In today’s briefing:
- China Healthcare Weekly (Oct.20)-Investment Returns on Weight Loss/AD,GLP-1 Gene Therapy,AIM Vaccine
- Challenge Is to Simultaneously Reduce Cash on Hand and Achieve Profitability over Cost of Capital
China Healthcare Weekly (Oct.20)-Investment Returns on Weight Loss/AD,GLP-1 Gene Therapy,AIM Vaccine
- Weight loss and Alzheimer’s disease (AD) have been ranked among the top indications in the pharmaceutical history and are undeniable opportunities, but they are expected to generate different investment returns.
- We have noticed that some companies have started developing GLP-1 gene therapy. We would be cautious about this.
- Without strong fundamentals but is eager to go public on A-share market, AIM Vaccine (6660 HK) seems more enthusiastic about capital operations to make quick money.We consider this company risky.
Challenge Is to Simultaneously Reduce Cash on Hand and Achieve Profitability over Cost of Capital
- Managers self-analyze the factors that lead to P/B of below 1x, as companies fail to appreciate their growth potential and to ensure profitability in excess of their cost of capital.
- This seems to be dilemma in that companies’ failure to realize sufficient profitability, along with insufficient growth investments, prevents them from sharing the image of corporate value growth with investors.
- Managers believe that the first step is to improve ROE by reshuffling business portfolios and promoting profitability improvement, but reducing excess cash and increasing shareholder returns should be pursued simultaneously.
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