Daily Brief Health Care: UMP Healthcare, SD Biosensor, Laekna, SK Bioscience, YSB Inc and more

For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s  Chief Investment & Project Officer, Patrick Cheung. 

In the upcoming webinar, Patrick will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sameer Taneja. The Corporate Webinar will include a live Q&A session.

The webinar will be hosted on Monday, 19 June 2023, 17:00 SGT/HKT.

About UMP Healthcare

Founded in 1990, UMP Healthcare is a medical group listed on the main board of the Hong Kong Stock Exchange (stock code 722.HK) and is one of the leading comprehensive healthcare service platforms in the Hong Kong market. We have been committed “To provide comprehensive, diversified and coordinated care for everyone” by creating a network of high-quality and effective medical services for patients, payers, providers and partners.

Along with providing healthcare services that address a wide range of individual needs, UMP closely works with more than 2,000 local and international businesses and insurance organizations to establish and administer corporate healthcare benefit programs for members. The medical service network spans over 1,000 self-owned and affiliated institutions across Hong Kong, Macau, and Mainland China, offering services such as family medicine, specialist consultation, dental care, diagnostic imaging and laboratory testing, preventive medicine and health examination, physical therapy, day surgery, and endoscopy, among others. In 2022, the annual volume of outpatient visits under UMP exceeded 1.1 million.

• SD Biosensor announced a rights offering of nearly 20 million shares (representing 19.1% of outstanding shares) at the expected rights offering price of 15,520 won. 
• Bionote has announced its intentions to purchase up to 260 billion won worth of rights offering of SD Biosensor, representing 84% of rights offering amount of nearly 310 billion won. 
• This is likely to be viewed negatively by both SD Biosensor and Bionote shareholders, but more so by the latter due to the lack of rights offering discount price. 

• If you look up history, Laekna has certain connection with Novartis. However, Novartis seems to have not made much progress in small-molecule targeted oncology therapies in the past few years.
• LAE001 would face fierce competition. Its new mechanism may not be accepted by doctors/patients in front of many mature drug options in the market. LAE002 has high R&D failure risk.
• Since the stock price performance of a number of innovative drug companies based on license-in model in HKEX is unsatisfactory, together with the weak sentiment, we remain conservative about Laekna. 

• SK Bioscience (302440 KS) recorded 5% YoY growth in core vaccine revenue to KRW17B in 1Q23, mainly driven by shingles vaccine, SKY Zoster due to its continued market leadership.
• In May 2023, SK Bioscience received marketing authorization of its COVID-19 vaccine, SKYCovion from the UK MHRA. SKYCovion became the eighth COVID-19 vaccine approved in the UK.
• SK Bioscience targets revenue of KRW220 billion by 2024 mainly through global expansion of existing in-house vaccines and expanding its contract manufacturing business.

• YSB’s business model is closer to that of pharmaceutical distribution enterprises, who could carry out businesses similar to YSB based on huge market share/resource advantages/financial strength. YSB’s moat isn’t high.
• The business structure of “Self-operation Business + Online Marketplace” of YSB could involve certain policy risks. Given the nature of its business, YSB’s profit margin is difficult to improve significantly.
• YSB Inc (YSB HK)’s revenue scale could encounter bottlenecks after reaching a certain stage of growth. The valuation of YSB should be lower than that of traditional pharmaceutical distribution enterprises.