In today’s briefing:
- Mankind Pharma IPO: The Bull Case
- ADICON Holdings IPO: Covid Driven Earnings to Decline While Growth Prospects Remain Uncertain
- Adicon Holdings Pre-IPO – Too Much Growth from COVID-19
- China Traditional Chinese Medicine (570.HK) – Looking Forward to a Performance Turnaround in 2023
- Takara Bio (4974 JP): Shrinking COVID-19 Testing Demand to Impact Near-Term Revenue Growth
Mankind Pharma IPO: The Bull Case
- Mankind Pharma (6596876Z IN), a pharmaceutical company, is seeking to raise up to Rs45 billion (US$550 million) in April, according to press reports.
- Mankind Pharma is India’s fourth-largest pharmaceutical company in terms of domestic sales and second-largest in terms of sales volume in FY22, according to IQVIA.
- The key elements of the bull case rest on a track record of growing brands and market share, accelerating growth rates, and profitability with margins in a relatively tight range.
ADICON Holdings IPO: Covid Driven Earnings to Decline While Growth Prospects Remain Uncertain
- ADICON Holdings is one of top three independent clinical laboratories (ICL) in China based on total revenues. The company offers testing services primarily to hospitals and health check centres.
- The company’s application for a HKEx listing has been approved and according to news media outlets, ADICON plans to raise around US$400m through the IPO.
- Over the last three years, most of ADICON Holdings Limited (ADI HK) ’s growth were driven by Covid-19 related testing services which are likely to see huge decline going forward.
Adicon Holdings Pre-IPO – Too Much Growth from COVID-19
- ADICON Holdings Limited (ADI HK) is looking to raise about US$400m in its upcoming HK IPO.
- Adicon Holdings is one of the top three independent clinical laboratory (ICL) service providers in China in terms of total revenue during the Track Record Period, according to F&S.
- Adicon’s revenue growth has been driven by its medical diagnostic testing services segment, during the track record period. However, much of its growth appears to be driven by COVID-19 testing.
China Traditional Chinese Medicine (570.HK) – Looking Forward to a Performance Turnaround in 2023
- China TCM’s concentrated TCM granules business improved significantly in 22H2, and the total revenue in 22H2 also increased by 42% YoY, indicating that the decline trend has been significantly curbed.
- Due to its SOE background+ national standard setters with the largest number of national standards filed, China TCM would be the beneficiary of the industry’s transformation during this dividend period.
- Due to low base last year, China TCM’s performance would rebound this year. Considering favorable policies and large growth potential in TCM granules, we’re optimistic about its share price performance.
Takara Bio (4974 JP): Shrinking COVID-19 Testing Demand to Impact Near-Term Revenue Growth
- Takara Bio Inc (4974 JP) has raised FY23 revenue, operating profit, and net profit guidance by 1%, 5%, and 5%, respectively, due to better-than-anticipated sales of the COVID-19 testing-related reagents.
- Takara Bio is heavily exposed to the COVID-19-related reagent revenue. However, the company is witnessing decline in general research reagent revenue in Japan.
- With the shrinking demand for the COVID-19 testing and slower-than-expected recovery in general research reagent in Japan, revenue is expected to decline 25% YoY in FY24.
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