In today’s briefing:
- MSCI Feb 2023 QCIR: Mostly In-Line; Couple of Surprises
- Haw Par Corp Is Still Trading Cheap
- Mankind Pharma Pre-IPO – Thoughts on Valuations
- Shanghai Haohai Biological Technology (688366.CH/6826.HK)- Disappointing Earnings and Gloomy Outlook
- Vertex Pharmaceuticals (VRTX US): Mixed 4Q22 Results; Upbeat 2023 Guidance
MSCI Feb 2023 QCIR: Mostly In-Line; Couple of Surprises
- MSCI has announced the changes for the February QCIR. For Asia Pacific, there are 20 adds and 14 deletes for the MSCI Standard Index with the most changes in China.
- There are no surprises on the adds or deletes. However, there are a couple of stocks that are surprises on not being added to or deleted from the index.
- The largest impact will be on Ebos Group Ltd (EBO NZ) – though there will be pre-positioning on the stock.
Haw Par Corp Is Still Trading Cheap
- Last November I highlighted Haw Par Corp (HPAR SP)‘s multi-year trough levels on an implied stub valuation, and on an HPAR/UOB (UOB SP) ratio.
- That trade has panned out well as the ratio steadily increased. But it remains below the 200 MDA.
- A recovery in Tiger Balm sales is expected in Haw Par’s full-year results later this month. UOB’s financials, and UOL (UOL SP)‘s, are also due out this month.
Mankind Pharma Pre-IPO – Thoughts on Valuations
- Mankind Pharma is looking to raise around US$1bn in its upcoming India IPO.
- MP is a pharmaceutical company engaged in developing, manufacturing and marketing a range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
- We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.
Shanghai Haohai Biological Technology (688366.CH/6826.HK)- Disappointing Earnings and Gloomy Outlook
- Through continuous M&A/resource integration, Haohai has gradually established its four business segments, but such development strategy hasn’t brought ideal performance, which is disappointing if compared with Bloomage and Imeik.
- The future performance driver of Haohai still lies in the medical aesthetics business, but increasing competition and declining gross margin cast doubts on the outlook and growth potential.
- Shanghai Haohai Biological Technology-A (688366 CH) is overvalued. Due to lack of growth point with high certainty, we are not optimistic about the upside potential of Haohai’s valuation.
Vertex Pharmaceuticals (VRTX US): Mixed 4Q22 Results; Upbeat 2023 Guidance
- Vertex Pharmaceuticals (VRTX US) reported mixed 4Q22 results. Revenue grew 11% YoY to $2.30B, in-line with expectations. Adjusted EPS surged 25% YoY to $3.76, 7% ahead of consensus.
- Revenue was driven by the strong uptake of Trikafta/Kaftrio in multiple countries internationally and continued performance of Trikafta in the U.S. Trikafta/Kaftrio revenue grew 19% YoY to $2.02B.
- Vertex guided for 2023 revenue of $9.55–9.70B (+7–9%), with the low end matching current consensus. The company aims to launch five new products over the next five years.
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