In today’s briefing:
- Asian Dividend Gems: Chow Tai Fook Jewellery
- Berli Jucker (BJC TB) – Big C’s Tourism Factor
- China Healthcare Weekly (July.7) – MNCs’ Next Move In Licensing Deals, Topchoice, Junshi’s Trouble
- Clinuvel Pharmaceuticals (CUV AU): Positive Clinical Trial Result; Base Business Going Strong
Asian Dividend Gems: Chow Tai Fook Jewellery
- Chow Tai Fook Jewellery’s shares are down 28.2% YTD, sharply underperforming the Hang Seng Index which is up 6% in the same period. We believe this divergence is excessive.
- Chow Tai Fook’s dividend yield averaged 4.8% from FY20 to FY24. Its annual dividend payout averaged 107% in the same period.
- Chai Tai Fook is currently trading at attractive valuations. It is trading at P/E of 10.1x, EV/EBITDA of 7.5x, and P/B of 2.9x based on FY25 consensus earnings estimates.
Berli Jucker (BJC TB) – Big C’s Tourism Factor
- Berli Jucker’s modern trade supply chain under Big C continues to benefit from the tourism recovery, with 25 dedicated tourism stores and another 35 secondary tourism stores.
- Tourism stores carry a slightly different mix of SKUs versus regular stores, which generate higher margins. Big C continues to expand its store network and margins are moving upwards.
- Berli Jucker provides direct exposure to Big C but its other divisions including packaging and consumer supply chain provide exposure to both Thailand and Vietnam. Valuations are attractive versus history.
China Healthcare Weekly (July.7) – MNCs’ Next Move In Licensing Deals, Topchoice, Junshi’s Trouble
- For all licensing cooperation with MNCs, we recommend that investors wait to see what MNCs’ next move is before deciding whether the cooperation is really promising.
- Topchoice showed good business growth in 24Q2. Our biggest concern for Topchoice is that the unit price per customer may further decrease in the future, thereby affecting revenue/profit growth.
- Junshi’s sales growth picked up in 24Q1, but concerns on Junshi persist. We don’t think Junshi is undervalued and its valuation should be lower than that of peers.
Clinuvel Pharmaceuticals (CUV AU): Positive Clinical Trial Result; Base Business Going Strong
- Clinuvel Pharmaceuticals (CUV AU) released positive update from its CUV151 study, which was evaluating the DNA-repair capacity of afamelanotide on skin of healthy volunteers exposed to UV radiation.
- Riding on high trajectory of lead therapy, Scenesse, thanks to the prescriber network growth, treatment demand, and number of prescriptions, Clinuvel has been consistently reporting profitable revenue growth.
- Greater patient outreach to be facilitated by more specialty centers able to administer Scenesse in the U.S., expanding geographic footprint, and future label expansions are future growth engines.
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