In today’s briefing:
- Celltrion Group Merger Announcement in July & Oversold Post Disappointing Exclusion by OptumRX?
- Hugel: A Solid Turnaround Story With Resumption of Botulax Sales in China
- Hugel Inc (145020 KS): Expanding Global Presence Provides Solace Amid Patent Tussle with Competitor
- Guangzhou Baiyunshan Pharmaceutical (874.HK) – When Valuation Is Low Enough, Drawbacks Are Tolerable
Celltrion Group Merger Announcement in July & Oversold Post Disappointing Exclusion by OptumRX?
- Invest Chosun recently reported that the three Celltrion Group companies including Celltrion Inc, Celltrion Healthcare, and Celltrion Pharm are close to announcing a merger in July.
- Although Celltrion was not included this time as suppliers of Humira biosimilar products by OptumRX, there is still a potential for Cigna Express Scripts to include Celltrion’s product this year.
- We think Celltrion Inc and Celltrion Healthcare’s share prices are oversold.
Hugel: A Solid Turnaround Story With Resumption of Botulax Sales in China
- Hugel is a solid turnaround story. The recent resumption of its Botulax product sales in China is likely to boost the company’s sales and profits in 2023 and 2024.
- Despite this important catalyst, Hugel continues to face potential legal battle with Medytox over the botulinum toxin-related patent in the United States.
- The overall valuation on Hugel remains attractive and it is trading at EV/EBITDA of 7.1x and P/E of 18.2x in 2023.
Hugel Inc (145020 KS): Expanding Global Presence Provides Solace Amid Patent Tussle with Competitor
- Hugel Inc (145020 KS) is expected to start shipment of Botulax to China this month. Moreover, the company will launch its HA filler in China by middle of 2023.
- Hugel plans to focus on expanding into the global market in 2H23. The company began full-scale sales of Botulax in Australia in April and plans to enter Canada this year.
- Preliminary ruling regarding legal dispute in US is expected in November, while final ruling will come in March 2024. Hugel pushed back its US entry to 2025.
Guangzhou Baiyunshan Pharmaceutical (874.HK) – When Valuation Is Low Enough, Drawbacks Are Tolerable
- Baiyunshan is not a typical TCM company. As Great Commerce accounts for the majority of revenue, it clearly drags down the quality of total assets and growth expectation for valuation.
- As Jin Ge and Wang Lao Ji are facing different challenges, the overall growth/profitability of Baiyunshan is under pressure.Due to uncompetitive product line, Baiyunshan’s future growth appears to lack momentum.
- The valuation of Baiyunshan-A share is still expensive, but Baiyunshan-H share is attractive. After all, the future consumption recovery would be beneficial for boosting Baiyunshan’s valuation. Then, trading opportunity occurs.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
