In today’s briefing:
- Celltrion Pharm (068760 KS) Looks Frothy
- Quick Ideas #6
- Pre-IPO QuantumPharm – Good Stories May Not Be Backed up by Performance
- Upgrading Staples and Health Care to Market Weight; Shift to Value; Failed Breakouts for ARKK, IPO
- HEC Pharma (1558 HK): Strong Performance to Continue as Flu Activity Is On Rise In China
Celltrion Pharm (068760 KS) Looks Frothy
- After biopharmaceuticals developer and producer Celltrion Inc (068270 KS) recently completed its merger with Celltrion Healthcare (091990 KS), Celltrion Pharm (068760 KS) came (more) into focus.
- Pharma is now up ~37% since Inc and Healthcare merged.
- That’s quite a lot of expectation baked in. Probably too much.
Quick Ideas #6
- First of all, happy new year to all my readers! May 2024 bring market beating returns for everyone.
- Again I managed to underperform my blog stock picks by concentrating in the wrong stocks.
- Although I still ended up over 20% for the year, it was disappointing considering I was getting close to 30% in July.
Pre-IPO QuantumPharm – Good Stories May Not Be Backed up by Performance
- The essential difference between QuantumPharm and InSilico in terms of business models is that InSilico is an end-to-end generative AI-driven biotech but QuantumPharm is more of a platform-based service provider.
- It’s difficult for QuantumPharm to achieve significant increase in revenue scale in short time,because the service fee amount is usually not large, and it takes time to accumulate order volume.
- If there is no substantial performance contribution, these good stories would not bring about a sustained leap in valuation. QuantumPharm’s valuation in last funding round before IPO is too expensive.
Upgrading Staples and Health Care to Market Weight; Shift to Value; Failed Breakouts for ARKK, IPO
- As the saying goes, “sector rotation is the lifeblood of a bull market.” That appears to be exactly what is going on as we kick off 2024.
- Leadership areas that have significantly outperformed since the October 2023 lows are starting to pull back rather hard — and on above average volume (XLK, SMH, IGV, ARKK, IPO, BITQ)
- Other Sectors are picking up the slack, namely Health Care (XLV), Staples (XLP), Utilities (XLU), Energy (XLE), Financials (XLF), and Real Estate (XLRE). Shift exposure toward value and defensives
HEC Pharma (1558 HK): Strong Performance to Continue as Flu Activity Is On Rise In China
- Yichang HEC Changjiang Pharma (1558 HK) is set to benefit from the recent upsurge in respiratory illness in China. The company commands ~90% share of anti-flu drug market in China.
- In 1H23, HEC Pharma’s revenue jumped 148% YoY to RMB3.2B, mainly due to spiking flu cases in China. A strong flu season in 4Q23, should boost H2 performance.
- Despite a 43% rally in HEC Pharma share price over the last six months, the shares are trading at forward P/E of just 4.8x.
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