In today’s briefing:
- Shockwave Medical Inc (SWAV US): Recovery from COVID Drove Q2 Sales; 2022 Revenue Guidance Raised
- Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back
- Kaken Pharmaceutical (4521 JP): Falling Revenue of Top-Selling Drugs Limit Near-Term Growth Prospect
- S&P 500, Nasdaq 100 Testing Key Resistance Levels; Pause Likely; Buying Biotech
- Voting Rights that Fulfill Fiduciary Duty Are a Key for Tense Corporate Management Practices
Shockwave Medical Inc (SWAV US): Recovery from COVID Drove Q2 Sales; 2022 Revenue Guidance Raised
- Shockwave Medical Inc (SWAV US) had a solid Q2 across the board, with total revenue surging 116% y/y, driven by a 139% y/y jump in coronary products (73% of revenue).
- The company raised 2022 revenue guidance to $465–475 million (+96–100% y/y). Revenue guidance was raised for the second time this year.
- Shockwave shares gained 28% since I published bullish insight on the company on June 7. I believe further stream is still left.
Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back
- Due to the lockdown/pandemic, Pientzehuang Pharmaceutical’s 2022H1 performance slowed down. Considering the economic downturn and people’s cutting back spending on non-rigid consumption, the full-year revenue growth could be around 10%-20%.
- The Company’s key challenge lies in revenue growth. However, it is not easy to increase sales largely due to the scarcity of raw materials, which limits the expansion of production.
- Pien Tze Huang is overvalued. Share price could continue to fall,but it will bounce back due to its high moat. 2022 is a good time for bottom fishing this stock.
Kaken Pharmaceutical (4521 JP): Falling Revenue of Top-Selling Drugs Limit Near-Term Growth Prospect
- Kaken Pharmaceutical (4521 JP) is reporting declining revenue from its three largest selling products, due to NHI price revision. These products together contribute more than 60% of total revenue.
- The company’s newly launched products are growing at a rapid pace. However, the fastest growing product Ecclock contribute just 2% of total revenue.
- Kaken guided for just 1% y/y revenue growth and 12% y/y decline in operating profit in FY23. Due to pipeline expansion, R&D expenses are likely to remain elevated.
S&P 500, Nasdaq 100 Testing Key Resistance Levels; Pause Likely; Buying Biotech
- The weight of the evidence suggests that the lows for this bear market have likely already been established, but that does not mean it will be smooth sailing from here.
- The SPX and NDX are both testing important resistance levels (4165-4180 and the YTD downtrend, respectively), making this a logical spot for the indexes to stall and potentially pull back.
- Ultimately, we would expect to see support near their 50-day MAs as the market goes through a bottoming process. We remain neutral overall.
Voting Rights that Fulfill Fiduciary Duty Are a Key for Tense Corporate Management Practices
- As discussed in my previous article, when the % of foreign shareholders increases, companies tend not to bring up the continuation of takeover defense measures at shareholder meetings.
- The threshold level, so to speak, of the % of foreign shareholders that determines whether or not to continue takeover defense measures is estimated to be in the 30% range.
- If other domestic institutional investors follow, threshold level will be lowered and lead to a more tense corporate management, which will have a positive effect on the board of directors.
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