In today’s briefing:
- Sinopharm Group (1099 HK): Strong 2022 Results; Double-Digit Top and Bottom-Line Growth to Continue
- Defensives Worthy of a Tactical Overweight; Buys in Global Health Care, Gold Miners, and Utilities
- PerkinElmer Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report
- Sino Biopharmaceutical (1177.HK) – The Positives and the Negatives
- PerkinElmer Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- Waters Corporation: Initiation of Coverage – The Wyatt Technology Acquisition & Other Drivers
- Waters Corporation: Detailed Credit Analysis & Financial Strength Evaluation Report
- West Pharmaceutical Services Inc.: Initiation of Coverage – Business Strategy & Key Drivers
Sinopharm Group (1099 HK): Strong 2022 Results; Double-Digit Top and Bottom-Line Growth to Continue
- Sinopharm Group Co Ltd H (1099 HK) reported strong 2022 results, with annual revenue exceeding RMB550B and net profit achieving 10% YoY growth. Growth was driven by pharmaceutical distribution business.
- EPS increased 10% YoY to RMB2.73, ahead of consensus of RMB2.64. The company has increased its final dividend to RMB0.82 per share from RMB0.75 per share in the prior year.
- With favorable industry tailwind and China reopening, consensus expects Sinopharm to report double-digit revenue and EPS growth through 2025.
Defensives Worthy of a Tactical Overweight; Buys in Global Health Care, Gold Miners, and Utilities
- As recently as last week and throughout February/March we have recommended shifting to defensives due to our belief that $93 will cap upside on the $ACWI in 2023.
- MSCI ACWI defensive Sectors including Health Care, Utilities, and Consumer Staples are hitting 2+ month RS highs, and are staging bullish price and RS reversals, as are gold miners (GDX-US).
- This confirms our belief that now is the time to be tactically overweight defensives. We highlight buys in Health Care, Gold Miners, and Utilities, with the vast majority from Europe
PerkinElmer Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report
- PerkinElmer is a major provider of life sciences, diagnostics, and applied services markets across the globe.
- The company had a decent 2022 and their Life Sciences and Diagnostics business experienced organic growth of 9% for the entire year.
- With the introduction of adeno-associated virus or AAV detection kits, the Life Sciences business has continued to innovate in cell and gene therapy.
Sino Biopharmaceutical (1177.HK) – The Positives and the Negatives
- Sino Biopharm’s 2022 performance isn’t satisfactory, but the Company is gradually getting rid of the negative influence of VBP. We expect Sino Biopharm to achieve faster performance recovery than Hengrui.
- Most of Sino Biopharm’s innovative drugs are biosimilars and Me-Too products, which will face fierce competition once approved for listing. The revenue target of HK$100 billion by 2030 looks challenging.
- Corporate governance deficiencies and lack of the next big variety are the reasons why the market is reluctant to offer high valuation. The new CEO needs time to prove his ability.
PerkinElmer Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on PerkinElmer, a premium provider of life sciences, diagnostics, and applied services markets across the globe.
- The company had a decent 2022 and their Life Sciences and Diagnostics business experienced organic growth of 9% for the entire year.
- With the introduction of adeno-associated virus or AAV detection kits, the Life Sciences business has continued to innovate in cell and gene therapy.
Waters Corporation: Initiation of Coverage – The Wyatt Technology Acquisition & Other Drivers
- This is our first report on major lab equipment manufacturer, Waters Corporation.
- Waters’ growth has also been aided by its reinvigorated portfolio and this trend is expected to continue.
- We initiate coverage on the stock of Waters Corporation with a ‘Hold’ rating.
Waters Corporation: Detailed Credit Analysis & Financial Strength Evaluation Report
- This is our first report on major lab equipment manufacturer, Waters Corporation.
- Its Pharma has also had decent growth, driven by both large and small molecule applications which has been led by the European markets.
- Baptista Research looks to evaluate the different credit strengths and credit risks of the company as well as a line-by-line analysis of the financial statements of the company for the past four years.
West Pharmaceutical Services Inc.: Initiation of Coverage – Business Strategy & Key Drivers
- This is our first report on West Pharmaceutical Services, a major manufacturer of injectable medication delivery and packaging systems.
- West Pharmaceutical reported an all-around beat in its last result and generated about 8% growth in organic sales overall.
- With COVID-19 excluded, West anticipates that its base organic sales growth was in the low double digits, with proprietary product growth in the mid-teens.
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