Healthcare Equity Analyst - Emerging & Dev Markets, daaimon

Avien Pillay

Healthcare Equity Analyst - Emerging & Dev Markets

daaimon

daaimon is an independent research company focusing on healthcare and consumer sectors across developed and emerging markets. We produce insightful research which challenges conventional thinking. In particular, we look for new ideas by testing consensus forecasts and markets expectations.

Equity Bottom-Up

Apollo Hospitals Enterprise / Equity Bottom-Up

Apollo Hospitals Enterprise Limited owns and operates hospitals in India.  The Company also runs a 24-hour pharmacy network via over 120 outlets across India. Apollo Hospitals also runs clinics and offer managed care and family health plans. The Company has a variety of locations in Chennai, Hyderabad, Delhi, Dubai, Vizag, Bilaspur and Chengannur.

<ul>
<li>Recent results are disappointing and point to slower organic growth especially in the much higher margin Healthcare Services division.</li>
<li>The recent results also provide further evidence revealing the difficulty in expanding the network outside of management contracts.</li>
<li>Apollo is the cheapest of the three main listed hospital groups. At 48 forward PE &amp; 26 forward EV/EBITDA, we expect the core division to be growing faster (9%, Sept-25,Q2-results).</li>
</ul>


Recent results are disappointing and point to slower organic growth especially in the much higher margin Healthcare Services division.
The recent results also provide further evidence revealing the difficulty in expanding the network outside of management contracts.
Apollo is the cheapest of the three main listed hospital groups. At 48 forward PE &amp; 26 forward EV/EBITDA, we expect the core division to be growing faster (9%, Sept-25,Q2-results).


Apollo Hospitals Update (APOLLOHOSP ) – Retain Sell

Sinopharm Group Co Ltd H / Equity Bottom-Up

Sinopharm Group Co Ltd is a pharmacy distribution company. The Company also owns several pharmacy enterprise groups in different industries such as logistics, retail stores, pharmaceutical manufacturing, and chemical testing.

<ul>
<li>We expected growth to improve, however, on the contrary growth has slowed, and there seem to be limited short to medium term positive catalysts.</li>
<li>Pricing pressure is still a problem, and competition is intense especially in the fragmented medical device market.</li>
<li>Given the relatively low growth outlook, and the fact that Sinopharm is largely a distribution model, we see limited opportunity for the company to re-rate from the current level.</li>
</ul>


We expected growth to improve, however, on the contrary growth has slowed, and there seem to be limited short to medium term positive catalysts.
Pricing pressure is still a problem, and competition is intense especially in the fragmented medical device market.
Given the relatively low growth outlook, and the fact that Sinopharm is largely a distribution model, we see limited opportunity for the company to re-rate from the current level.


Sinopharm Group (1099 HK) – Downgrade to a Sell

Daiichi Sankyo Co, Ltd is a holding company established through merger of Sankyo and Daiichi pharmaceutical. The Group manufactures pharmaceuticals for human/veterinary use and medical tools and equipment. It also researches and promotes products through related companies throughout the world. The Group also produces food, food additives, livestock feeds, and agrochemicals.

<ul>
<li>We were correct not buying at a 51 FPE (at the top), despite our bullish view on their oncology portfolio of drugs.</li>
<li>With hindsight, we were early at the end Oct 2024 at 39 FPE – numbers disappointed and the counter derated significantly.</li>
<li>At a 16.5 FPE, expectations are very different. Enhertu has moved from strength to strength and has just achieved its first billion dollar quarter.</li>
</ul>


We were correct not buying at a 51 FPE (at the top), despite our bullish view on their oncology portfolio of drugs.
With hindsight, we were early at the end Oct 2024 at 39 FPE – numbers disappointed and the counter derated significantly.
At a 16.5 FPE, expectations are very different. Enhertu has moved from strength to strength and has just achieved its first billion dollar quarter.


Daiichi Sankyo (4568 JP) – Were We Too Early in Oct 2024?

Celltrion Inc. produces and sells biosimilar products and also provides consignm ent processing service for other companies.  The Company's main product is Abata cept which is for arthritis treatment

<ul>
<li>Celltrion Inc has significant underperformed over the last year and experienced a big derating.</li>
<li>Good results, but the numbers fell short of expectations due to the large biosimilar hype.</li>
<li>Outlook over the next five years is very promising, with its revenue target market value expected to almost double.  </li>
</ul>


Celltrion Inc has significant underperformed over the last year and experienced a big derating.
Good results, but the numbers fell short of expectations due to the large biosimilar hype.
Outlook over the next five years is very promising, with its revenue target market value expected to almost double.  


Celltrion Inc Update – Is It Time to Go Long (068270 KS)

The United Laboratories International Holdings Limited / Equity Bottom-Up

The United Laboratories International Holdings Limited produces and distributes pharmaceutical products. The Company's products include finished products, APIs, intermediates, and capsules.

The United Laboratories International Holdings Limited (3933 HK)

The United Laboratories International Holdings Limited

<ul>
<li>Despite its 96% price appreciation since our initiation, United Laboratories is still trading on a 8.7 FPE, and a 5.5 EV/EVITDA.</li>
<li>A US FDA GLP-1 approval and a potential $ 1.8bn deal with Novo Nordisk demonstrates its successful diabetes and obesity strategy.</li>
<li>With over 80 drugs in the pipeline to be delivered over the next five years, we believe that TUL is about to experience a very material increase in topline growth.</li>
</ul>


Despite its 96% price appreciation since our initiation, United Laboratories is still trading on a 8.7 FPE, and a 5.5 EV/EVITDA.
A US FDA GLP-1 approval and a potential $ 1.8bn deal with Novo Nordisk demonstrates its successful diabetes and obesity strategy.
With over 80 drugs in the pipeline to be delivered over the next five years, we believe that TUL is about to experience a very material increase in topline growth.


The United Laboratories International Holdings (TUL) Ltd (3933 HK) - Retain Buy

daaimon

Apollo Hospitals Update (APOLLOHOSP ) – Retain Sell

Disappointing results, indicating slower organic growth in the higher margin Healthcare Services division. Results also demonstrate difficulty in...

daaimon

Sinopharm Group (1099 HK) – Downgrade to a Sell

Despite expectations for improvement, growth has slowed with limited positive catalysts in the near term. Pricing pressure, competition in the...

daaimon

Daiichi Sankyo (4568 JP) – Were We Too Early in Oct 2024?

Daiichi Sankyo has derated significantly, their oncology portfolio has continued to succeed, and it is now trading at a very attractive valuation.

daaimon

Celltrion Inc Update – Is It Time to Go Long (068270 KS)

Celltrion Inc has underperformed due to biosimilar hype, but outlook for next 5 years is promising with revenue target market value expected to...

daaimon

The United Laboratories International Holdings (TUL) Ltd (3933 HK) - Retain Buy

United Laboratories has seen significant price appreciation and success in diabetes and obesity strategy, with a promising pipeline for future...

daaimon

Apollo Hospitals Update (APOLLOHOSP ) – Retain Sell

Disappointing results, indicating slower organic growth in the higher margin Healthcare Services division. Results also demonstrate difficulty in...

daaimon

Sinopharm Group (1099 HK) – Downgrade to a Sell

​Despite expectations for improvement, growth has slowed with limited positive catalysts in the near term. Pricing pressure, competition in the...

daaimon

Daiichi Sankyo (4568 JP) – Were We Too Early in Oct 2024?

Daiichi Sankyo has derated significantly, their oncology portfolio has continued to succeed, and it is now trading at a very attractive valuation.

daaimon

Celltrion Inc Update – Is It Time to Go Long (068270 KS)

​Celltrion Inc has underperformed due to biosimilar hype, but outlook for next 5 years is promising with revenue target market value expected to...

daaimon

The United Laboratories International Holdings (TUL) Ltd (3933 HK) - Retain Buy

​United Laboratories has seen significant price appreciation and success in diabetes and obesity strategy, with a promising pipeline for future...

daaimon

Despite expectations for improvement, growth has slowed with limited positive catalysts in the near term. Pricing pressure, competition in the...

Celltrion Inc has underperformed due to biosimilar hype, but outlook for next 5 years is promising with revenue target market value expected to...

United Laboratories has seen significant price appreciation and success in diabetes and obesity strategy, with a promising pipeline for future...