Daily Brief Health Care: China Traditional Chinese Medicine, Legend Biotech Corp, China Shineway Pharmaceutical, Hisamitsu Pharmaceutical Co, Sagility India, Avita Medical and more

• China Traditional Chinese Medicine (570 HK)’s monthly update provides ammunition to both the bulls and bears. Since falling on no news on 26 June, the spread has widened to 31.8%. 
• The bull view is that while the timelines are delayed, the privatisation remains on track as the update shows ongoing progress in satisfying the pre-condition. 
• The bear view is that progress remains glacial, as the consortium wants to withdraw from a binding offer by failing to satisfy the pre-condition before the long stop date.

• Legend Biotech Corp (LEGN US) shares increased 12% on Friday as a Street Insider report claimed it received takeover interest and hired Centerview Partners to help review the offer.
• Genscript Biotech (1548 HK), the largest shareholder, shares rose 25%. Genscript responsded that it is not aware of any reasons for these share price movements and any inside information.
• The chances for an offer are low as the offeror would face several hurdles. Nevertheless, without an offer, the upcoming CARVYKTI commercial production in 2H24 will support the share price.   

• Three business segments of Shineway showed negative YoY growth in 24Q1. 24Q2 performance could remain sluggish. We’re not optimistic about the 24H1 results due to the high base in 23H1.
• It is expected that Shineway’s growth in 24H2 would pick up. If revenue growth of Shineway in 2024 full-year could be double-digit (e.g. 10-15% YoY), it is already good.
• Shineway is undervalued. It has sufficient cash (cash balance of RMB5.9 billion by 2023) and is willing to distribute dividends (usually twice a year). Shineway is suitable for long-term holding.

• Hisamitsu Pharmaceutical Co (4530 JP) has reported double-digit growth in revenue and net profit in Q1FY25. However, operating profit decreased 5% YoY due to higher expenses.  
• Topline growth was mainly driven by Salonpas, which was named the world’s no. 1 OTC topical analgesic patch band for the eighth consecutive year.  
• The company reiterated FY25 guidance of 7% revenue growth and low double-digit operating and net profit growth, as an increase in operating profit is expected for the full-year as planned.

• Sagility India (2058883D IN) is looking to raise up to US$500m in its upcoming India IPO. The deal will be run by ICICI Securities, IIFL Securities, Jefferies and JP Morgan. 
• Sagility India is a pure-play healthcare focused solutions and services provider to Payers (U.S. health insurance companies), and Providers (primarily hospitals, physicians, and diagnostic and medical devices companies). 
• It supports the core business operations of both Payer and Provider clients. 

• AVITA Medical has a 75% market share in the burns market, surpassing competitors
• The company’s recent financial performance has been strong, with an 84% increase in revenue in 2020
• AVITA Medical has significant potential for growth and value creation in the future, given its position in the burns industry and growing market opportunity

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.