In today’s briefing:
- Legend Biotech Follow-On – A Little Opportunistic. Last Deal Did Well, After a Large Correction
- Terumo Corp (4543 JP): A COVID Recovery Play; Cardiac & Vascular Business to Drive Multi-Year Growth
- S&P BSE Quiddity Leaderboard Dec 2022: Some More Interesting LONG-SHORT Pairs
- Downgrading Utilities & Staples to Market Weight; Buy Ideas in Health Care & Trucking
- Sihuan Pharmaceutical (460.HK) – The Potential Disposal of Generic Drug Business and the Outlook
Legend Biotech Follow-On – A Little Opportunistic. Last Deal Did Well, After a Large Correction
- Legend Biotech Corp (LEGN US), a non-wholly owned subsidiary of Hong Kong-listed Genscript Biotech (1548 HK), is planning to raise up to US$250m in its follow-on offering.
- The company last raised cash in Dec 2021 in a similar sized deal, which ended up doing very well after a sharp share price correction.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Terumo Corp (4543 JP): A COVID Recovery Play; Cardiac & Vascular Business to Drive Multi-Year Growth
- Terumo Corp (4543 JP) earns 56% revenue from cardiac and vascular segment, which is the fastest growing segment of the company. The segment is seeing continued recovery from COVID impact.
- For FY23, Terumo guided for cardiac and vascular segment revenue of ¥445.5B (+12% y/y) and adjusted operating profit of ¥113.4B (+22% y/y), leading to operating margin of 25.5% (+200bps y/y).
- Over the next five years, Terumo aims for high single-digit revenue growth from the segment, through new product launches and expanding adoption of existing products across disease areas.
S&P BSE Quiddity Leaderboard Dec 2022: Some More Interesting LONG-SHORT Pairs
- In this insight, we take a look at the names leading the race to become ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the December 2022 Rebalance.
- SENSEX and BSE 100 could both see one index change each. There could be multiple ADDs/DELs for the BSE 200 and BSE 500 indices.
- There are several trading opportunities with interesting potential index flow dynamics.
Downgrading Utilities & Staples to Market Weight; Buy Ideas in Health Care & Trucking
- We are starting to see some positive signals that suggest the lows for this bear market may have already been established, or that additional downside is limited from here.
- We need to see downtrend reversals (get above 4030-4040 on SPX, $189 on IWM, and $115 on IWC) and for the NDX(QQQ) to break above $315, to get more constructive.
- Positive signals include, among other things: the Financial Sector (XLF) and Broker-Dealers/Exchanges ETF (IAI) are reversing topside their 4-5-month downtrends.
Sihuan Pharmaceutical (460.HK) – The Potential Disposal of Generic Drug Business and the Outlook
- The disposal of generic drug segment would bring one-time cash flow. Together with the cash on hand, Sihuan Pharmaceutical Hldgs (460 HK) is undervalued based on its current market value.
- In the context of its innovative drug segment facing long-term losses, and the decreasing profit margins of medical beauty segment due to increasing competition, Sihuan’s prospects are no brighter.
- Due to the concerns on outlook and its development mode, Sihuan’s upside potential could be lower than expected, and the share price could fluctuate largely.
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