Healthcare

MicroPort’s net loss widened according to its profit warning. The negative impact of centralized procurement is already being shown. We analyzed the situation of its different business segments.
After continuous M&A, Microport Scientific (853 HK) could face cash flow pressure in this unfriendly financing environment.
Due to MicroPort’s development mode, the market value of its subsidiaries could be higher than the parent company. Our view is that the subsidiaries would be a better investment.

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Mar 20

Health Care: Oneness Biotech and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Oneness Biotech (4743 TT): Worth of Attention Ahead of Upcoming Key Milestones

Oneness Biotech (4743 TT): Worth of Attention Ahead of Upcoming Key Milestones

Oneness Biotech (4743 TT)’s approved drug in Taiwan, Fespixon is the world’s first drug to treat diabetic foot ulcers with superiority in complete wound closure to the standard of care.
Fespixon is under review in China, and is under multiple NDA submissions to Asian health authorities. The U.S. phase 3 study is expected to be completed in H1 2023.
Key milestones are expected from two other late-stage pipeline drug candidates, FB825 and FB704A in 2022 and beyond.

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Mar 19

Health Care: Eubiologics and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

EuBiologics (206650 KS): Base Business Recovery; COVID Vaccine Undergoing Phase 3 Trial

EuBiologics (206650 KS): Base Business Recovery; COVID Vaccine Undergoing Phase 3 Trial

Eubiologics (206650 KS) signed contract with UNICEF to deliver 67.1 million doses of its oral cholera vaccine, Euvichol-Plus, through 2023. Euvichol-Plus is the cash cow for the company.
The company’s COVID-19 vaccine EuCorVac-19 is in phase 3 trial and is one of the early movers among Korean vaccine manufacturers in terms of clinical timeline.
EuBiologics has successfully diversified portfolio and its pipeline of non-cholera vaccine and non-vaccine product candidates are also progressing, thereby lending long-term visibility beyond COVID.

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Mar 18

Health Care: Jiangsu Recbio Technology and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

RecBio (江苏瑞科) Pre-IPO: Thoughts on Valuation

RecBio (江苏瑞科) Pre-IPO: Thoughts on Valuation

By Ke Yan, CFA, FRM

RecBio is an innovative vaccine company with a focus on HPV vaccines. The company is pre-marketing its USD 100-200 million Hong Kong listing.
In the previous note, we looked at the company’s core products, including its HPV portfolio and the COVID-19 vaccine. Though not impressive, it does provide exposure to China HPV market.
In this insight, we provide our thoughts on valuation, including key assumptions.

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By Shifara Samsudeen, ACMA, CGMA

Mar 17

Health Care: Ping An Healthcare and Technology Company Limited, Hanmi Science, CanSino Biologics Inc, SK Biopharmaceuticals Co Ltd, Bangkok Chain Hospital and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?
A Long-Term M&A Battle Brewing Among the 3 Heirs of Hanmi Pharm Group?
CanSino Biologics (6185.HK/688185.CH) – Still Have Investment Value
SK Biopharmaceuticals (326030 KS): Highest Performance in 2021; Pipeline Progress Entails Visibility
BCH: Good Value but Limited Room for Growth

Ping An Health 2021 Results: Is Strategy 2.0 Continuum as Successful as Claimed?

Ping An Health (SEHK:1833) reported 2H2021 earnings on Tuesday after market close. The company’s revenue declined by 14.7% YoY with a 7.5% decline in gross margins.
On a full-year basis, 2021 revenue grew by 6.8% despite a 3.9% decline in gross margins. We are concerned on the slowdown of revenue growth and margin decline.
The company is trading at a significant discount to historical median and peers. Withou clarity regarding segments, we think it is too soon to take a completely negative stance.

A Long-Term M&A Battle Brewing Among the 3 Heirs of Hanmi Pharm Group?

By Douglas Kim

There is an interesting situation brewing at the Hanmi Pharm Group, which is one of the largest pharmaceutical companies in Korea.
On 16 March, it was reported that Hanmi Pharm decided not to raise the agenda for re-appointment of CEO Lim Jong Yoon as an inside director at the Hanmi Science.
In terms of trading, there appears to be more upside in Hanmi Science (008930 KS) as compared to Hanmi Pharm (128940 KS) in the next several months.

CanSino Biologics (6185.HK/688185.CH) – Still Have Investment Value

The main performance contributor in 2021 was CanSino’s COVID-19 vaccine.However, the high vaccination rates, new alternatives (e.g. oral COVID-19 pills) and concerns on capacity make the future sales highly uncertain.
The commercialization performance of MCV2 and MCV4 would largely determine when CanSino could truly shift to relying on conventional vaccine business rather than COVID-19 vaccine to contribute performance.
Objectively speaking, CanSino’s pipeline, R&D capability and technology platforms do have advantages and investment value.

SK Biopharmaceuticals (326030 KS): Highest Performance in 2021; Pipeline Progress Entails Visibility

By Pi Securities PCL, Thailand

SK Biopharmaceuticals Co Ltd (326030 KS) surpassed KRW400 billion sales last year, the highest since inception. The company targets more than doubling sales this year, through global expansion of cenobamate.
The company is expected to launch its third commercial drug, carisbamate (currently in phase 3 trial) in global market in 2025.
On the back of robust 2021 financial performance, SK Biopharmaceuticals shares have recovered and reached to two-month high, thereby offering an attractive and confirming buying opportunity.

BCH: Good Value but Limited Room for Growth

Maintain HOLD rating with a TP of B21.00, based on 14.36xPE’22E, which is close to -2SD of 3-years trading average. Despite expected 43% drop in 22E earnings,rising Omicron cases coupled
Its 4Q21 earnings was at Bt2.5bn (+791% YoY,-14%QoQ), suppressed QoQ upon weak revenue growth, caused by lower Covid-related revenue.
BCH’s 2021 earnings was at Bt6.8bn, grew 454%YoY, attributed to solid revenue growth (+139%YoY) and margin expansion (+17ppts), upon higher Covid-contribution.

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Mar 16

Health Care: Mani Inc, Cipla Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Mani (7730 JP): Profit to Decline in Q2; China’s Worsening COVID Outbreak to Weigh on H2 Performance
Cipla: Rigor on Portfolio Execution and Cash Generation Initiatives to Support Growth

Mani (7730 JP): Profit to Decline in Q2; China’s Worsening COVID Outbreak to Weigh on H2 Performance

Mani Inc (7730 JP) shares have plunged 19% since we have published our bearish insight on the company on January 13.
FY22 guidance implies 22% and 56%, y/y, decline in operating profit and profit attributable to owners of parent, respectively, in Q2FY22.
We are cautious on H2FY22 recovery and financial performance of Mani due to worsening COVID-19 condition in China, which is one of its major markets.

Cipla: Rigor on Portfolio Execution and Cash Generation Initiatives to Support Growth

By Axis Direct

We initiate coverage on CIPLA Ltd (CIPLA) with a BUY rating and a target price of Rs 1,200 (PE 24x for FY24E EPS), implying an upside of 15.5% from the current levels.
CIPLA continuous to focus on the demand levers in the chronic and acute therapies and complex products in its existing as well as pipeline portfolio
The company’s active advancement of innovative consumer-centric products is expected to accelerate the augmentation of the global consumer wellness franchise

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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Mar 15

Health Care: Virtus Health, Topchoice Medical, Paradigm Biopharmaceuticals and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Virtus Enters Into Firm Deal With CapVest
CapVest Inches past BGH in a Heated Takeover Battle for Virtus
Topchoice Medical (600763.CH) – The Logic Changes
Paradigm Biopharmaceuticals (PAR AU): Concerns Persist Amid Deteriorating Financials

Virtus Enters Into Firm Deal With CapVest

By David Blennerhassett

Virtus Health (VRT AU) gives the nod to CapVest as the latter bumps to $8.25/share – less dividends – by way of a Scheme
CapVest will also make a concurrent off-market takeover Offer at $8.10, less dividends. This Offer can be triggered if the first Offer fails, and would only require 50.1% shareholder approval.
Trading one spread below CapVest’s firm Scheme terms. Back in BGH’s court. Again.

CapVest Inches past BGH in a Heated Takeover Battle for Virtus

By Arun George

CapVest’s binding offer is A$8.25 via a scheme or A$8.10 via an off-market takeover. The scheme offer is a 5.8% premium to its previous scheme offer of A$7.80 per share.
Rival bidder BGH lobbed a revised non-binding offer of A$8.10 per share after market close on 10 March. The Board will consider any further improved competing offer.
BGH (19.99% stake) previously stated that it will vote against a CapVest scheme and will not accept any takeover offer. Another round of bidding is a possibility.

Topchoice Medical (600763.CH) – The Logic Changes

Policy risk is the biggest uncertainty for domestic medical service sector, without any overseas revenue to “hedge” such risk.
The market places great hope on Topchoice to become a cross-regional enterprise with high growth sustainability. Without a reliable and replicable expansion model, the high valuation is not logical.
Therefore, our view is that the Company’s investment logic has been shaken. Topchoice Medical (600763 CH) could be a short-term trade, but not long-term hold.

Paradigm Biopharmaceuticals (PAR AU): Concerns Persist Amid Deteriorating Financials

Paradigm Biopharmaceuticals (PAR AU) shares plunged 32% since we published our bearish insight on the company on January 11. Shares are trading near their pandemic lows.
Our negative view on the company due to the inherent safety proposition of lead drug and financial uncertainty remain intact. Insider buying led to the recent uptick in share prices.
Amid uncertain global market condition and general market apathy toward biotechnology companies, we will not be an investor of Paradigm Biopharmaceuticals despite its recent sell-down.

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Mar 14

Health Care: SK Bioscience, Jiangsu Hengrui Medicine and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

SK Bioscience (302440 KS): An Attractive Pure-Play on Vaccines- Both COVID and Non-COVID
Jiangsu Hengrui Medicine (600276.CH) – Here’s when Hengrui May Recover

SK Bioscience (302440 KS): An Attractive Pure-Play on Vaccines- Both COVID and Non-COVID

SK Bioscience (302440 KS) markets four in-house products in Korea, including influenza, shingles, and chicken pox vaccines. The company has partnerships with global companies for the production of COVID-19 vaccines.
SK Bioscience has started shipment of Novavax’ COVID-19 vaccine, while its own vaccine is in phase 3 trial. With ~15% vaccination in low-income countries, demand for vaccine is still high.
SK Bioscience has a rich pipeline, with four promising blockbuster candidates for the global market. This entails strong revenue visibility in post-COVID era.

Jiangsu Hengrui Medicine (600276.CH) – Here’s when Hengrui May Recover

Entering 2022, Hengrui’s stock price has gone through continuous correction. The market is not that optimistic about the performance of Hengrui in 2021 full year and 2021Q4.
We analyzed the possible future development trajectory of Hengrui’s performance, which would be up and down due to VBP and NRDL negotiation. Investors could get prepared in advance.
Due to Hengrui’s “DNA” and development mode, it could have “stable growth” after getting out of the difficult situation, but hard to achieve “explosive growth or significant return”.

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Mar 13

Health Care: Celltrion Inc and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Celltrion Inc: Acquitted of Intentional Accounting Fraud by the Korean Financial Authorities

Celltrion Inc: Acquitted of Intentional Accounting Fraud by the Korean Financial Authorities

By Douglas Kim

On 11 March 2022, the Celltrion Group was acquitted of intentional accounting fraud by the Korean financial authorities after more than four years of investigation.
This is likely to result in a major positive boost on the shares of Celltrion Inc, Celltrion Healthcare, and Celltrion Pharm in the next several weeks.
We note that the decision about the Celltrion Group was announced on 11 March, one day after Yoon Suk-Yeol was declared to become the next President of South Korea.

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Mar 12

Health Care: Ajanta Pharma, Dr. Reddy’s Laboratories and more

By Smartkarma Daily Briefs | Daily Briefs, Healthcare

In today’s briefing:

Ajanta Pharma: Forensic Analysis
Dr. Reddy’s Laboratories (DRRD IN): India Business Is the Only Bright Spot Amid Many Headwinds

Ajanta Pharma: Forensic Analysis

By Nitin Mangal

Ajanta Pharma (AJP IN) together with its subsidiaries, develops, manufactures, and markets finished dosages and markets it both domestic and internationally.
Although the company has been profitable, it does exhibit several concerns on the balance sheet side and few on the governance end.
Major setbacks include elongated cash conversion cycle, declining returns and efficiency ratios, doubts on effectiveness of R&D, and capital allocation woes.

Dr. Reddy’s Laboratories (DRRD IN): India Business Is the Only Bright Spot Amid Many Headwinds

Dr. Reddy’s Laboratories (DRRD IN) is outperforming the domestic pharma industry and aims to expand its market share. Currently, India business contributes 19% of revenue.
The company’s largest revenue segment, the U.S. generic business continues to see pricing pressure. It plans to launch new products, including complex generics to combat the impact of price erosion.
Dr. Reddy also has around 13% revenue exposure to Russia and other CIS countries. Sharp depreciation of Russian currency will negatively impact revenue from the region.

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