Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Boryung Pharmaceutical / Equity Bottom-Up

<ul>
<li>In 3Q23, <a href="https://www.smartkarma.com/entities/boryung-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:19265:1" rel="noopener">Boryung Pharmaceutical (003850 KS)</a> reported 15% YoY growth in revenue to KRW208B, driven by 7% YoY growth in prescription drugs, the slowest growth in the last three years.</li>
<li>Prescription drug revenue growth slowed due to the huge shortfall in revenue from the diabetes drug Trulicity caused by supply shortage. We expect slowdown in Trulicity revenue is temporary.  </li>
<li>Despite losing patent protection in February 2023 on ARB monotherapy, Kanarb drug family is showing no fatigue due to increasing preference for combination drugs in the market.  </li>
</ul>


In 3Q23, Boryung Pharmaceutical (003850 KS) reported 15% YoY growth in revenue to KRW208B, driven by 7% YoY growth in prescription drugs, the slowest growth in the last three years.
Prescription drug revenue growth slowed due to the huge shortfall in revenue from the diabetes drug Trulicity caused by supply shortage. We expect slowdown in Trulicity revenue is temporary.  
Despite losing patent protection in February 2023 on ARB monotherapy, Kanarb drug family is showing no fatigue due to increasing preference for combination drugs in the market.  


Boryung Pharmaceutical (003850 KS): Prescription Drugs Took a Breather in Q3; Poised to Rebound

<ul>
<li>
<a href="https://www.smartkarma.com/entities/boryung-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:19265:1" rel="noopener">Boryung Pharmaceutical (003850 KS)</a> reported strong 2Q23 result, with revenue increasing 19% YoY to a record high of KRW216 billion, driven by 24% YoY growth in prescription drugs.</li>
<li>H1 2023 revenue and net profit progressed 52% and 62% of the annual target, respectively, marking the fastest semi-annual lap ever to annual target.</li>
<li>Boryung has reiterated guidance for 2023 revenue and operating profit of KRW810 billion and KRW61 billion, representing growth of 12% and 1%, YoY, respectively.</li>
</ul>



Boryung Pharmaceutical (003850 KS) reported strong 2Q23 result, with revenue increasing 19% YoY to a record high of KRW216 billion, driven by 24% YoY growth in prescription drugs.
H1 2023 revenue and net profit progressed 52% and 62% of the annual target, respectively, marking the fastest semi-annual lap ever to annual target.
Boryung has reiterated guidance for 2023 revenue and operating profit of KRW810 billion and KRW61 billion, representing growth of 12% and 1%, YoY, respectively.


Boryung Pharmaceutical (003850 KS): 2Q23 Marks Six Consecutive Quarters of Revenue Growth

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hk-inno-n-corp" target="_blank" data-smartkarma-citation="entities:33522:1" rel="noopener">HK inno.N (195940 KS)</a> is expected to see significant improvement in operating profit margin this year to 10.9% (vs. 8% in 2023).</li>
<li>Growing sales of flagship drug K-CAB, increasing capacity utilization in new IV fluids plant, and improving profitability of health and beauty products segment, will be three important margin drivers.</li>
<li>With accelerating global presence, HK inno is on track to achieve its target of entering 100 countries by 2028 and achieve global sales of KRW2 trillion ($1.4 billion) by 2030.</li>
</ul>



HK inno.N (195940 KS) is expected to see significant improvement in operating profit margin this year to 10.9% (vs. 8% in 2023).
Growing sales of flagship drug K-CAB, increasing capacity utilization in new IV fluids plant, and improving profitability of health and beauty products segment, will be three important margin drivers.
With accelerating global presence, HK inno is on track to achieve its target of entering 100 countries by 2028 and achieve global sales of KRW2 trillion ($1.4 billion) by 2030.


HK Inno.N (195940 KS): 2024 Will See Robust Profit Growth On Growing Momentum of Key Drug

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>
Kum Yang and Youlchon Chemical are within the borderline for inclusion, whereas Hwaseung Enterprise and K Car are in the deletion zone.</li>
<li>Since the review period has reached 75%, it seems reasonable to consider a somewhat aggressive buildup for them.</li>
<li>We can also consider setting up preemptive positions only for Kum Yang and Hwaseung Enterprise and then sequentially look for entry opportunities for Youlchon and K Car later on.</li>
</ul>



Kum Yang and Youlchon Chemical are within the borderline for inclusion, whereas Hwaseung Enterprise and K Car are in the deletion zone.
Since the review period has reached 75%, it seems reasonable to consider a somewhat aggressive buildup for them.
We can also consider setting up preemptive positions only for Kum Yang and Hwaseung Enterprise and then sequentially look for entry opportunities for Youlchon and K Car later on.


Names for a Preemptive Long Short Setup for KOSPI 200 June Rebalancing

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

HDC Hyundai Development Co-Engineering & Construction / Event-Driven

HDC Hyundai Development Co-Engineering & Construction

<ul>
<li>There will be 7 additions and 7 deletions for the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY)</a> at the December rebalance that will be implemented on 14 December.</li>
<li>The rebalance is on expected lines, though the index committee decided not to add <a href="https://www.smartkarma.com/entities/youngpoong-paper-mfg-co-ltd" target="_blank" data-smartkarma-citation="entities:3467:1" rel="noopener">Youngpoong Paper (006740 KS)</a> to the index. Not really a big surprise given the price move.</li>
<li>
<a href="https://www.smartkarma.com/entities/hdc-hyundai-development-co-engineering-construction" target="_blank" data-smartkarma-citation="entities:27397:1" rel="noopener">HDC Hyundai Development Co-Engineering &amp; Construction (294870 KS)</a> is a surprise delete and there is not much short interest that could cover against the passive selling.</li>
</ul>


There will be 7 additions and 7 deletions for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX EQUITY) at the December rebalance that will be implemented on 14 December.
The rebalance is on expected lines, though the index committee decided not to add Youngpoong Paper (006740 KS) to the index. Not really a big surprise given the price move.

HDC Hyundai Development Co-Engineering &amp; Construction (294870 KS) is a surprise delete and there is not much short interest that could cover against the passive selling.


KOSPI200 Index Rebalance: Mostly Expected Though Some Discretion Used

South Korea

Boryung Pharmaceutical Co., Ltd. produces over-the-counter medical drugs. The Company specializes in producing medicines in the fields of hypertension treatment and anti-viral.

Boryung Pharmaceutical (003850 KS)