In today’s briefing:
- Raffles Medical: Consensus Too Conservative and Warrants an Upgrade
- Kalbe Farma (KLBF IJ) – More Innovation and Digitalization in 2023
- Quiddity Leaderboard JPX-Nikkei 400: End-Feb 2023
- Raffles Medical (RFMD SP): 2022 Result Tops Expectation; Medical Tourism Resumption to Drive Growth
- Lu DaoPei Medical Group Pre-IPO – Ramp up in Progress but Looks Promising
- Keymed Biosciences (2162.HK) – The $1.2B Deal with AstraZeneca for ADC and the Logic Behind
Raffles Medical: Consensus Too Conservative and Warrants an Upgrade
- Raffles Medical reported 2H2022 and full-year 2022 results today. Full-year revenue increased 5.9% YoY to SG$766.5m (vs consensus $774.7m) and OP increased 61.4% YoY to $195.8m (vs consensus $170m).
- Despite Covid-19 related revenues tapering off and China under lockdown during 2H2022, Raffles’ earnings saw a boost from Singapore reopening borders and recovery in foreign patient volume.
- Consensus forecasts are too conservative and does not reflect the recovery in demand for Raffles’ healthcare services in Singapore and China (post reversing of zero-Covid policy).
Kalbe Farma (KLBF IJ) – More Innovation and Digitalization in 2023
- Kalbe Farma (KLBF IJ) revealed an indicative set of 2022 numbers, which fell slightly short of estimates due to product mix changes and inflationary pressure from higher input costs.
- Management guidance for 2023 looks more positive and implies stable margins in the coming year, with strong momentum across prescription drugs, consumer health, nutritionals, and logistics and less inflationary pressure.
- Kalbe Farma looks interesting with more positive expectations for earnings growth in 2023, coupled with valuations below its 5-year average forward PER.
Quiddity Leaderboard JPX-Nikkei 400: End-Feb 2023
- JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
- A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the potential forward inclusions and removals every month.
- Below is a look at potential Inclusions and Removals for the JPX-Nikkei 400 Rebalance to come in August 2023 based on trading data as of end-February 2023.
Raffles Medical (RFMD SP): 2022 Result Tops Expectation; Medical Tourism Resumption to Drive Growth
- Raffles Medical (RFMD SP) reported strong 2022 results, with 6% growth in revenue and 71% increase in net profit. Growth was driven by healthcare services, which contributed 58% of revenue.
- With the reopening of borders and easing of COVID-19 related protocols in H2 2022, RMG saw a return of foreign patients seeking medical treatment in Singapore.
- In view of the company’s strong performance, the Board recommended a dividend of 3.8 cents/share for 2022, representing an increase of 36% as compared to the previous year.
Lu DaoPei Medical Group Pre-IPO – Ramp up in Progress but Looks Promising
- Lu Daopei Medical Group (1816743D CH) is looking to raise around US$400m in its upcoming Hong Kong IPO.
- Lu DaoPei Medical Group (LDPM) is a hospital operator focusing on hematology healthcare services. As per F&S, it was the largest hematology healthcare services provider in China by 2021 revenue.
- LDPM has supported its growth through its flagship hospital. However, it is unclear whether the firm will be able to sustainably maintain profitability in the long term.
Keymed Biosciences (2162.HK) – The $1.2B Deal with AstraZeneca for ADC and the Logic Behind
- It’s “a wise decision” to out-license CMG901 and receive cashflow in advance so as to focus on more important late-stage products.Keymed’s management is as pragmatic as ever in strategic choices.
- Biotech would find it difficult to promote products by themselves and has to cooperate with Big Pharma to open domestic/foreign markets. But many investors are still “living in the illusion”.
- There would be more BD deals in the future. Our view on Keymed’s valuation remains unchanged – Market cap about RMB8 billion to RMB1.6 billion is the reasonable range.
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