Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Capital Markets

Samsung Biologics   / Equity Capital Markets

This Insight finalizes our view of the listing of Samsung BioLogics (SB) using information presented at the company’s roadshow meeting and included in the prospectus. We continue to think that the proposed valuation of US$7 billion is too high based on the risks inherent in management’s long-term forecasts. The company should play a significant role in the growth of biologics globally, and is worth monitoring for opportunities post-listing. We think that a lower valuation of no more than US$5 billion would be interesting.

This Insight finalizes our view of the listing of Samsung BioLogics (SB) using information presented at the company’s roadshow meeting and included in the prospectus. We continue to think that the proposed valuation of US$7 billion is too high based on the risks inherent in management’s long-term forecasts. The company should play a significant role in the growth of biologics globally, and is worth monitoring for opportunities post-listing. We think that a lower valuation of no more than US$5 billion would be interesting.

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Thematic (Sector/Industry)

<ul><li>From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. </li><li>For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.</li><li>Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. </li></ul>

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and medical equipment diverge across the region, and still trail the per capita averages of the 34 OECD member countries. For a shorter-term perspective, over the past five weeks, four Healthcare stocks (Cordlife Group, iX Biopharma, UG Healthcare Corporation &amp; Health Management International) have released Annual Reports whilst a secondary listing (Techcomp Holdings) has released an Interim Report.Within these reports, there are examples of how the Healthcare Sector is adapting to Asia Pacific demographics, maintaining an ongoing focus on Research &amp; Development, monitoring pharmaceutical &amp; food regulation trends, collaborating with communities to build business channels, expansion of production lines and pursuing value chain management in manufacturing and distribution. 

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Samsung BioLogics is quite busy with NDR this week. BioLogics executives are doing their best to justify the proposed valuation for BioLogics IPO. It is not hard to figure out that the proposed valuation is quite inflated given that the company has never made any profit since its inception. Basically, BioLogics is arguing that its bio CMO (contract manufacturing organization) is worth ₩7.1tril and its 50% stake in Bioepis is worth ₩3.5tril. To come up with these valuations, BioLogics has used…

Samsung BioLogics is quite busy with NDR this week. BioLogics executives are doing their best to justify the proposed valuation for BioLogics IPO. It is not hard to figure out that the proposed valuation is quite inflated given that the company has never made any profit since its inception. Basically, BioLogics is arguing that its bio CMO (contract manufacturing organization) is worth ₩7.1tril and its 50% stake in Bioepis is worth ₩3.5tril. To come up with these valuations, BioLogics has used…

3 Main Debatable Points to Be Discussed in Samsung BioLogics NDR This Week

Equity Bottom-Up

Several recent developments confirm our thesis that Inflectra's US sales in 2017 will fall far short of management's 2017 forecast. First, Pfizer's proposed pricing of Inflectra is just below parity with Remicade. Second, the USFDA has pushed back its timeframe for developing a regulatory definition of "interchangeability". Third, physicians continue to express a reluctance to switch patients to biosimilars in the absence of clinical data typical of brand drugs. Further, we think that press reports that Teva (TEVA US) "wouldn't rule out an acquisition of Celltrion" overstate the former's potential interest in the company.The shares trade at 61x 2016E EPS, and "only" 36x 2017's optimistic EPS forecasts.

Several recent developments confirm our thesis that Inflectra's US sales in 2017 will fall far short of management's 2017 forecast. First, Pfizer's proposed pricing of Inflectra is just below parity with Remicade. Second, the USFDA has pushed back its timeframe for developing a regulatory definition of "interchangeability". Third, physicians continue to express a reluctance to switch patients to biosimilars in the absence of clinical data typical of brand drugs. Further, we think that press reports that Teva (TEVA US) "wouldn't rule out an acquisition of Celltrion" overstate the former's potential interest in the company.The shares trade at 61x 2016E EPS, and "only" 36x 2017's optimistic EPS forecasts.  

Event-Driven

How should we interpret Teva's potential acquisition of Celltrion? Is this for real? Well, Teva may still be very interested in acquiring Celltrion since this may be the most effective way to improve its biosimilar business, which is viewed as one of the key growth engines for Teva. But Celltrion's major shareholder may have a different intention on this. Now, let's take a look at this issue more closely.Celltrion gained 7% Tuesday on positive expectations for Inflectra's sales in the US. Pfizer…

How should we interpret Teva's potential acquisition of Celltrion? Is this for real? Well, Teva may still be very interested in acquiring Celltrion since this may be the most effective way to improve its biosimilar business, which is viewed as one of the key growth engines for Teva. But Celltrion's major shareholder may have a different intention on this. Now, let's take a look at this issue more closely.Celltrion gained 7% Tuesday on positive expectations for Inflectra's sales in the US. Pfizer…

Teva May Buy Celltrion - Implications for Celltrion & Celltrion Healthcare

South Korea

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

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Celltrion Inc (068270 KS)

Pass on the Deal, Put on the Watchlist

This Insight finalizes our view of the listing of Samsung BioLogics (SB) using information presented at the company’s roadshow meeting and included...

Kemp Dolliver, CFA

Key Drivers of Asia's Healthcare Sector

From a demand perspective, Asia’s population is growing as is longevity. On the supply side, Asia’s number of doctors, nurses, hospitals and...

Singapore Exchange Ltd (SGX)

3 Main Debatable Points to Be Discussed in Samsung BioLogics NDR This Week

Samsung BioLogics is quite busy with NDR this week. BioLogics executives are doing their best to justify the proposed valuation for BioLogics IPO....

Sanghyun Park

The Chickens Are Ready to Roost

Several recent developments confirm our thesis that Inflectra's US sales in 2017 will fall far short of management's 2017 forecast. First, Pfizer's...

Kemp Dolliver, CFA

Teva May Buy Celltrion - Implications for Celltrion & Celltrion Healthcare

How should we interpret Teva's potential acquisition of Celltrion? Is this for real? Well, Teva may still be very interested in acquiring Celltrion...

Sanghyun Park

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