Daily Brief Health Care: EC Healthcare, Cigna Group/, Shield Therapeutics and more

• EC Healthcare (2138 HK) reported record high revenue of HK$3.9B in FY23 and started FY24 on a strong note, with Q1FY24 revenue increasing 23% YoY, driven by medical services segment.
• Cost pressure is negatively impacting the bottom line. The company is reporting decelerating EBITDA and net profit margins since FY20. ROE deteriorated to 4.5% in FY23 from 33% in FY19.
• The company is well-positioned to see turnaround in profitability with the resumption of Mainland China visitors in Hong Kong providing impetus to high margin earning aesthetic business and cost optimization.

• The Cigna Group exceeded analyst expectations in revenue and earnings, fueled by ongoing growth across its varied portfolio of companies.
• Cigna produced total revenues of $48.6 billion, adjusted earnings per share of $6.13, and cash flow from operations of $2.5 billion in the quarter.
• Another strong quarter was experienced by the company’s market-leading pharmacy, care, and benefits portfolio at Evernorth Health Services.

Shield Therapeutics’ H123 results were largely as expected. Despite the minor operational adjustments with the commercialisation ramp-up, our long-term expectations remain unchanged. H123 revenue of $4.3m grew 65.8% y o y and was largely driven by US Accrufer sales. Total prescriptions grew 59% (vs H222) to 26,200 and are anticipated to accelerate in H223 with the completed build out of its sales platform. For the medium term, we anticipate additional launches in the EU and regulatory approvals in China and our longer-term assumptions remain unchanged. Our valuation remains largely unchanged at £390.4m (£388.9m previously), reflecting updates to net cash (including the recent $6.1m equity raise) and our near-term estimate adjustments for volume and operating expenses in line with latest management guidance.