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

Novo Nordisk A/S develops, produces, and markets pharmaceutical products. The Company focuses on diabetes care and offers insulin delivery systems and other diabetes products. Novo Nordisk also works in areas such as haemostatis management, growth disorders, and hormone replacement therapy. The Company offers educational and training materials. Novo Nordisk markets worldwide.

<ul>
<li>GLP-1s are “a solution” for obesity and not “the solution”. There are over 100 GLP-1s in development and this space could become very commoditised.</li>
<li>Its valuation has certainly become a lot more palatable, and Novo Nordisk is now trading on a FPE of 24.</li>
<li>Lilly’s Zepbound is the preferred GLP-1: Given the better tolerance, and superior results, Zepbound is chosen over Wegovy.</li>
</ul>


GLP-1s are “a solution” for obesity and not “the solution”. There are over 100 GLP-1s in development and this space could become very commoditised.
Its valuation has certainly become a lot more palatable, and Novo Nordisk is now trading on a FPE of 24.
Lilly’s Zepbound is the preferred GLP-1: Given the better tolerance, and superior results, Zepbound is chosen over Wegovy.


Is It Time to Go Long Novo Nordisk (NVO US)?

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>Sinopharm will benefit from the strong expected growth in China’s healthcare spend.</li>
<li>There is scope to increase its distribution which will continue to shield the company from short-term volatility.</li>
<li>Pricing pressure in drug prices creates opportunity to optimise range and improve profitability.</li>
</ul>


Sinopharm will benefit from the strong expected growth in China’s healthcare spend.
There is scope to increase its distribution which will continue to shield the company from short-term volatility.
Pricing pressure in drug prices creates opportunity to optimise range and improve profitability.


Sinopharm (1099 HK) - A Compelling Investment Case

Thematic (Sector/Industry)

<ul>
<li>China's over-65 demographic is projected to grow by 50% in the next decade, driving increased demand for healthcare services, eldercare, and technology.</li>
<li>The healthcare sector in China presents a significant investment opportunity as the country addresses the needs of its ageing population.</li>
<li>Insights from the US, where healthcare spending is closely tied to an ageing population, can inform strategies for growth in China’s healthcare market, offering potential for long-term returns.</li>
</ul>


China's over-65 demographic is projected to grow by 50% in the next decade, driving increased demand for healthcare services, eldercare, and technology.
The healthcare sector in China presents a significant investment opportunity as the country addresses the needs of its ageing population.
Insights from the US, where healthcare spending is closely tied to an ageing population, can inform strategies for growth in China’s healthcare market, offering potential for long-term returns.


China's Ageing Population Challenge: Lessons from US Healthcare Spending

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>At a 51 NPE, Daiichi Sankyo was priced for perfection.</li>
<li>We do like their focus on the high growth oncology segment, however, we felt that the valuation left no room for error.</li>
<li>Post the two disappointing trial announcements, at a 39 NPE, the valuation is become more palatable and getting closer to our mid-thirties target entry point.</li>
</ul>


At a 51 NPE, Daiichi Sankyo was priced for perfection.
We do like their focus on the high growth oncology segment, however, we felt that the valuation left no room for error.
Post the two disappointing trial announcements, at a 39 NPE, the valuation is become more palatable and getting closer to our mid-thirties target entry point.


Daiichi Sankyo (4568 JP) Valuation Update – Are We There Yet?

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>The biosimilar market is forecast to grow three to four times faster than the generic drug market over the next five years.</li>
<li>However, we believe that this high growth will not necessarily imply good profitability, given the early stage of the biosimilar market, complications and competition.</li>
<li>We also believe that the company’s guidance is too optimistic resulting in an expensive multiple. We prefer some room for error.  </li>
</ul>


The biosimilar market is forecast to grow three to four times faster than the generic drug market over the next five years.
However, we believe that this high growth will not necessarily imply good profitability, given the early stage of the biosimilar market, complications and competition.
We also believe that the company’s guidance is too optimistic resulting in an expensive multiple. We prefer some room for error.  


Celltrion Inc (068270 KS)– Is the Sell-Side’s Bullishness Justified?

daaimon

Is It Time to Go Long Novo Nordisk (NVO US)?

GLP-1s are "a" solution for obesity. With 100+ in development, the market could become overcrowded. NN's valuation is more realistic now, but we...

daaimon

Sinopharm (1099 HK) - A Compelling Investment Case

Sinopharm is well positioned to benefit from China’s expected strong growth in healthcare spend. The investment case is further strengthened by a...

daaimon

China's Ageing Population Challenge: Lessons from US Healthcare Spending

China's aging population is driving increased demand for healthcare services, presenting a significant investment opportunity with potential for...

daaimon

Daiichi Sankyo (4568 JP) Valuation Update – Are We There Yet?

The “priced for perfection scenario” is unwinding and the valuation is become more palatable. We recommend buying into weakness.

daaimon

Celltrion Inc (068270 KS)– Is the Sell-Side’s Bullishness Justified?

Biosimilar market is expected to grow much faster than generic drug market, but profitability will be a challenge. Celltrion’s guidance is too...

daaimon

Is It Time to Go Long Novo Nordisk (NVO US)?

​GLP-1s are "a" solution for obesity. With 100+ in development, the market could become overcrowded. NN's valuation is more realistic now, but we...

daaimon

Sinopharm (1099 HK) - A Compelling Investment Case

Sinopharm is well positioned to benefit from China’s expected strong growth in healthcare spend. The investment case is further strengthened by a...

daaimon

China's Ageing Population Challenge: Lessons from US Healthcare Spending

​China's aging population is driving increased demand for healthcare services, presenting a significant investment opportunity with potential for...

daaimon

Daiichi Sankyo (4568 JP) Valuation Update – Are We There Yet?

The “priced for perfection scenario” is unwinding and the valuation is become more palatable. We recommend buying into weakness.

daaimon

Celltrion Inc (068270 KS)– Is the Sell-Side’s Bullishness Justified?

Biosimilar market is expected to grow much faster than generic drug market, but profitability will be a challenge. Celltrion’s guidance is too...

daaimon

GLP-1s are "a" solution for obesity. With 100+ in development, the market could become overcrowded. NN's valuation is more realistic now, but we...

China's aging population is driving increased demand for healthcare services, presenting a significant investment opportunity with potential for...