In today’s briefing:
- KRX New Deal Index Rebalance Preview: Potential Changes as Review Period Ends Today
- Upgrading Health Care to Market Weight; Risk-Off Signals Suggest SPX and QQQ Pullback to Continue
- WuXi AppTec (2359.HK/603259.CH) 24H1- Backlog Looks Good but It May Not Bring a Performance Reversal
- AZTR: Initiation – Get Some Skin in the Game
- EVAX: Initiating Coverage: Using AI for Better Health Outcomes
- Actinver Research – Genomma Lab: 2Q24 – Strong results across the board (Earnings Review)
KRX New Deal Index Rebalance Preview: Potential Changes as Review Period Ends Today
- The review period for the September rebalance ends today, the changes will be announced in the first week of September and implemented at the close of trading on 12 September.
- There is at least one change expected for each of the Secondary Battery, Bio, Internet, Game and BBIG indices.
- The largest flows will be in Posco Future M, Ecopro BM, SK Biopharmaceuticals, Alteogen, Celltrion, SKC Co, Kakao Corp, Douzone Bizon, Krafton and Samsung Biologics.
Upgrading Health Care to Market Weight; Risk-Off Signals Suggest SPX and QQQ Pullback to Continue
- Breadth continues to improve and Russell 2000 (IWM) small-caps and the Dow remain bullish, all while the S&P 500 and Nasdaq 100 (QQQ) are going through a pullback/consolidation phase.
- Considering the Russell 2000 vs. S&P 500 ratio is reversing a 3.5-year downtrend, we expect this trend of small-cap outperformance to continue for months or longer.
- With new risk-off signals emerging, potential pullback zones we would look for include 5100-5191 on the S&P 500 and $443-$449 on the QQQ, expecting a low near the election.
WuXi AppTec (2359.HK/603259.CH) 24H1- Backlog Looks Good but It May Not Bring a Performance Reversal
- The message WuXi AppTec hopes to convey in 24H1 report is that the Company isn’t losing orders/customers due to BIOSECURE Act and from 2025 it will return to high growth.
- TIDES business growth is below expectations. Whether WuXi AppTec’s performance can be reversed is no longer solely depends on fundamentals/industry cycles, but on whether geopolitical risks can be fully resolved.
- Regardless of the outcome of 2024 presidential election, securing US supply chain is a already bipartisan consensus. If any Bill does pass in the future, valuation will plummet again.
AZTR: Initiation – Get Some Skin in the Game
- Azitra is developing genetically engineered bacteria for therapeutic use in dermatology.
- The company possesses a microbial library of 1,500 unique bacterial strains that are candidates for a variety of indications.
- Azitra’s lead candidate is ATR-12 for the rare disease Netherton Syndrome (NS).
EVAX: Initiating Coverage: Using AI for Better Health Outcomes
- EVAX is a clinical stage company that has proprietary AI models designed to more efficiently and more accurately target much-needed treatments.
- The company has two streams of possible revenue: from the treatments themselves and from the licensing of the AI technology.
- The company aims to be cash-flow neutral in 2024 and continues to develop relationships with major pharmaceutical companies, while also pushing treatments through the FDA approval process.
Actinver Research – Genomma Lab: 2Q24 – Strong results across the board (Earnings Review)
- Better-than-expected 2Q24 results throughout the P&L.
- While we had already forecasted healthy profitability ahead, we are raising our FY24E-25E estimates given the company’s anticipated path towards profitability targets.
- We continue to see Genomma with healthy brand power across most of its core categories and also expect previous headwinds, such as FX (at least in some regions) and performance in Argentina, to become neutral-to-positive ahead, while the company’s productivity initiatives remain with ample runway as they reached 41% of the FY27 P$1.8bn target.
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