In today’s briefing:
- Single-Day ETF Flow Event Not to Be Missed in Korea in December
- Modern Dental Group (3600 HK): Stellar 1H23 Result- Volume Drives Revenue Growth; Net Profit Doubled
- Pre-IPO Xiamen Yan Palace Bioengineering – Concerns About Profitability and Growth Sustainability
Single-Day ETF Flow Event Not to Be Missed in Korea in December
- Ecopro Co will replace Celltrion Inc. Their float market cap difference is nearly 5 trillion won, so it doesn’t seem likely that this will reverse by the end of November.
- Ecopro may not have a very significant passive impact x ADTV, given its still high trading volume. On the other hand, Celltrion seems likely to be the target of traders.
- From a trading perspective, it’s important to focus on the potential price impact of this flow event on Celltrion, which could be amplified depending on the possibility of merger cancellation.
Modern Dental Group (3600 HK): Stellar 1H23 Result- Volume Drives Revenue Growth; Net Profit Doubled
- Modern Dental Group (3600 HK) reported strong 1H23 performance, with 12% YoY revenue growth to HK$1.6B, driven by increase in demand for its products from existing, returning, and new customers.
- With increasing economies of scale resulting from China re-opening and global dental industry recovery and increase in the proportion of digital solution cases, net profit jumped 109% YoY to HK$210M.
- Despite macroeconomic headwinds, the company is confident that the medium and long-term global demand for dental prosthetics is expected to continue due to key irreversible demographic factors and trends.
Pre-IPO Xiamen Yan Palace Bioengineering – Concerns About Profitability and Growth Sustainability
- Although Yan Palace prioritizes R&D capabilities in prospectus, its revenue growth and business model are mainly relied on large investment in marketing/promotion.The root cause is the efficacy problem of EBN.
- Whether Yan Palace’s future performance growth can be sustained is a question mark if marketing/promotion cannot drive growth anymore. Net profit margin is low. EBN is not a profitable business.
- Yan Palace’s products do not have core competitiveness or high moat. Compliance risks are also worth being vigilant about. The valuation of Yan Palace should be lower than Giant Biogene.
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