Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>With multiple mutations, Omicron may require modifications in the existing vaccines. With fast mover advantage and superior efficacy, <a href="https://www.smartkarma.com/entities/moderna-inc" target="_blank" data-smartkarma-citation="entities:28744:1" rel="noopener">Moderna Inc (MRNA US)</a> seems to be a clear winner of the situation.</li>
<li>Moderna’s current expectation to deliver 2–3 billion doses in 2022 is likely to be revised upwards with the fast spread of Omicron vaccine and full approval of booster doses.</li>
<li>Moderna shares have reasonable valuation compared to its peers. Higher visibility into 2022 and beyond will lead to re-rating opportunity.</li>
</ul>


With multiple mutations, Omicron may require modifications in the existing vaccines. With fast mover advantage and superior efficacy, Moderna Inc (MRNA US) seems to be a clear winner of the situation.
Moderna’s current expectation to deliver 2–3 billion doses in 2022 is likely to be revised upwards with the fast spread of Omicron vaccine and full approval of booster doses.
Moderna shares have reasonable valuation compared to its peers. Higher visibility into 2022 and beyond will lead to re-rating opportunity.


Moderna (MRNA US): To Cash in on Omicron Fear

<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

<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

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

<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. Microtech has launched an HKEx IPO to raise net proceeds of HK$1,750.0 million ($225 million). </p><p>Microtech has a credible management team with a commendable track record in developing and commercialising products. Microtech also has several blue-chip backers such as <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, Taikang, Lilly AsiaVentures, Qiming Venture Partners, IDG Capital, 3H Health and CICC Pucheng. </p><div class="content-highlight"><p>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 market share from its 3% market 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. Overall, we believe that Microtech is worth a closer look. We will discuss valuation in our next note. </p></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. Microtech has launched an HKEx IPO to raise net proceeds of HK$1,750.0 million ($225 million). Microtech has a credible management team with a commendable track record in developing and commercialising products. Microtech also has several blue-chip backers such as Tencent (700 HK), Taikang, Lilly AsiaVentures, Qiming Venture Partners, IDG Capital, 3H Health and CICC Pucheng. 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 market share from its 3% market 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. Overall, we believe that Microtech is worth a closer look. We will discuss valuation in our next note. 

MicroTech Medical IPO Initiation: Fighting Diabetes

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)

Moderna (MRNA US): To Cash in on Omicron Fear

Moderna is set to fly high on the continuous increasing demand for its Covid vaccine and rich pipeline beyond Covid. Emerging Omicron variant is...

Tina Banerjee

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

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

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

MicroTech Medical IPO Initiation: Fighting Diabetes

Microtech has launched an HKEx IPO to raise net proceeds of $225 m. Microtech has three categories of commercialised products and is worth a look at.

Arun George

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