Daily Brief Health Care: M3 Inc, Teladoc Health, Inc., Ramsay Health Care and more

In today’s briefing:

M3: Revenue and OP Beat Consensus but Don’t Rush to Make an Entry
Teladoc Health Inc (TDOC US): Q2 Revenue Beat Expectations; Here Is Why the Stock Toppled
(Mostly) Asia M&A: July 2022 Roundup

M3: Revenue and OP Beat Consensus but Don’t Rush to Make an Entry

M3 Inc (2413 JP) reported 1QFY03/2023 results yesterday. Revenue grew 22.8% YoY to JPY57.0bn (vs consensus JPY50.8bn) while OP decreased 24.2% YoY to JPY19.0bn (vs consensus JPY16.3bn).
The decline in OP was due to decrease in profit from overseas business where 1QFY03/2022 benefited from the Medlive IPO.
Though m3’s earnings have beaten consensus and the company’s core Medical Platform has seen some recovery in earnings, we would not be rushing to make an entry.

Teladoc Health, Inc. (TDOC US) reported mixed Q2 results, with revenue and adjusted EBITDA coming in above the midpoint of guidance range. However, EPS came significantly below consensus and guidance.
Teladoc has already took $9.8 billion hit from impairment charge in H1 2022. Moreover, the company now expects results to be toward the lower end of already reduced guidance range.
Since publishing Q1 results in April, the stock plummeted 23% in three months. From its peak in February 2021, the stock is now down 85%. No immediate recovery is expected.

For the month of July, only 4 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of just ~US$1bn.
The average premium for the new deals announced (or first discussed) in July was ~42%, and a year-to-date average of 38%.
This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.

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