Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/abbott-laboratories" target="_blank" data-smartkarma-citation="entities:11987:1" rel="noopener">Abbott Laboratories' (ABT US)</a> diversified business mix continued to prove highly resilient even during the worst period of pandemic. Strong consumer-facing and diagnostic businesses mitigated the slump in hospital-related business.</li>
<li>Dominant positioning in the Covid-19 diagnostic should augur well during the emergence of Omicron variant. Double-digit growth in non-Covid diagnostics portfolio enhances conviction in post-Covid era.   </li>
<li>Existing leadership positioning and multiple new product launches in large and high-growth market segments, including structural heart and diabetes remain long-term growth driver for Abbott.</li>
</ul>



Abbott Laboratories' (ABT US) diversified business mix continued to prove highly resilient even during the worst period of pandemic. Strong consumer-facing and diagnostic businesses mitigated the slump in hospital-related business.
Dominant positioning in the Covid-19 diagnostic should augur well during the emergence of Omicron variant. Double-digit growth in non-Covid diagnostics portfolio enhances conviction in post-Covid era.   
Existing leadership positioning and multiple new product launches in large and high-growth market segments, including structural heart and diabetes remain long-term growth driver for Abbott.


2022 High Conviction: Abbott Laboratories – Resilient Business Model at Reasonable Valuation

Thematic (Sector/Industry)

<ul>
<li>New Covid cases across the world is surging. New Covid-19 variant found in South Africa and Botswana is adding to fears.</li>
<li>This will bring the focus back to molecular diagnostic companies due to increasing demand for Covid testing.</li>
<li>We have listed few global diagnostic companies, which should benefit from this backdrop.</li>
</ul>


New Covid cases across the world is surging. New Covid-19 variant found in South Africa and Botswana is adding to fears.
This will bring the focus back to molecular diagnostic companies due to increasing demand for Covid testing.
We have listed few global diagnostic companies, which should benefit from this backdrop.


New Covid Variant Raises Fear: Stocks to Own to Buck the Trend

<p>Shares of Seegene (096530 KS) are trading near 52-week low. The company is reporting sequential decline in revenue due to decelerating COVID-19 PCR testing volume in European countries prior to the unexpected virus variants outbreak. Such continuous uncertainties may have resulted inventory burdens on customer end and affected to performance of Q2. Meanwhile, the proportion of COVID testing reagents sales over the total sales has been dropped to 65% in H1 2021 from 67% in 2020. However, new COVID-19 cases, especially delta variant are steadily increasing in Europe since Q3. The trend continues in early Q4 also. This may lead to a rebound in COVID-19 reagent revenue for Seegene. Management expects as demand for screenings increases in Asian countries including South Korea, Latin America, and Europe, where COVID-19 cases are growing exponentially due to the delta variant, sales in Q3 are expected to surpass that of Q2. Early trends from other global COVID testing majors enhance our conviction on COVID-19 testing revenue recovery.  </p>

Shares of Seegene (096530 KS) are trading near 52-week low. The company is reporting sequential decline in revenue due to decelerating COVID-19 PCR testing volume in European countries prior to the unexpected virus variants outbreak. Such continuous uncertainties may have resulted inventory burdens on customer end and affected to performance of Q2. Meanwhile, the proportion of COVID testing reagents sales over the total sales has been dropped to 65% in H1 2021 from 67% in 2020. However, new COVID-19 cases, especially delta variant are steadily increasing in Europe since Q3. The trend continues in early Q4 also. This may lead to a rebound in COVID-19 reagent revenue for Seegene. Management expects as demand for screenings increases in Asian countries including South Korea, Latin America, and Europe, where COVID-19 cases are growing exponentially due to the delta variant, sales in Q3 are expected to surpass that of Q2. Early trends from other global COVID testing majors enhance our conviction on COVID-19 testing revenue recovery.  

Seegene (096530 KS): Worst Seems to Be Over; Non-COVID Revenue to Dictate Long-Term Growth

Equity Long-Short Analyst

Pyari Menon

<p>While modern pharmacology has been able to produce new medicines to treat or manage most diseases, these drugs often cause unpredictable side effects, which sometimes lead to the development of secondary diseases, especially for chronic conditions. One possible alternative to the problem of sustained use of drugs is <strong>electro, radiation, and ultrasound therapy. </strong></p>
<p>In the area of <strong>electrotherapy</strong>, <strong><a href="https://www.smartkarma.com/entities/medtronic-plc" target="_blank" data-smartkarma-citation="entities:14982:1" rel="noopener">Medtronic Plc (MDT US)</a></strong> and <strong><a href="https://www.smartkarma.com/entities/boston-scientific-corp" target="_blank" data-smartkarma-citation="entities:11115:1" rel="noopener">Boston Scientific (BSX US)</a></strong> are the clear leaders by far, with dominance in the number of innovations, positive mentions, and impact of their innovations. However, with the increased use of electrotherapy for pain management and physiotherapy smaller players with unique products now compete in specific silos. Three small-cap names that screen well technologically are <strong><a href="https://www.smartkarma.com/entities/nevro-corp" target="_blank" data-smartkarma-citation="entities:2218:1" rel="noopener">Nevro Corp (NVRO US)</a>, <a href="https://www.smartkarma.com/entities/nuvasive-inc" target="_blank" data-smartkarma-citation="entities:8384:1" rel="noopener">Nuvasive Inc (NUVA US)</a></strong>, and <strong><a href="https://www.smartkarma.com/entities/integer-holdings-corp" target="_blank" data-smartkarma-citation="entities:18313:1" rel="noopener">Greatbatch Inc (ITGR US)</a></strong>.</p>
<p>In Radiotherapy <strong><a href="https://www.smartkarma.com/entities/siemens-healthineers-ag" target="_blank" data-smartkarma-citation="entities:29221:1" rel="noopener">Siemens Healthineers AG (SHL GR)</a> </strong> leads the field.  Surprisingly a private company <strong>Aerin Medical</strong> which provides treatment options for chronic nasal conditions and is a play on rising allergies and sleep apnoea comes in second</p>
<p>In Ultrasound therapy, <a href="https://www.smartkarma.com/entities/johnson-johnson" target="_blank" data-smartkarma-citation="entities:1132:1" rel="noopener">J<strong>ohnson &amp; Johnson (JNJ US)</strong></a> tops the list. A small-cap company <strong><a href="https://www.smartkarma.com/entities/butterfly-network-inc" target="_blank" data-smartkarma-citation="entities:33050:1" rel="noopener">Butterfly Network Inc (BFLY US)</a></strong> prima facie seems to have products that could potentially change the way ultrasound scans are performed as their technologies allow for use of small portable equipment in conjunction with a smartphone or tablet to create an ultrasound machine.</p>

While modern pharmacology has been able to produce new medicines to treat or manage most diseases, these drugs often cause unpredictable side effects, which sometimes lead to the development of secondary diseases, especially for chronic conditions. One possible alternative to the problem of sustained use of drugs is electro, radiation, and ultrasound therapy. 
In the area of electrotherapy, Medtronic Plc (MDT US) and Boston Scientific (BSX US) are the clear leaders by far, with dominance in the number of innovations, positive mentions, and impact of their innovations. However, with the increased use of electrotherapy for pain management and physiotherapy smaller players with unique products now compete in specific silos. Three small-cap names that screen well technologically are Nevro Corp (NVRO US), Nuvasive Inc (NUVA US), and Greatbatch Inc (ITGR US).
In Radiotherapy Siemens Healthineers AG (SHL GR)  leads the field.  Surprisingly a private company Aerin Medical which provides treatment options for chronic nasal conditions and is a play on rising allergies and sleep apnoea comes in second
In Ultrasound therapy, Johnson &amp; Johnson (JNJ US) tops the list. A small-cap company Butterfly Network Inc (BFLY US) prima facie seems to have products that could potentially change the way ultrasound scans are performed as their technologies allow for use of small portable equipment in conjunction with a smartphone or tablet to create an ultrasound machine.

Stock Ideas Based on Data Mined from Technical Publications - Electro, Radio, & Ultrasound Therapies

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

MicroTech Medical Hangzhou / Equity Capital Markets

<div>
<div><p><a href="https://www.smartkarma.com/entities/microtech-medical-hangzhou-co-ltd" target="_blank" data-smartkarma-citation="entities:33367:1" rel="noopener">MicroTech Medical Hangzhou (2235 HK)</a> is focused on diabetes management, providing both diabetes treatment and diabetes monitoring medical devices to improve diabetes management globally. The core product is Equil which is a semi-disposable patch insulin pump that was commercially launched in 2018 in China.</p></div>
<div>
<p>At the proposed IPO price range of HK$27.70-31.15 per share, Microtech will have a market cap of HK$11,732-13,193 million ($1.5-1.7 billion). At the mid-point of the IPO price range, the net proceeds are HK$1,750.0 million ($225 million).</p>
<p>Eleven cornerstone investors will purchase $153.5 million worth of the offer shares (63.9% of the offer shares at the mid-point of the IPO price range). Two out of the eleven cornerstones are existing investors. They are LAV Group and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. The remaining cornerstones which are not existing shareholders are Invesco, UBS AM, Springhill Fund, Hudson Bay, Boyu Capital, Lake Bleu Capital, Octagon Capital, OrbiMed and Sage Partners.</p>
</div>
</div><div><p>In <a href="https://www.smartkarma.com/insights/microtech-medical-ipo-initiation-fighting-diabetes" target="_blank" data-smartkarma-citation="insights:58570" rel="noopener">MicroTech Medical IPO Initiation: Fighting Diabetes</a>, we opined that Microtech has three categories of commercialised products which are Equil (the core product), BGMS and CGMS. Equil is the only patch insulin pump approved in China. In combination with attractive pricing, Equil has significant headroom to increase its China market share from its 3% share in 2020, in our view. Also, AiDEX G7 CGMS, which is currently in the early stage of marketing, presents a near-term growth opportunity. We concluded that Microtech is worth a closer look.</p></div><div><div><div class="content-highlight"><p>Our valuation analysis suggests that the IPO price range is full and we would remain on the sidelines awaiting a better entry opportunity. </p></div></div></div>


MicroTech Medical Hangzhou (2235 HK) is focused on diabetes management, providing both diabetes treatment and diabetes monitoring medical devices to improve diabetes management globally. The core product is Equil which is a semi-disposable patch insulin pump that was commercially launched in 2018 in China.

At the proposed IPO price range of HK$27.70-31.15 per share, Microtech will have a market cap of HK$11,732-13,193 million ($1.5-1.7 billion). At the mid-point of the IPO price range, the net proceeds are HK$1,750.0 million ($225 million).
Eleven cornerstone investors will purchase $153.5 million worth of the offer shares (63.9% of the offer shares at the mid-point of the IPO price range). Two out of the eleven cornerstones are existing investors. They are LAV Group and Tencent (700 HK). The remaining cornerstones which are not existing shareholders are Invesco, UBS AM, Springhill Fund, Hudson Bay, Boyu Capital, Lake Bleu Capital, Octagon Capital, OrbiMed and Sage Partners.

In MicroTech Medical IPO Initiation: Fighting Diabetes, we opined that Microtech has three categories of commercialised products which are Equil (the core product), BGMS and CGMS. Equil is the only patch insulin pump approved in China. In combination with attractive pricing, Equil has significant headroom to increase its China market share from its 3% share in 2020, in our view. Also, AiDEX G7 CGMS, which is currently in the early stage of marketing, presents a near-term growth opportunity. We concluded that Microtech is worth a closer look.Our valuation analysis suggests that the IPO price range is full and we would remain on the sidelines awaiting a better entry opportunity. 

MicroTech Medical IPO: Valuation Insights

United States

Abbott Laboratories discovers, develops, manufactures, and sells a broad and diversified line of health care products and services. The Company's products include pharmaceuticals, nutritional, diagnostics, and vascular products. Abbott markets its products worldwide through affiliates and distributors.

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Abbott Laboratories (ABT US)

2022 High Conviction: Abbott Laboratories – Resilient Business Model at Reasonable Valuation

With pandemic-resistant diversified business model, Abbott is well-positioned for high single-digit long-term revenue growth.

Tina Banerjee

New Covid Variant Raises Fear: Stocks to Own to Buck the Trend

Amidst the rising fear for the new Covid variant, investors can focus on molecular diagnostic stocks, as testing demand will be increasing again.

Tina Banerjee

Seegene (096530 KS): Worst Seems to Be Over; Non-COVID Revenue to Dictate Long-Term Growth

Seegene is expected to see COVID testing revenue recovery in H2, driven by surging delta variants in Europe and some Asian countries. Non-COVID...

Tina Banerjee

Stock Ideas Based on Data Mined from Technical Publications - Electro, Radio, & Ultrasound Therapies

The report identifies companies best positioned in Electro, Radiation, and Ultrasound therapeutic technologies. These therapies are a safer...

Pyari Menon

MicroTech Medical IPO: Valuation Insights

Our valuation analysis suggests that the IPO price range is full and we would remain on the sidelines awaiting a better entry opportunity.

Arun George

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