Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

<ul>
<li>I seldom touched those unpredicatble biotech stocks, but Bioventix is an exception;</li>
<li>The company provides a bond-like cash streams for its owners, through a well-moated, highly predictable business model;</li>
<li>Although it is not clear whether the share can offer a 20% total return at this price level, I see a high chance for it to outperform the market benchmark with a limited downside from here in the long run.</li>
</ul>


I seldom touched those unpredicatble biotech stocks, but Bioventix is an exception;
The company provides a bond-like cash streams for its owners, through a well-moated, highly predictable business model;
Although it is not clear whether the share can offer a 20% total return at this price level, I see a high chance for it to outperform the market benchmark with a limited downside from here in the long run.


Bioventix: A Rare Biotech Play with a Low-Risk, High-Return Model

Alpha-Centric ESG Research

Kyle Rudden

U.S. President-Elect Joe Biden recently announced four "Day One" priorities for his administration. The first of those priorities is an aggressive seven-point COVID-19 response plan, the first point of which is COVID-19 testing. Testing is Biden's near-term focus, and testing stocks stand to gain.As noted in <a href="https://www.smartkarma.com/insights/biden-covid-19-response-plan-overview-of-its-inherent-investment-themes" target="_blank" data-smartkarma-citation="insights:45631" rel="noopener">Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes</a>, testing stocks represent the largest, most tangible, and nearest-term investment opportunity amongst the various themes inherent in Biden's COVID-19 plan (summarised in the Insight linked to above).Don't just back up the truck, however. The plan could be boon for testing stocks,  but it is harldy a "rising tide lifts all boats" scenario. It creates a window of upside for some of testing stocks, though not all, and it's a brief window replete with nuances and caveats. Selectivity and timing are key.This Insight presents an investment thesis for the COVID-19 testing stock theme, specifically vis-à-vis the details of the plan. It consists of two phases (time horizons), and two types of stocks:<ol>
<li>
Nearer-Term: Focus on diagnostic (versus antibody) testing stocks, especially those whose tests have fit best with Biden's "rapid deployment, rapid results" testing strategy. For example, rapid antigent tests, others with fast time-to-results, point-of-care and at-home collection, etc.</li>
<li>
Medium-Term: COVID-19 vaccine progress is a major catalyst for this theme. Vaccines will not end testing altogether (at least not soon), but as mass-vaccination becomes more reality than a dream, it would be wise to shift out of from diagnostic stocks into antibody testing stocks.</li>
</ol>

U.S. President-Elect Joe Biden recently announced four "Day One" priorities for his administration. The first of those priorities is an aggressive seven-point COVID-19 response plan, the first point of which is COVID-19 testing. Testing is Biden's near-term focus, and testing stocks stand to gain.As noted in Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes, testing stocks represent the largest, most tangible, and nearest-term investment opportunity amongst the various themes inherent in Biden's COVID-19 plan (summarised in the Insight linked to above).Don't just back up the truck, however. The plan could be boon for testing stocks,  but it is harldy a "rising tide lifts all boats" scenario. It creates a window of upside for some of testing stocks, though not all, and it's a brief window replete with nuances and caveats. Selectivity and timing are key.This Insight presents an investment thesis for the COVID-19 testing stock theme, specifically vis-à-vis the details of the plan. It consists of two phases (time horizons), and two types of stocks:

Nearer-Term: Focus on diagnostic (versus antibody) testing stocks, especially those whose tests have fit best with Biden's "rapid deployment, rapid results" testing strategy. For example, rapid antigent tests, others with fast time-to-results, point-of-care and at-home collection, etc.

Medium-Term: COVID-19 vaccine progress is a major catalyst for this theme. Vaccines will not end testing altogether (at least not soon), but as mass-vaccination becomes more reality than a dream, it would be wise to shift out of from diagnostic stocks into antibody testing stocks.


Biden COVID-19 Response Plan: Its Largest Near-Term Opportunity Is In Testing Stocks

The Biden-Harris administration recently announced four "Day One" priorities, the first of which is their COVID-19 response plan. COVID-19 response is first, because it is a prerequisite to economic recovery, which is the second of their four "Day One" priorities.Several investment themes are inherent in Biden's COVID-19 plan, some more direct and obvious than others. This Insight overviews more significant themes and their most representative stocks, in three sections (the first two will be expanded on in separate upcoming reports):<ol>
<li>
COVID-19 Testing: Testing is the largest, most tangible, nearest-term investment opportunity created by Biden's plan. An estimated US$75-100 billion for testing could be windfall for certain stocks, but not all. Selectivity is key, and timing is critical (related to vaccine development).</li>
<li>
Vaccine Delivery: Biden's plan emphasises vaccine manufacturing and delivery, versus vaccine development (Trump had allocated <a href="https://www.hhs.gov/coronavirus/explaining-operation-warp-speed/index.html" target="_blank" rel="noopener">billions</a> to vaccine development companies). Some might go to big pharma companies for M&amp;D, but most should benefit other "cold chain" stocks.</li>
<li>
PPE Supply/Other: PPE manufacturing, of course, but that is largely old news. I will address it, but do so along with other more interesting collateral themes. For example, retail drugs chains, elder-care, medical technologies, and a few other related industries.</li>
</ol>

The Biden-Harris administration recently announced four "Day One" priorities, the first of which is their COVID-19 response plan. COVID-19 response is first, because it is a prerequisite to economic recovery, which is the second of their four "Day One" priorities.Several investment themes are inherent in Biden's COVID-19 plan, some more direct and obvious than others. This Insight overviews more significant themes and their most representative stocks, in three sections (the first two will be expanded on in separate upcoming reports):

COVID-19 Testing: Testing is the largest, most tangible, nearest-term investment opportunity created by Biden's plan. An estimated US$75-100 billion for testing could be windfall for certain stocks, but not all. Selectivity is key, and timing is critical (related to vaccine development).

Vaccine Delivery: Biden's plan emphasises vaccine manufacturing and delivery, versus vaccine development (Trump had allocated billions to vaccine development companies). Some might go to big pharma companies for M&amp;D, but most should benefit other "cold chain" stocks.

PPE Supply/Other: PPE manufacturing, of course, but that is largely old news. I will address it, but do so along with other more interesting collateral themes. For example, retail drugs chains, elder-care, medical technologies, and a few other related industries.


Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

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.

Event-Driven

<a href="https://www.smartkarma.com/entities/qiagen-nv" target="_blank" data-smartkarma-citation="entities:26865:1" rel="noopener">QIAGEN NV (QIA GY)</a> shares have gone from strength to strength with the stock trading above terms and then receiving a bump bid late last week. <a href="https://www.smartkarma.com/entities/thermo-fisher-scientific-inc-49322cfa-b354-4c3d-ac3b-f4e91aead32b" target="_blank" data-smartkarma-citation="entities:26834:1" rel="noopener">Thermo Fisher (TMO UN)</a> raised its bid on Qiagen by 900 million euros (1bn USD) to 43 euros per share. This represents a c10% increase in the bid price. In addition, Thermo Fisher has reduced the minimum acceptance threshold to 66.67% of outstanding ordinary share capital from 75%, while extending the deal deadline by two weeks until August 10. Prominent hedge fund Davidson Kempner said it would still reject the offer and noted a price of between 48-52 euros would be appropriate. (Source: Reuters)  Indeed, Qiagen, a biotech company that makes products related to coronavirus testing, has seen a swelling of demand for its products and also recently upgraded its earnings forecasts. We give our updated view on Qiagen below the fold. Our previous positive research on the deal can be viewed here:<a href="https://www.smartkarma.com/insights/feedback-from-qiagen-ir-regarding-thermo-fisher-deal" target="_blank" data-smartkarma-citation="insights:37771" rel="noopener">Feedback from Qiagen IR Regarding Thermo Fisher Deal</a> <a href="https://www.smartkarma.com/insights/thermofisher-bids-for-qiagen-a-covid-19-pivot" target="_blank" data-smartkarma-citation="insights:37556" rel="noopener">Thermofisher Bids for Qiagen - A COVID-19 Pivot?</a>

QIAGEN NV (QIA GY) shares have gone from strength to strength with the stock trading above terms and then receiving a bump bid late last week. Thermo Fisher (TMO UN) raised its bid on Qiagen by 900 million euros (1bn USD) to 43 euros per share. This represents a c10% increase in the bid price. In addition, Thermo Fisher has reduced the minimum acceptance threshold to 66.67% of outstanding ordinary share capital from 75%, while extending the deal deadline by two weeks until August 10. Prominent hedge fund Davidson Kempner said it would still reject the offer and noted a price of between 48-52 euros would be appropriate. (Source: Reuters)  Indeed, Qiagen, a biotech company that makes products related to coronavirus testing, has seen a swelling of demand for its products and also recently upgraded its earnings forecasts. We give our updated view on Qiagen below the fold. Our previous positive research on the deal can be viewed here:Feedback from Qiagen IR Regarding Thermo Fisher Deal Thermofisher Bids for Qiagen - A COVID-19 Pivot? 

Qiagen/Thermo Fisher: Qiagen Gets a Bump – Is It Enough to Satisfy Shareholders?

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vontier-corp" target="_blank" data-smartkarma-citation="entities:28857:1" rel="noopener">Vontier Corp (VNT US)</a> is a carve-out of <a href="https://www.smartkarma.com/entities/fortive-corp" target="_blank" data-smartkarma-citation="entities:26508:1" rel="noopener">Fortive Corp (FTV US)</a>'s mobility infrastructure business. Vontier Corp is getting ready for an IPO in the next few weeks. Goldman Sachs is the sole underwriter in this deal. So far, no pricing terms have been disclosed but it is estimated that the company could raise as much as <a href="https://www.nasdaq.com/articles/fortive-spin-out-vontier-files-for-an-estimated-%241-billion-ipo-2020-02-14" target="_blank" rel="noopener">$1 billion.</a>
</li>
<li><div class="content-highlight">
Vontier Corp provides numerous equipment, software, and services that aim to service the mobility infrastructure industry worldwide. The company supplies numerous solutions including advanced environmental sensors, fueling equipment, field payment hardware, remote management and workflow software, vehicle tracking and fleet management software solutions. </div></li>
<li>The company generated sales of $2.8 billion in 2019, up 4% YoY. From 2015 to 2019, its sales increased by 5.4% CAGR. From 2015 to 2019, the company generated a stable and relatively high average operating margin of 19.2%. 
</li>
</ul>



Vontier Corp (VNT US) is a carve-out of Fortive Corp (FTV US)'s mobility infrastructure business. Vontier Corp is getting ready for an IPO in the next few weeks. Goldman Sachs is the sole underwriter in this deal. So far, no pricing terms have been disclosed but it is estimated that the company could raise as much as $1 billion.


Vontier Corp provides numerous equipment, software, and services that aim to service the mobility infrastructure industry worldwide. The company supplies numerous solutions including advanced environmental sensors, fueling equipment, field payment hardware, remote management and workflow software, vehicle tracking and fleet management software solutions. 
The company generated sales of $2.8 billion in 2019, up 4% YoY. From 2015 to 2019, its sales increased by 5.4% CAGR. From 2015 to 2019, the company generated a stable and relatively high average operating margin of 19.2%. 



United States

Danaher Corporation designs, manufactures, and markets professional, medical, industrial and commercial products, and services in the sectors of test and measurement, environmental, life sciences, dental, and industrial technologies.

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Danaher (DHR UN)

Bioventix: A Rare Biotech Play with a Low-Risk, High-Return Model

Although it is not clear whether this bond proxy can offer a 20% total return at this level, I see a high chance for it to outperform the benchmark...

Steven Chen

Biden COVID-19 Response Plan: Its Largest Near-Term Opportunity Is In Testing Stocks

COVID-19 testing stocks represent the largest, most tangible, and nearest-term investment opportunity inherent in Biden's recently-announced COVID...

Kyle Rudden

Biden COVID-19 Response Plan: Overview of Its Inherent Investment Themes

Biden's recently-announced COVID-19 response plan suggests a number of investment themes. This Insight overviews the more significant of those...

Kyle Rudden

Qiagen/Thermo Fisher: Qiagen Gets a Bump – Is It Enough to Satisfy Shareholders?

QIAGEN NV (QIA GY) shares have gone from strength to strength with the stock trading above terms and then receiving a bump bid late last week....

Rickin Thakrar

Vontier Corp IPO Preview

Vontier Corp (VNT US) is a carve-out of Fortive Corp (FTV US)'s mobility infrastructure business. Vontier Corp is getting ready for an IPO in the...

Douglas Kim

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