HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Angelalign Technology  / Equity Bottom-Up

<ul>
<li>Due to pandemic/lockdown/economic downturn, the case shipments could further decline. Our revenue forecast this year is below 20%, or even below 15%. We also lowered our forecast on profit margins.</li>
<li>Limited qualified orthodontists in China and challenging internationalization cast doubts on Angelalign’s long term growth prospects. We can’t see high growth potential of Angelalign with certainty.</li>
<li>Angelalign’s performance in 2022 would be under pressure. Although PE/TTM reached about 73 by the end of June 10 after corrections, it's still overvalued. The upside potential could be limited.</li>
</ul>


Due to pandemic/lockdown/economic downturn, the case shipments could further decline. Our revenue forecast this year is below 20%, or even below 15%. We also lowered our forecast on profit margins.
Limited qualified orthodontists in China and challenging internationalization cast doubts on Angelalign’s long term growth prospects. We can’t see high growth potential of Angelalign with certainty.
Angelalign’s performance in 2022 would be under pressure. Although PE/TTM reached about 73 by the end of June 10 after corrections, it's still overvalued. The upside potential could be limited.


Angelalign Technology (6699.HK) - There Is Still Plenty of Downside, but Limited Upside Potential

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/align-technology-inc" target="_blank" data-smartkarma-citation="entities:2817:1" rel="noopener">Align Technology (ALGN US)</a> reported underwhelming Q1 results. Both revenue and earnings missed consensus and were down sequentially.</li>
<li>Sequential results primarily reflect lower volumes mainly due to continued impact of the COVID-19 causing lesser patient traffic and practice closure.</li>
<li>Due to increased uncertainty across all its operating markets, the company suspended 2022 revenue guidance. Earlier, Align guided for 20–30% y/y revenue growth in 2022.</li>
</ul>



Align Technology (ALGN US) reported underwhelming Q1 results. Both revenue and earnings missed consensus and were down sequentially.
Sequential results primarily reflect lower volumes mainly due to continued impact of the COVID-19 causing lesser patient traffic and practice closure.
Due to increased uncertainty across all its operating markets, the company suspended 2022 revenue guidance. Earlier, Align guided for 20–30% y/y revenue growth in 2022.


Align Technology (ALGN US) Q1 Results: Both Revenue and Earnings Miss, First Time in Last Two Years

<ul>
<li>
<a href="https://www.smartkarma.com/entities/align-technology-inc" target="_blank" data-smartkarma-citation="entities:2817:1" rel="noopener">Align Technology (ALGN US)</a> is better investment idea than its Chinese competitor <a href="https://www.smartkarma.com/entities/angelalign-technology-inc" target="_blank" data-smartkarma-citation="entities:31480:1" rel="noopener">Angelalign Technology (6699 HK),</a> due to its larger global scale of operation, early mover advantage, and cheaper valuation.    </li>
<li>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.</li>
<li>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.</li>
</ul>



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.


Align Technology (ALGN US) Vs. Angelalign Technology (6699 HK): Which One Is Better Investment

<ul>
<li>Currently, Angelalign could not be compared with Align Technology in many aspects, but Angelalign’s PE/TTM indicates it may have already overdrawn the performance of the next few years.</li>
<li>The growth outlook of Angelalign has uncertainties. Any deceleration in revenues and profits in any given year is likely to lead to a significant valuation correction. </li>
<li>High valuation cannot be supported without certainty of growth. Therefore, based on our analysis, our view is that Angelalign could be a short-term trade, but not long-term hold.</li>
</ul>


Currently, Angelalign could not be compared with Align Technology in many aspects, but Angelalign’s PE/TTM indicates it may have already overdrawn the performance of the next few years.
The growth outlook of Angelalign has uncertainties. Any deceleration in revenues and profits in any given year is likely to lead to a significant valuation correction. 
High valuation cannot be supported without certainty of growth. Therefore, based on our analysis, our view is that Angelalign could be a short-term trade, but not long-term hold.


Angelalign Technology (6699.HK) - Uncertain Growth Outlook

<p>The IPO of <a href="https://www.smartkarma.com/entities/angelalign-technology-inc" target="_blank" data-smartkarma-citation="entities:31480:1" rel="noopener">Angelalign Technology (6699 HK)</a> was obviously very successful, with the share price hitting an all-time high of HK$490/share in June 2021. However, in the following months, Angelalign’s share price continued to fall and was closed at HK$318.8/share on Oct. 25, down about 35%. On the other hand, Angelalign released it 2021 interim report. The revenue in 2021/1H was RMB571 million, up 85.0% YoY, and the net profit was RMB95.7 million, up 55.8% YoY, indicating good growth momentum. This insight mainly analyzed some points about the business and the concerns that worth investors’ attention.</p>

The IPO of Angelalign Technology (6699 HK) was obviously very successful, with the share price hitting an all-time high of HK$490/share in June 2021. However, in the following months, Angelalign’s share price continued to fall and was closed at HK$318.8/share on Oct. 25, down about 35%. On the other hand, Angelalign released it 2021 interim report. The revenue in 2021/1H was RMB571 million, up 85.0% YoY, and the net profit was RMB95.7 million, up 55.8% YoY, indicating good growth momentum. This insight mainly analyzed some points about the business and the concerns that worth investors’ attention.

Angelalign Technology (6699.HK) - Some Points Worth the Attention

United States

Align Technology, Inc. designs, manufactures, and markets the Invisalign System, a method for treating the misalignment of teeth.  The Company's system corrects the misalignment using a series of clear, removable appliances that move teeth to a desired final position.

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Align Technology (ALGN US)

Angelalign Technology (6699.HK) - There Is Still Plenty of Downside, but Limited Upside Potential

Shortage of orthodontists/weak internationalization largely limit Angelalign's growth potential.Pandemic/lockdown/economic downturn will put...

Xinyao (Criss) Wang