In today’s briefing:
- Blackstone to Take I’rom (2372 JP) Private in MBO at ¥2800/Share (49% Premium)
- CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains
- I’rom Group (2372 JP): Blackstone-Sponsored Pre-Conditional MBO at JPY2,800
- Olympus Corp (7733 JP): ¥100B Buyback Plan Offers an Attractive Exit Opportunity Amid Bleak Outlook
- China National Medicines (600511.CH) – After Restructuring, Performance Growth Is Guaranteed
- Shofu (7979 JP) – A Compounding Franchise Business Stepping up a Gear
- GlaxoSmithKline plc: Will Its Ongoing Investment In Oncology & Vaccines Pay Off? – Major Drivers
- ACHV: First Quarter Results
- The in vitro testing examined the removal of EVs directly from plasma & was reviewed and examined by an independent 3rd party commercial lab & by NAMSA
- IDEXX Laboratories: Fusion Of Innovation & Service Excellence In Veterinary Diagnostics! – Major Drivers
Blackstone to Take I’rom (2372 JP) Private in MBO at ¥2800/Share (49% Premium)
- Today SMO and CRO operator I’Rom Group (2372 JP) announced an MBO where Blackstone would be the sponsor.
- From outward appearances, it would seem to be an estate management exercise. It’s not particularly rich as a bid, but it isn’t awful.
- I expect this gets done as Mori-san and family and friends appear to have 58% going in. Expected to start in June.
CSI Medical Service Index Rebalance Preview: Repeat of the December Rebal Could See Big Gains
- The review period ended on 30 April, there are just over 2 weeks to announcement of the changes, and implementation will be done at the close on 14 June.
- We forecast 5 potential changes for the index in June where there could be buying of 1.6-2.6x ADV on the adds and selling of 0.7-2.6x ADV on the deletes.
- At the December 2023 rebalance, the adds outperformed the deletes in the weeks prior to announcement of the changes and then spiked post-announcement. Repeat this time?
I’rom Group (2372 JP): Blackstone-Sponsored Pre-Conditional MBO at JPY2,800
- I’Rom Group (2372 JP) recommended a Blackstone (BX US)-sponsored pre-conditional MBO at JPY2,800, a 49.5% premium to the undisturbed price.
- Approvals under the competition laws of Japan and Australia are a precondition. The tender offer is expected to start in mid-June.
- The offer is attractive and requires a 37% minority acceptance rate. While the timing of regulatory approvals is a risk, the transaction is a done deal.
Olympus Corp (7733 JP): ¥100B Buyback Plan Offers an Attractive Exit Opportunity Amid Bleak Outlook
- Olympus Corp (7733 JP) has announced a buyback plan for up to 60M shares, representing 5.15% of outstanding shares, by spending ¥100B from May 13 to December 31, 2024.
- The company has posted mixed FY24 results, with revenue beating and operating and net profits missing guidance. Olympus has guided for just 9% revenue growth for FY25.
- Overall business outlook of the company seems to be bleak. With limited upside potential expected, it will be wise to tender shares through the company’s buyback offer.
China National Medicines (600511.CH) – After Restructuring, Performance Growth Is Guaranteed
- The “Entrusted Management Agreement” indicates that horizontal competition issue will be completely solved within three years.This could pave the way for a future merger between Guorui and Shanghai Shyndec Pharmaceutical.
- The spin-off of Guorui won’t have material impact on China National Medicines Corporation (CNMC). After restructuring, CNMC will focus on “Beijing area pharmaceutical distribution + nationwide distribution of anesthesia/psychotropic drugs”.
- Based on strong/stable fundamentals as well as the dominant position in anesthesia and psychotropic drug business, CNMC’s future growth potential is promising. We share our views on the Company’s valuation.
Shofu (7979 JP) – A Compounding Franchise Business Stepping up a Gear
- Demonstrating solid execution – Q1-4 FY3/24 results were ahead of company guidance, with Shofu demonstrating solid execution of its strategic initiative for overseas expansion and sales mix improvement.
- By delivering sustained double-digit sales and earnings growth with record-high profitability, we believe the outlook remains positive for the medium to longer term with production capacity increases being a major theme of the company’s new medium-term plan.
- Whilst working capital requirements and capital intensity will rise, we believe this will result in Shofu reaching its target of ¥50bn annual sales with an enduring model for shareholder value generation.
GlaxoSmithKline plc: Will Its Ongoing Investment In Oncology & Vaccines Pay Off? – Major Drivers
- GlaxoSmithKline demonstrated robust quarterly performance, continuing its commitment to creating long-term value for its stakeholders.
- The company managed to deliver double-digit growth for the quarter, with sales increasing by 13% to GBP 7.4 billion, core operating profit going up by 35% to GBP 2.4 billion, and core earnings per share increasing by 37%.
- Underpinning GlaxoSmithKline’s solid financial results is the successful launch and strong delivery of its new products, reflecting the company’s ability to continue growing and innovating in the highly competitive pharmaceutical industry.
ACHV: First Quarter Results
- Achieve Life Sciences is developing cytisinicline for use as a smoking cessation treatment in the United States and rest of world.
- Topline results from ORCA-2 were reported in April 2022 and for ORCA-3 in May 2023.
- Results exceeded expectations on safety & efficacy parameters.
The in vitro testing examined the removal of EVs directly from plasma & was reviewed and examined by an independent 3rd party commercial lab & by NAMSA
- The in vitro testing examined the removal of EVs directly from plasma & was reviewed and examined by an independent 3rd party commercial lab & by NAMSA, AEMD’s CRO for its planned Australian oncology study.
- The data is a critical element enabling the company to move the Hemopurifier forward in clinical oncology studies towards potential regulatory approval and commercialization.
- The next step is for AEMD to add the data to its Clinical Investigator Brochure, which it will then submit to the Ethics Committees at clinical sites interested in participating in the planned trials in Australia and India.
IDEXX Laboratories: Fusion Of Innovation & Service Excellence In Veterinary Diagnostics! – Major Drivers
- IDEXX Laboratories began 2024 on a positive note, highlighted by strong profit gains and solid organic revenue growth.
- In the first quarter, the company’s overall revenues increased by 7%, organically, underpinned by 7% organic growth in Companion Animal Group (CAG) Diagnostic recurring revenues.
- This robust growth occurred despite adverse effects from severe U.S. weather in January that the company estimates lowered overall organic revenue growth by 0.5% to 1%.
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