In today’s briefing:
- Virtus Health Backs CapVest’s Revised Bid
- Align Technology (ALGN US) Vs. Angelalign Technology (6699 HK): Which One Is Better Investment
- Suzhou Zelgen Biopharmaceuticals (688266.CH) – Uncertainty Leads to Inaccurate Prediction on Outlook
- Korea Small Cap Gem #17: Ray Co
- CHG: Gradually Back to Organic Growth
Virtus Health Backs CapVest’s Revised Bid
- CapVest was clearly prepared. One day after Virtus Health (VRT AU) received a revised non-binding bid from BGH Capital of $7.65/share, CapVest bumped to $7.80 by way of a Scheme.
- An off-market takeover bid with a minimum 50.1% minimum acceptance condition, offering $7.70/shares was also tabled by CapVest.
- Virtus has pivoted to CapVest and will not engage with BGH as to its A$7.65/share Offer.
Align Technology (ALGN US) Vs. Angelalign Technology (6699 HK): Which One Is Better Investment
- Align Technology (ALGN US) is better investment idea than its Chinese competitor Angelalign Technology (6699 HK), due to its larger global scale of operation, early mover advantage, and cheaper valuation.
- Align Technology is well-positioned for 20%+ revenue and earnings growth through 2024, driven by large and underpenetrated TAM of 19 million annual ortho starts.
- Align Technology shares are trading at a steep discount to Angelalign Technology shares. Price erosion due to the increasing competition remains the key risks for both the companies.
Suzhou Zelgen Biopharmaceuticals (688266.CH) – Uncertainty Leads to Inaccurate Prediction on Outlook
- We analyzed Suzhou Zelgen Biopharmaceuticals (688266 CH)’s key products(Donafenib, recombinant human thrombin for topical use, Alkotinib, Jaktinib, etc.). They have to face fierce competition, VBP impact and small market size.
- Through Gensun Biopharma, Zelgen has established the ability to develop advanced tumor immunotherapy drugs. Whether it can continue to launch new products is the key to test Zelgen’s R&D system.
- We are cautious about Zelgen because uncertainties led to inaccurate prediction on market size and outlook.Investors can choose to “catch” a rebound, but Zelgen is far from a complete reversal.
Korea Small Cap Gem #17: Ray Co
- Ray Co (228670 KS) is the 17th company in our Korea Small Cap Gems series.
- Ray Co is a leading Korean producer of digital X-ray imaging equipment for dental use. The company has attractive sales and profit growth combined with reasonable valuation multiples.
- Ray Co has been noted as one of the companies that have been invested by Scion Asset Management.
CHG: Gradually Back to Organic Growth
- Downgrade to HOLD with a TP of Bt3.90,based on 15xPE’22E, which is close to -2SD of its 10-years trailing mean. In our view,the rating does not warrant a premium valuation
- Its 4Q21 net profit figure was at Bt1.8bn, (+615%YoY, +16% QoQ), YoY growth is backed by margin expansion from Covid-related revenue and efficient cost control.
- CHG’s 2021 net profit was at B4.2bn (+380YoY) thanks to solid revenue growth (+116%YoY) and wider margin (+18ppts), helped by Covid-related services.
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