My TP is $22.84 (in line with consensus and the offer price). The market certainly believes that Sumitomo could be preparing a sweetened offer. Will Orgovyx become a blockbuster?

Shanghai/​​​​​​​​​​​​​​​Shenzhen Southbound Connect: Weekly Moves (7 October 2022)

By David Blennerhassett

Jenscare (健世科技) IPO Trading: Weak Demand and Share Concentration

By Ke Yan, CFA, FRM

  • Jenscare raised HKD 154.8m (USD 28m) from its global offering and will list on the Hong Kong Stock Exchange on Monday, October 10th.
  • In the previous note, we looked at the company’s business lines of medical devices for structural heart disease. We are of the view that the company’s valuation is unjustifiably rich.
  • In this note, we provide an update for the IPO before trading debut.

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Oct 07
0

Daily Brief Health Care: Tokyo Stock Exchange Tokyo Price Index Topix, Regeneron Pharmaceuticals and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Companies Should Communicate Their Human Resources Strategy Rather than Detailed Disclosure Rules
  • Regeneron Pharmaceuticals: The Libtayo Stake Acquisition & Other Driver

Companies Should Communicate Their Human Resources Strategy Rather than Detailed Disclosure Rules

By Aki Matsumoto

  • Companies had expected detailed rules, as with various disclosure documents, but was puzzled by government’s guidelines, which were conceptual and didn’t provide guidance on what to disclose and how much.
  • It is likely that the disclosure in annual securities reports, which are legal documents, will fill the space by disclosing items that are specifically identified and easy to show quantitatively.
  • Companies that cannot clearly explain their policies on investment in human capital and human resource strategies in their management strategies are unlikely to attract human resources.

Regeneron Pharmaceuticals: The Libtayo Stake Acquisition & Other Driver

By Baptista Research

  • Regeneron had a successful second quarter surpassing Wall Street expectations on all counts with noteworthy performance in every segment.
  • The company made considerable pipeline progress in addition to having good commercial execution, with 3 regulatory approvals, 2 accepted regulatory filings, and 1 positive Phase III readout.
  • After five years and more than 450,000 patients treated since its launch, Dupixent is still expanding at a good rate.

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