In today’s briefing:
- EOFLOW/Medtronic Tender: Proposed Preliminary Injunction Is a Problem
- Eoflow: Ozempic and Wegovy Reducing Need for Disposable Insulin Injection Devices + Ongoing Lawsuit?
- Samsung Biologics (207940 KS): Raises 2023 Sales Guidance Second Time This Year; Buy the Dip
- Policy Shareholdings, if Reduced, Should Be Used for Profitable Investments
EOFLOW/Medtronic Tender: Proposed Preliminary Injunction Is a Problem
- The US judge has proposed a preliminary injunction which prevents Eoflow (294090 KS) from using Insulet Corp (PODD US)’s trade secrets and disclosing them to any third party.
- Eoflow and other defendants must respond by 5 October. The court hearing is set for 16 October. The potential trial is to be discussed in Spring of 2024.
- Medtronic Plc (MDT US) faces a difficult choice. If the injunction is enforced, Medtronic would acquire a ring-fenced asset exposed to potential court-determined liabilities.
Eoflow: Ozempic and Wegovy Reducing Need for Disposable Insulin Injection Devices + Ongoing Lawsuit?
- Eoflow’s share price has dropped 27% lower than the proposed tender offer price of 30,000 won. Two major factors have negatively impacted Eoflow (294090 KS)’s share price.
- First, in September 2023, there were new data that suggested that popular weight loss drugs including Ozempic and Wegovy could reduce the need for insulin injections with patients with diabetes.
- Second, the ongoing lawsuit by Insulet continues to remain a major headache. Eoflow is not a KISS (“Keep It Simple Stupid”) stock.
Samsung Biologics (207940 KS): Raises 2023 Sales Guidance Second Time This Year; Buy the Dip
- Samsung Biologics (207940 KS) expects 2023 revenue to grow by more than 20% YoY compared to 15–20% YoY growth expectations earlier, due to better-than-expected utilization of Plant 4.
- For the first time in the company’s history, Samsung Biologics has won contracts worth nearly KRW3T during the first half of 2023, with eight contracts worth more than KRW100B each.
- Anticipating strong demand, Samsung Biologics is building its fifth manufacturing plant with 180KL capacity, which is expected to be completed by April 2025.
Policy Shareholdings, if Reduced, Should Be Used for Profitable Investments
- TSE market reorganization triggered the reduction of policy shareholdings, and now the test will be whether policy shareholdings can be reduced in order to raise ROE, which is sluggishly growing.
- Companies that maintain excessive policy shareholdings should provide a rational explanation of their holding policies and the reasons for each shareholding in their corporate governance reports and annual securities reports.
- Improving OP Margin, which is highly correlated with ROE, is a shortcut to raising ROE. Policy shareholdings, should not be accumulated in cash on hand, but used for profitable investments.
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