In today’s briefing:
- Medipal Holdings (7459 JP): Disappointing FY23 Guidance and Challenging Business Environment
- Shanghai Haohai Biological Technology (688366CH)- Diversified Business Layout Doesn’t Secure Outlook
- Indoco Remedies – Strong Growth in Regulated Markets
Medipal Holdings (7459 JP): Disappointing FY23 Guidance and Challenging Business Environment
- Medipal Holdings (7459 JP) reported strong revenue growth in pharmaceutical wholesale business, while its cosmetics distribution business reported lower-than-expected revenue in FY22. FY23 operating profit target was set below consensus.
- Lower demand for hygiene-related products in domestic market and lesser foreign tourists arrival in Japan are expected to negatively impact Medipal’s cosmetics distribution business.
- NHI drug price revisions are the biggest challenge in pharmaceutical wholesale business. Medipal’s largest revenue contributing drug, Takecab saw a 15.8% price reduction effective April 1.
Shanghai Haohai Biological Technology (688366CH)- Diversified Business Layout Doesn’t Secure Outlook
- Haohai’s development is fuelled by a series of acquisitions, which help Haohai establish the existing diversified businesses, but we haven’t seen any growth point with high certainty.
- Compared with Bloomage and Imeik, Haohai has no competitive advantage in the field of medical aesthetics. It’s also difficult for Haohai to make a substantial breakthrough without obvious product advantages.
- Although Haohai’s PE/TTM is significantly lower than its peers, due to centralized procurement, Haohai’s valuation could be further lower. Considering the risks, we choose to stay cautious on Haohai.
Indoco Remedies – Strong Growth in Regulated Markets
- The company expects to launch 6-7 ophthalmic products in the US. We expect IRL to be the third generic player to launch gCombigan, which has a market size of ~US$400mn in the US market.
- IRL has enough API and excipients inventory to last for the next two month.
- Launched 6 new products in the Indian market in FY22, including Subitral, which was the fastest brand to reach Rs10mn sales within just 40 days of its launch
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