In today’s briefing:
- Olympus Placement – Had Been Doing Well, till Recently
- Suzuken Buyback (9987 JP) – The Best News In Years
- Yungkang Group Lock-Up – Shares Benefited from a Protracted Lockdown. Shareholders Could Monetise
- Apollo Hospitals Enterprise (APHS IN): Mixed 2QFY23 Result; Outlook Is Positive
- Micro-Tech Nanjing (688029.CH)-Worth a Spot on the Watch List Due to Possibility of Dilemma Reversal
Olympus Placement – Had Been Doing Well, till Recently
- MUFG aims to raise around US$255m via selling around 1% of Olympus Corp (7733 JP).
- The stock has been doing well recently and MUFG has sold before. Although, the recent earnings updates didn’t go down too well.
- In this note, we will run the deal through our ECM framework and comment on other deal dynamics.
Suzuken Buyback (9987 JP) – The Best News In Years
- Suzuken Co Ltd (9987 JP) last Friday announced earnings which beat expectations and raised forecasts well above consensus. But Implied H2 did not change, suggesting full-year is lowballed.
- The company announced a buyback over 5 months, but today (Tuesday) announced a ToSTNeT-3 buyback for the full size (6% or so) that morning.
- It looks like insider selling, which in addition to being accretive would be bullish on a governance basis.
Yungkang Group Lock-Up – Shares Benefited from a Protracted Lockdown. Shareholders Could Monetise
- Yunkang Group (2325 HK) was listed on 18th May 2022, with its six month lockup expiring on 17th November 2022.
- Yunkang Group is a medical operation service provider in China and as per F&S, had a market share of 3.7% in China’s medical operation service market as per 2020 revenue.
- Coming up for six-month lockup expiry are the controlling shareholders and cornerstones. With protracted lockdowns underway in China, this stock has continued to benefit, currently trading 86.3% above IPO price.
Apollo Hospitals Enterprise (APHS IN): Mixed 2QFY23 Result; Outlook Is Positive
- Apollo Hospitals Enterprise (APHS IN) recorded 14% y/y growth in revenue in Q2FY23. Occupancy in both the mature as well as new hospitals improved in Q2FY23 compared to prior quarter.
- Q2FY23 reported EBITDA declined 8% y/y to INR5.65 billion due to impact of 24/7 operating costs, which stood at INR1.74 billion (vs INR475 million in Q2FY22).
- In October, Apollo Hospitals entered into a definitive agreement to acquire 60% stake in Kerala First Health Services Limited, which offers Ayurveda medical services under the “AyurVAID Hospitals” brand.
Micro-Tech Nanjing (688029.CH)-Worth a Spot on the Watch List Due to Possibility of Dilemma Reversal
- Micro-Tech Nanjing Co Ltd (688029 CH) would face lower-than-expected performance growth in 2022, but the logic of import substitution and increasing demand for endoscopy consumables would help drive future growth.
- Centralized procurement is a problem, but Micro-Tech’s leading position of endoscopy consumables in China is stable, which wouldn’t be easily affected by centralized procurement when compared with other domestic companies.
- The valuation of Micro-Tech should be lower than Mindray and Sonoscape, since these two companies have much better performance (both growth and profitability), product competitiveness, business layout and outlook.
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