In today’s briefing:
- Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess
- Jinxin Fertility Co Ltd (1951.HK) – Hard to Achieve Performance Reversal in 2023
Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess
- Sawai Group Holdings (4887 JP) is negatively impacted by drug reimbursement pricing in Japan. H1FY23 revenue, operating profit, net profit decreased 1%, 36% y/y, and 29%, y/y, respectively.
- Generic pharmaceutical companies are more affected by the drug price revisions than their branded counterparts. In addition, APIs are impacted by increases in the cost of oil and exchange rates.
- The sustainability of the U.S. business rebound is still uncertain. We want to watch Sawai from sidelines and wait for full-year FY23 results, FY24 guidance, and NHI pricing decision.
Jinxin Fertility Co Ltd (1951.HK) – Hard to Achieve Performance Reversal in 2023
- We have seen some positive policies released in China to support assisted reproduction. However, domestic policy support is more of a short-term catalyst and would not fundamentally change Jinxin’s prospects.
- The number of assisted reproductive centers in China is close to supply-demand equilibrium. It’s hard to support Jinxin’s valuation expansion by relying on China market. The breakthrough point is internationalization.
- Jinxin’s 2023 performance wouldn’t rebound largely. Investors could do short-term trade based on positive news/policy related to ARS in China.There’s no signal to support the complete reversal of share price.
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