Category

Healthcare

Mar 31
0

Health Care: Jiangsu Recbio Technology, Aurobindo Pharma, Sri Trang Gloves (Thailand) Public Company Limited and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • RecBio (江苏瑞科) IPO Trading: Fairly Valued for Vaccine Hype
  • Aurobindo-Veritaz Acquisition: No Justice
  • Sri Trang Gloves (Thailand) Public Company Limited (STGT TB): Short-Term Pain; Long-Term Gain

RecBio (江苏瑞科) IPO Trading: Fairly Valued for Vaccine Hype

By Ke Yan, CFA, FRM

  • Jiangsu RecBio raised HKD 672m (USD 86m) from its global offering and will list on the Hong Kong Stock Exchange on Thursday, March 31st.
  • In the previous note, we looked at the company’s core products, including its HPV portfolio and the COVID-19 vaccine. 
  • In this note, we provide an update for the IPO before trading debut.

Aurobindo-Veritaz Acquisition: No Justice

By Nitin Mangal

  • On Monday, Aurobindo Pharma (ARBP IN) had announced the acquisition of the branded generic business and certain assets of Veritaz Healthcare Limited for a cash consideration of INR 1.7 bn.
  • It should be known that Veritaz is a promoter group entity, which is why acquisition will fall within the scope of Related Party Transactions.
  • Being a promoter company and having had some red flags in the past such as negative net-worth, continuous loss making nature, etc. The cash consideration looks questionable.

Sri Trang Gloves (Thailand) Public Company Limited (STGT TB): Short-Term Pain; Long-Term Gain

By Tina Banerjee

  • Riding on COVID-driven demand boom, Sri Trang Gloves (Thailand) Public Company Limited (STGT TB) reported record high performance in 2021, which is not likely to continue in near-term.
  • However, post pandemic, gloves demand is expected to improve on the back of increased glove usage from emerging markets with low gloves consumption per capita and heightened hygiene awareness.
  • STGT shares have corrected 15% thus far in this year, providing a good buy on dip opportunity. Shares can be considered for the long-haul.

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Mar 30
0

Health Care: Apollo Hospitals Enterprise, CSPC Pharmaceutical Group and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • NIFTY Index Rebalance: Flows at the Close Today
  • CSPC Pharmaceutical Group (1093.HK) – Conservative About the Business Transformation Outlook

NIFTY Index Rebalance: Flows at the Close Today

By Brian Freitas

CSPC Pharmaceutical Group (1093.HK) – Conservative About the Business Transformation Outlook

By Xinyao (Criss) Wang

  • Due to the lack of differentiated and frontier enough target layout, the commercialization potential would be more easily questioned, with high uncertainty of having the next NBP level products.
  • CSPC has made easy money from a few large varieties/generic drugs for many years, but is destined to make the business transformation more difficult, because the “opportunity cost” is high.
  • CSPC’s products have lost their pricing power. Therefore, when its valuation is very low or the entire sector is moving upward, this stock could be traded due to positive momentum.

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Mar 29
0

Health Care: Hutchison China MediTech Ltd and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Hutchmed China Ltd (13.HK/HCM.US) – Big but Not Strong

Hutchmed China Ltd (13.HK/HCM.US) – Big but Not Strong

By Xinyao (Criss) Wang

  • For the three commercialized products (fruquintinib, surufatinib and savolitinib), they are facing challenges from different aspects. 
  • The lack of blockbuster products and promising targets indicates that Hutchmed’s current pipeline does not have core competitiveness, which means Hutchmed’s position in the industry is not in first echelon.
  • In fact, Li Ka-shing’s positioning and original intention for Hutchmed is not on innovative drugs. So, big but not strong has always been the pain point of the Company.

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Mar 28
0

Health Care: Prodia, Siloam International Hospitals, Akeso Biopharma Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Prodia (PRDA IJ) – Diagnosed for Growth
  • Siloam International Hospitals (SILO IJ) – Core Strength in Display
  • Akeso Biopharma Inc (9926.HK) – Caution Is Advised Until Sufficient Financing Is Secured

Prodia (PRDA IJ) – Diagnosed for Growth

By Angus Mackintosh

  • Prodia (PRDA IJ) released an exceptionally strong set of FY2021 results, driven partly by COVID testing but coupled by a pick-up in its core testing business and especially esoteric testing.
  • It continues to see increasing tests per visit with revenue per visit increasing at the same time. Its digital strategy is working well further driving growth through an omnichannel approach.
  • Prodia (PRDA IJ) continues to look dramatically undervalued versus its Indian diagnostic peers given its quality and growth prospects and remains our top Indonesian healthcare pick.

Siloam International Hospitals (SILO IJ) – Core Strength in Display

By Angus Mackintosh

  • Siloam International Hospitals (SILO IJ) held an analyst briefing recently to highlight the strong recovery of its base-case business, with very little contribution from COVID-related treatments by year-end.
  • Revenues on a monthly basis have hit record highs in December and January, with increased efficiencies and improving profitability due to cost controls.
  • Siloam International Hospitals (SILO IJ) remains an interesting recovery play but it has emerged even stronger from the pandemic and valuations are attractive versus peers and history. 

Akeso Biopharma Inc (9926.HK) – Caution Is Advised Until Sufficient Financing Is Secured

By Xinyao (Criss) Wang

  • Akeso has a very high starting point, and was regarded as the leader of domestic second-tier biotech companies. However, in current unfavorable market sentiment, it’s necessary to re-examine the Company.
  • In Akeso’s pipeline, there are some valuable and differentiated candidates, especially in the field of bispecific antibodies. Its R&D capability is also well recognized.
  • However, due to the rich pipeline, related clinical trials will drain money fast. So, investors are advised to be cautious until Akeso has ensured sustainable and stable cash flow.

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Mar 27
0

Health Care: PolyNovo Ltd and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • PolyNovo (PNV AU): Positive Momentum in U.S. Is Overshadowed by Cost Pressure and Lofty Valuation

PolyNovo (PNV AU): Positive Momentum in U.S. Is Overshadowed by Cost Pressure and Lofty Valuation

By Tina Banerjee

  • PolyNovo Ltd (PNV AU) develops, manufactures, and markets artificial dermal templates. The company has only one marketed product and 88% of total revenue comes from the U.S.
  • Although U.S. business is on high trajectory, the company’s drive to expand sales team and pipeline progress are putting pressure on the profitability, which do not justify the superior valuation.
  • I would like to wait for PolyNovo to become profitable post its investment for growth, start offering multiple differentiated products, with sizable presence in OUS markets, to have higher conviction.

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Mar 26
0

Health Care: Caplin Point Laboratories and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Caplin Point Labs: Forensic Analysis

Caplin Point Labs: Forensic Analysis

By Nitin Mangal

  • Caplin Point Laboratories (CLPL IN)  develops, produces, markets, and exports generic pharmaceutical formulations and branded products, including liquid and lyophilized injections, ophthalmic products, tablets, liquid orals, capsules, softgel capsules etc.
  • While Caplin has a healthy 5 year CAGR growth ~28% and strong margins, it however has slowed down recently. The return ratios, turnover and cash conversion have been heading southwards.
  • There have been some dubious accounting related to cash flows and asset quality, and few red-flags relating to few of the subsidiaries as well which should not be overlooked.

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Mar 25
0

Health Care: Beijing Tiantan Biological Products, CSPC Pharmaceutical Group and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Presentation for Impact of Russia/Ukraine War on Asian Markets-Tiantan Biological Products(600161CH)
  • CSPC Pharmaceutical (1093 HK): 2021 Results Review- Double-Digit Top-Line Growth, Driven By Oncology

Presentation for Impact of Russia/Ukraine War on Asian Markets-Tiantan Biological Products(600161CH)

By Xinyao (Criss) Wang

  • In the context of both the war and the pandemic, the blood products market would be a field of high-quality investment. 
  • Due to strict policy supervision, the number of plasma stations is the core competitiveness of enterprises in this industry, which basically determines the scale and outlook of blood products enterprises. 
  • With the background of state-owned enterprise and also having the most plasma stations among peers,Tiantan Biological Products (600161 CH) has an innate advantage over other competitors, with more certainty in long term.

CSPC Pharmaceutical (1093 HK): 2021 Results Review- Double-Digit Top-Line Growth, Driven By Oncology

By Tina Banerjee

  • CSPC Pharmaceutical Group (1093 HK) shares climbed nearly one-month highs after strong 2021 results and new drug approval. The company has recommended final dividend of HKD 0.10/share.  
  • 2021 revenue increased 12% y/y to RMB28 billion, mainly driven by the growth in the finished drug businesses. This has eased concern of CSPC’s revenue sensibility to pricing headwind.
  • The company is on track to launch more than 30 innovative and new-formulation drugs, and over 60 generic drugs in the next five years.

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Mar 24
0

Health Care: Abbvie Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • AbbVie Inc (ABBV US): Great Value Stock to Buy in Choppy Market

AbbVie Inc (ABBV US): Great Value Stock to Buy in Choppy Market

By Tina Banerjee

  • Abbvie Inc (ABBV US) shares remained rangebound in 2021, mainly due to Humira patent expiration overhang. Humira is the flagship drug of the company, accounting for 37% of total revenue.
  • Increasing label expansion of its two other drugs, Skyrizi and Rinvoq are now increasingly opening up new growth avenues for AbbVie. Together these drugs contributed 8% to total revenue.
  • Attractive valuation and healthy dividend yield make AbbVie a top value investment idea amid this turbulent time.

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Mar 23
0

Health Care: Top Glove Corp and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Pre-IPO Top Glove Corp – The Good Times Brought by COVID-19 Are Slipping Away

Pre-IPO Top Glove Corp – The Good Times Brought by COVID-19 Are Slipping Away

By Xinyao (Criss) Wang

  • Top Glove Corp (TOPG MK)’s strong performance was attributable to the unprecedented demand for glove products during the COVID-19 pandemic.
  • Judging from the past development, Top Glove is highly correlated with the global pandemic or virus both in terms of financial indicators and market value performance.
  • Therefore, although Top Glove would continue to be in the first echelon in this industry, investors should not expect too much from the Company’s performance after COVID-19 is under control.

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Mar 22
0

Health Care: Celltrion Inc, Arrail Group, Jiangsu Recbio Technology, PHC Holdings and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Celltrion and Celltrion Health Placement – Past Deals Have Been Mixed
  • Block Deal Sale of Celltrion & Celltrion Healthcare by ION Investment
  • Arrail Group (瑞尔集团) IPO Trading: Weak Demand, Rich Valuation
  • RecBio (江苏瑞科) IPO: Fairly Valued on Optimistic Industry Forecast
  • PHC Holdings (6523 JP): Eyeing a Bigger Pie of Global Diabetes Management Solution

Celltrion and Celltrion Health Placement – Past Deals Have Been Mixed

By Sumeet Singh

Block Deal Sale of Celltrion & Celltrion Healthcare by ION Investment

By Douglas Kim

  • After the market close today, it was announced that ION Investment will partially sell its stakes in Celltrion and Celltrion Healthcare for about 560 billion won in a block deal.
  • The block deal price ranges are at 6 to 9 percent discount to current prices of Celltrion and Celltrion Healthcare.
  • We would take this take this deal due to settling of the accounting issue, more reasonable valuations, and sizeable block deal discount range. 

Arrail Group (瑞尔集团) IPO Trading: Weak Demand, Rich Valuation

By Ke Yan, CFA, FRM

  • Arrail Group raised HKD 589.9 million (USD 75m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, Mar 22nd.
  • In our previous notes, we looked at the company’s background, its operation, its financials, and its expansion plan, compared its key metrics with peers and provided thoughts on valuation.
  • In this note, we look at the updates since our last note and prior to debut.

RecBio (江苏瑞科) IPO: Fairly Valued on Optimistic Industry Forecast

By Ke Yan, CFA, FRM

  • RecBio is an innovative vaccine company with a focus on HPV vaccines. The company started book building to raise up to USD 98m via a Hong Kong listing.
  • In the previous note, we looked at the company’s core products, including its HPV portfolio and the COVID-19 vaccine and the valuation.
  • In this note, we provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.

PHC Holdings (6523 JP): Eyeing a Bigger Pie of Global Diabetes Management Solution

By Tina Banerjee

  • PHC Holdings (6523 JP) is a diversified healthcare company, which serves ~$25 billion broader end-market, of which global glucose monitoring is the largest end-market.
  • The company’s diabetes management business is the highest margin earning segment and is poised to grow through expanding presence in continuous glucose monitoring system.
  • PHC can be an early investment idea as a passive play on the fastest growing segment of the global diabetes management segment ahead of its global launch of next-generation CGM.

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