Daily Brief Health Care: Alfresa Holdings, Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. and more

In today’s briefing:

Alfresa Holdings (2784 JP): H1FY23 Review- Better-Than-Expected Performance; Outlook Is Positive
Zhangzhou Pientzehuang Pharmaceutical (600436.CH) – Disappointing Performance Is Just the Beginning

Alfresa Holdings (2784 JP): H1FY23 Review- Better-Than-Expected Performance; Outlook Is Positive

Alfresa Holdings (2784 JP) reported better-than-expected H1FY23 results, with sales growth of 3% to ¥1,332 billion, 2% ahead of guidance of ¥1,304 billion, mainly driven by pharmaceutical wholesaling business.
With a revenue growth of 4.3% y/y, pharmaceutical wholesaling business outpaced the broad market growth of 2.7% and improved its market share to 23.3% at the end of H1FY23.
The company has announced an interim dividend of ¥28 per share. Despite reporting encouraging H1FY23 performance, Alfresa has reiterated its FY23 guidance, implying accelerated growth in H2FY23.

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. (600436 CH)’s 22Q3 performance was disappointing because its strategy of “stabilizing” performance growth by raising prices has been ineffective.
Endogenous growth problem would finally be reflected in the decline of company’s valuation. We recommend to think about long-term logic from a broader perspective,not simply tracking performance of individual companies.
Pien Tze Huang’s valuation still has a lot of downward space. When the bubble bursts or its valuation is lower than Kweichow Moutai, it’s time to go long again.

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