In today’s briefing:
- China Healthcare Weekly (Sep.22) – Medical Device VBP, Restore Optimism on Healthcare, Biokin Pharma
- Sunac Services (1516 HK): Positive Development From Debt Restructuring Of Parent Company
- MediaTek (2454.TT): Gaining Google TPU V7 Project Entirely Could Be a Misconception
- 2Q Follow-Up – D. Western Therapeutics Institute (DWTI) (4576 JP)
- China’s New List Of D-SIBs’ Capital Buffer Is Wearing Thin For Some
- Hyatt Hotels Corporation: Key Initiatives to Boost Loyalty and Attract New Guests! – Major Drivers
- Splunk and $28B Mega Deal: Will Cisco Overpay For San Francisco-Based Software Company?
- Steelcase, Inc. – Early 3Q Order Flow Rebounding; Raising Estimates
- IPG Photonics Corporation: The E-Mobility Surge Pushing the Revenue Boundaries! – Major Drivers
- Teleflex Incorporated: Strategies Unveiled to Conquer Approvals and Surgeon Training! – Major Drivers
China Healthcare Weekly (Sep.22) – Medical Device VBP, Restore Optimism on Healthcare, Biokin Pharma
- The national centralized procurement of high-value medical consumables such as intraocular lens (IOL) and sports medicine medical consumables is about to begin. We listed the companies that could be affected.
- The instability of policies seems to be a consensus among investors regarding China healthcare. However, if truly understand the logic behind policy changes and industry shifts, investors will maintain optimism.
- We analyzed the key points of Biokin. Its valuation is ridiculously high considering the current pipeline situation and commercialization outlook. We think the bubble will eventually burst (e.g. 50% downside).
Sunac Services (1516 HK): Positive Development From Debt Restructuring Of Parent Company
- On September 21, a debt restructuring agreement was reached with debt holders of Sunac China, in which part of the agreement included Sunac Services shares.
- The debt restructuring for Sunac China should provide a positive feedback loop to the sentiment and fundamentals of Sunac Services.
- The core property management business (86% of sales) grew 8% yoy in 1H23, with total gross floor area growing by 12% yoy.
MediaTek (2454.TT): Gaining Google TPU V7 Project Entirely Could Be a Misconception
- There is a misconception that “MediaTek is gaining the Google TPU v7 project entirely in 2024-25F.”
- Transsion Holding is placing a new order with MediaTek in 4Q23F, which is larger than ~25mn and has the lowest ASP.
- Our current view remains bearish on smartphone demand for 2H23F.
2Q Follow-Up – D. Western Therapeutics Institute (DWTI) (4576 JP)
- Major milestones with high expectations coming in the next 2-3 years: 1) Phase IIb US trials for H-1337 as “first choice as a second-line Glaucoma drug” for patients who do not respond to PGs, 2) 2023 application, 2024 approval and 2025 launch of DW-1002 in Japan, 2023 application/approval/launch in China, as well as expedited development of combination formula MembraneBlue-DualR (DW-1002 + trypan blue) in the US [NEW], 3) 2023 approval and subsequent 2024 launch of DW-5LBT lidocaine patch for treatment of neuropathic pain in the US, and 4) clinical trials in 2024 in Japan and application for approval in 2025 of regenerative cell medicine DWR-2206 [NEW].
- Coming into the 3Q, DWTI announced 2 updates not included in its “Business Plan and Growth Potential.”
- On 7/13, DWTI announced the development plan for regenerative cell medicine DWR-2206, aiming to submit a notification of clinical trial at the end of 2023, start clinical trials in 2024, and submit application for approval (NDA) in 2025 (using the expedited conditional and term-limited approval system for regenerative therapeutics).
China’s New List Of D-SIBs’ Capital Buffer Is Wearing Thin For Some
- PBOC and NAFR included Bank of Nanjing in its latest D-SIBs list, increasing the total D-SIBs to 20
- 13 benchmarks were used to assess the D-SIBs using 1H23 data
- All D-SIBs fulfilled their additional capital requirements as of 1H23, but the buffer is wearing thin for some especially in view of the difficult economic environment
Hyatt Hotels Corporation: Key Initiatives to Boost Loyalty and Attract New Guests! – Major Drivers
- Hyatt Hotels Corporation’s results were a major disappointment as the company failed to meet Wall Street’s revenue and earnings expectations.
- The ongoing transformation of Hyatt is gaining momentum, with second-quarter results reinforcing their confidence in executing the strategy outlined during the Investor Day in May.
- Hyatt has set ambitious targets, aiming to achieve $750 million in free cash flow and an 80% asset-light earnings mix by 2025.
Splunk and $28B Mega Deal: Will Cisco Overpay For San Francisco-Based Software Company?
- Splunk shares outperformed in 2023 and rose ~69% as total ARR exceeded $4B, operating loss narrowed, and FCF margin improved. The company executed well to drive long-term durable growth.
- Over the past 2 years, Splunk transformed itself into a cloud company. In 2022, WSJ reported that Cisco made a $20B+ takeover offer. However, no deal was on the table.
- Following M&A rumors, the company’s cloud transition, and strong fundamentals, Cisco offered a $157 per share to acquire Splunk in a $28B mega all-cash deal on September 21, 2023.
Steelcase, Inc. – Early 3Q Order Flow Rebounding; Raising Estimates
We are raising our estimates following an upbeat conference call and follow-up with SCS management.
Our adjusted 3QFY24 estimate, now at $0.25, is up from $0.21 and at the midpoint of guidance.
Full-year FY24 guidance is now $0.80-0.90. Our new FY24 EPS estimate is $0.88, up from $0.71 pre-release and near the top end of guidance.
IPG Photonics Corporation: The E-Mobility Surge Pushing the Revenue Boundaries! – Major Drivers
- IPG Photonics Corporation delivered a mixed set of results for the previous quarter, with revenues below the analyst consensus.
- They achieved substantial revenue growth in the welding and cleaning applications, led by robust e-mobility and handheld welding solution sales.
- Additionally, 3D printing and solar cell manufacturing applications have seen increased revenue as a result of better investments in these industries.
Teleflex Incorporated: Strategies Unveiled to Conquer Approvals and Surgeon Training! – Major Drivers
- Teleflex managed to exceed analyst expectations in terms of revenue as well as earnings.
- Adjusted earnings per share for the same period were $3.41, reflecting a 0.6% increase compared to the previous year.
- The company observed a continued stabilization in hospital staffing, positively affecting second-quarter revenue growth, particularly in products tied to hospital settings.
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