In today’s briefing:
- Unilever/GSK Heathcare: Ballsy, but Doable
- BCH: Share Price Exaggerated COVID Restrictions Easing
- COLL: Risks Abundant with No Guidance
Unilever/GSK Heathcare: Ballsy, but Doable
- GSK has rejected Unilever’s approaches (last at £50 billion) but leaked it would be ready to accept an offer around £60 billion (a whopping c. 65% of Unilever’s market capitalisation).
- The deal would be transformational and Unilever’s management see it as the way forward to revive the company’s performance and the share price.
- Ballsy, but doable, with a positive impact on results from FY2024, but negative impact on leverage at 4.9x. I believe that Unilever may make a further approach.
BCH: Share Price Exaggerated COVID Restrictions Easing
- Maintain HOLD rating, with a TP of Bt21, based on 23xPE’22E,which is close to -1SD of its 10-years trailing average. The 30% drop in share price from its August 21
- Yesterday, the Centre for COVID-19 Situation decided to relax some restrictive measures including a revision to the colour-coded zoning and resuming Test&Go registration for foreign travelers starting from 1 Feb
- Expect 4Q21 earnings at Bt1.3bn (+384%YoY,-54%QoQ), tumble by weak margin due to the Covid cases declined 69%, but partially offset by pent-up demand for core services
COLL: Risks Abundant with No Guidance
- COLL has yet to issue their annual revenue forecast after three consecutive years of providing such guidance, leading us to assume 2022 could be challenging than current consensus estimates imply
- XtampzaER revenue declined in third quarter 2021 with COLL facing difficulty in getting physicians to switch prescriptions. The slowdown in XtampzaER revenue has been the core of our investment thesis
- COLL has a balance sheet liability of $191.7 million related to rebates, returns, and discounts. This liability has grown faster than revenue
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