Health Care: Endo International, Shukun (Beijing) Technology, Top Glove Corp and more

• Endo International (ENDP US) shares are trading near their lows. However, Endo does not seem to be an attractive bottom fishing idea as opioid litigation is still the major overhang.
• Endo’s top selling drug Vasostrict is facing generic competition, which has dragged Q1 performance of the company. Q1 revenue declined 9%, while Q2 revenue is expected to decline 28%.
• Endo is banking on specialty branded drug Xiaflex and QWO, and sterile injectables for its long-term growth. However, they cannot fully offset the impact of Vasostrict revenue loss in near-term.

• China’s AI medical imaging industry is still in its infancy, and needs to face industry supervision, data safety, potential compliance issues, doubts on commercialization prospects, NRDL coverage and increasing competition. 
• Shukun has its obvious technical advantage, rich product portfolio and many registration certificates, but the Company’s path to commercialization and profitability still remains to be seen.
• Infervision and Airdoc could be the benchmark companies. Considering the strength, the moat, and the potential of Shukun, its valuation could be higher than Infervision and Airdoc.

• Profit fell short; reiterate SELL
• Results below expectations
• Defers its capacity expansion
• Earnings adjustments

TOPG’s 3QFY22 net profit of MYR15m was below our and consensus full-year estimates. Management expects near-term outlook to remain challenging with oversupply issue and escalating raw material costs although the decline in ASP is at slower pace. TOPG will defer some of its capacity expansions. We lower our FY22 earnings forecasts by 40% after assuming a lower utilisation rate. Our TP is unchanged at MYR0.91 (on 13x CY23PER). Maintain SELL.