External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>We have summarized 2Q24 earnings of major overseas CXO and life science upstream (LSU) companies, which engage in clinical CROs, preclinical CROs, C(D)MOs, and LSU fields.</li><li>We find that those companies’ 2023 earnings growth varied across sub-sectors, with later-stage CXOs performing better than earlystage ones and non-manufacturing CXOs outperforming manufacturing ones.</li><li>However, the performance differences among sub-sectors decreased in 1Q24, and continued to narrow in 2Q24, with earnings of LSU and C(D)MO companies performing better than expected. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We have summarized 2Q24 earnings of major overseas CXO and life science upstream (LSU) companies, which engage in clinical CROs, preclinical CROs, C(D)MOs, and LSU fields.We find that those companies’ 2023 earnings growth varied across sub-sectors, with later-stage CXOs performing better than earlystage ones and non-manufacturing CXOs outperforming manufacturing ones.However, the performance differences among sub-sectors decreased in 1Q24, and continued to narrow in 2Q24, with earnings of LSU and C(D)MO companies performing better than expected. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Healthcare - Overseas CXO/ Life Science Upstream 2Q24 Review

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/takara-bio-inc" target="_blank" data-smartkarma-citation="entities:10766:1" rel="noopener">Takara Bio Inc (4974 JP)</a> reported massive decline of 50%, 98%, and 99%, YoY, in revenue, operating profit, and net profit, respectively during the first nine months of FY24.</li>
<li>Reagents revenue decline 56% YoY to ¥23 billion, due to decrease of sales of COVID-19 test-related reagents. Japan, which contributed 23% of reagents revenue, reported revenue decline of 83% YoY.</li>
<li>Takara Bio anticipates a sluggish life science R&amp;D market globally. FY24 revenue, operating profit, and net profit are expected to decline 42%, 85%, and 88%, YoY, respectively.</li>
</ul>



Takara Bio Inc (4974 JP) reported massive decline of 50%, 98%, and 99%, YoY, in revenue, operating profit, and net profit, respectively during the first nine months of FY24.
Reagents revenue decline 56% YoY to ¥23 billion, due to decrease of sales of COVID-19 test-related reagents. Japan, which contributed 23% of reagents revenue, reported revenue decline of 83% YoY.
Takara Bio anticipates a sluggish life science R&amp;D market globally. FY24 revenue, operating profit, and net profit are expected to decline 42%, 85%, and 88%, YoY, respectively.


Takara Bio (4974 JP): Limited Upside Potential Amid Poor Financial Result and Bleak Outlook

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dentium-co-ltd" target="_blank" data-smartkarma-citation="entities:23565:1" rel="noopener">Dentium (145720 KS)</a> earns more than 50% of its total revenue from China. The company’s revenue from China reported a CAGR of 32% during 2018–2022.</li>
<li>Despite concern over China slowdown and lower ASP due to VBP, in 3Q23, Dentium reported 12% YoY revenue growth in China, similar growth rate reported in 2Q23, driven by volume.</li>
<li>Economic slowdown is lingering over the global as well as Chinese dental implant sector, especially the premium brands. Dentium is positioned at the upper price portion within the value segment.  </li>
</ul>



Dentium (145720 KS) earns more than 50% of its total revenue from China. The company’s revenue from China reported a CAGR of 32% during 2018–2022.
Despite concern over China slowdown and lower ASP due to VBP, in 3Q23, Dentium reported 12% YoY revenue growth in China, similar growth rate reported in 2Q23, driven by volume.
Economic slowdown is lingering over the global as well as Chinese dental implant sector, especially the premium brands. Dentium is positioned at the upper price portion within the value segment.  


Dentium (145720 KS): Economic Health of China Is the Key to Bring Back Smiles

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pasona-group-inc" target="_blank" data-smartkarma-citation="entities:15778:1" rel="noopener">Pasona Group (2168 JP)</a> is massively net cash. And it's ofloading <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One Inc (2412 JP)</a>. Though we don't know what the future holds, Pasona is the wrong price.</li>
<li>
<a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a> controlling shreholder announced it intends to increase it stake. And it's been in the market almost everry day since the interims. </li>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-expressway-co-h" target="_blank" data-smartkarma-citation="entities:2178:1" rel="noopener">Zhejiang Expressway (576 HK)</a> announced its rights offering. It's at a long-term low price, and about to earn a long-term high net income, and have a long-term high payout ratio</li>
</ul>



Pasona Group (2168 JP) is massively net cash. And it's ofloading Benefit One Inc (2412 JP). Though we don't know what the future holds, Pasona is the wrong price.

ENN Energy (2688 HK) controlling shreholder announced it intends to increase it stake. And it's been in the market almost everry day since the interims. 

Zhejiang Expressway (576 HK) announced its rights offering. It's at a long-term low price, and about to earn a long-term high net income, and have a long-term high payout ratio


Last Week in Event SPACE: Zhejiang, Pasona, ENN Energy, Asahi Group, Azure Minerals

European Event-Driven Analyst

Jesus Rodriguez Aguilar

<ul>
<li>Shareholders of Cambridge (UK)-based  <a href="https://www.smartkarma.com/entities/abcam-plc-fdbd66c6-5b3f-46b0-9e33-c7c79214544f" target="_blank" data-smartkarma-citation="entities:38641:1" rel="noopener">Abcam (ABCM US)</a> followed Glass Lewis and ISS recommendations and approved (&gt;84%) the scheme resolutions at both the Court Meeting and the GM.</li>
<li>The $24/share cash offer represents 10x EV/Fwd Revenue, 25x EV/Fwd NTM EBITDA. <a href="https://www.smartkarma.com/entities/danaher-corp" target="_blank" data-smartkarma-citation="entities:8243:1" rel="noopener">Danaher Corp (DHR US)</a> and Abcam have guided that the transaction is expected to close by mid-2024.</li>
<li>Spread is 3.21%/6.21% (gross/annualised, assuming settlement by 30 May). From the current levels, I see a balanced risk/reward.</li>
</ul>


Shareholders of Cambridge (UK)-based  Abcam (ABCM US) followed Glass Lewis and ISS recommendations and approved (&gt;84%) the scheme resolutions at both the Court Meeting and the GM.
The $24/share cash offer represents 10x EV/Fwd Revenue, 25x EV/Fwd NTM EBITDA. Danaher Corp (DHR US) and Abcam have guided that the transaction is expected to close by mid-2024.
Spread is 3.21%/6.21% (gross/annualised, assuming settlement by 30 May). From the current levels, I see a balanced risk/reward.


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 Corp (DHR US)

China Healthcare - Overseas CXO/ Life Science Upstream 2Q24 Review

We have summarized 2Q24 earnings of major overseas CXO and life science upstream (LSU) companies, which engage in clinical CROs, preclinical CROs,...

CMB International

Takara Bio (4974 JP): Limited Upside Potential Amid Poor Financial Result and Bleak Outlook

Takara Bio reports massive declines in sales and profit in 9MFY24, due to decrease of sales of COVID testing reagents. Company anticipates...

Tina Banerjee

Dentium (145720 KS): Economic Health of China Is the Key to Bring Back Smiles

In 3Q23, Dentium reported 12% YoY revenue growth from China, which represents 50%+ of total revenue. With value segment focus, Dentium is less...

Tina Banerjee

Last Week in Event SPACE: Zhejiang, Pasona, ENN Energy, Asahi Group, Azure Minerals

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Danaher/Abcam: Balanced Risk/Return

Shareholders of Abcam approve scheme resolutions, with a $24/share cash offer from Danaher Corp expected to close mid-2024. Balanced risk/reward...

Jesus Rodriguez Aguilar

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52-week Range

Market Cap (USDm)

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China Healthcare - Overseas CXO/ Life Science Upstream 2Q24 Review

We have summarized 2Q24 earnings of major overseas CXO and life science upstream (LSU) companies, which engage in clinical CROs, preclinical CROs,...

CMB International

Takara Bio (4974 JP): Limited Upside Potential Amid Poor Financial Result and Bleak Outlook

​Takara Bio reports massive declines in sales and profit in 9MFY24, due to decrease of sales of COVID testing reagents. Company anticipates...

Tina Banerjee

Dentium (145720 KS): Economic Health of China Is the Key to Bring Back Smiles

​In 3Q23, Dentium reported 12% YoY revenue growth from China, which represents 50%+ of total revenue. With value segment focus, Dentium is less...

Tina Banerjee

Last Week in Event SPACE: Zhejiang, Pasona, ENN Energy, Asahi Group, Azure Minerals

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Danaher/Abcam: Balanced Risk/Return

​Shareholders of Abcam approve scheme resolutions, with a $24/share cash offer from Danaher Corp expected to close mid-2024. Balanced risk/reward...

Jesus Rodriguez Aguilar

Takara Bio reports massive declines in sales and profit in 9MFY24, due to decrease of sales of COVID testing reagents. Company anticipates...

In 3Q23, Dentium reported 12% YoY revenue growth from China, which represents 50%+ of total revenue. With value segment focus, Dentium is less...

Shareholders of Abcam approve scheme resolutions, with a $24/share cash offer from Danaher Corp expected to close mid-2024. Balanced risk/reward...