Global Healthcare Analyst

Tina Banerjee

Thematic (Sector/Industry)

<ul>
<li>Hengrui Pharmaceuticals entered license agreements with BMS to advance 13 early-stage programs in oncology, hematology, and immunology. Sino Biopharmaceutical entered exclusive strategic collaboration with GlaxoSmithKline for Hepatitis B drug bepirovisen.</li>
<li>BeOne received FDA approval for Beqalzi for the treatment of mantle cell lymphoma. Otsuka’s subsidiary, Taiho Pharmaceutical secured FDA approval for Inqovi plus venetoclax for newly diagnosed acute myeloid leukemia.</li>
<li>Celltrion has acquired Gifrer, a 114-year-old local healthcare company in France. Bora Pharmaceuticals will acquire GMP manufacturing operations, including the CDMO business, of MacroGenics for $122.5M.</li>
</ul>


Hengrui Pharmaceuticals entered license agreements with BMS to advance 13 early-stage programs in oncology, hematology, and immunology. Sino Biopharmaceutical entered exclusive strategic collaboration with GlaxoSmithKline for Hepatitis B drug bepirovisen.
BeOne received FDA approval for Beqalzi for the treatment of mantle cell lymphoma. Otsuka’s subsidiary, Taiho Pharmaceutical secured FDA approval for Inqovi plus venetoclax for newly diagnosed acute myeloid leukemia.
Celltrion has acquired Gifrer, a 114-year-old local healthcare company in France. Bora Pharmaceuticals will acquire GMP manufacturing operations, including the CDMO business, of MacroGenics for $122.5M.


APAC Healthcare Weekly (May 17) – Hengrui, Sino Bio, BeOne, Otsuka, Celltrion, Bora Pharmaceuticals

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Email: services@yellowstoneequity.com
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Equity Bottom-Up

HealthCare Global Enterprises / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/healthcare-global-enterprises-limited" target="_blank" data-smartkarma-citation="entities:23983:1" rel="noopener">HealthCare Global Enterprises ("HCG")</a> reported a strong Q2FY26 with 17%+ YoY revenue growth in cancer care. Cancer care EBITDA grew 18% YoY with adjusted EBITDA margin expanding 24bp YoY.</li>
<li>However, led by the new promoter, HCG is embarking on an expansion spree entailing capex of INR 1000cr+ over 5Y towards addition of 1000 beds and new LINAC machines.</li>
<li>While the expansion entails 700 brownfield beds and only 300 greenfield beds, we believe it is aggressive, and with rising competition, it could lead to sub-optimal outcomes.</li>
</ul>



HealthCare Global Enterprises ("HCG") reported a strong Q2FY26 with 17%+ YoY revenue growth in cancer care. Cancer care EBITDA grew 18% YoY with adjusted EBITDA margin expanding 24bp YoY.
However, led by the new promoter, HCG is embarking on an expansion spree entailing capex of INR 1000cr+ over 5Y towards addition of 1000 beds and new LINAC machines.
While the expansion entails 700 brownfield beds and only 300 greenfield beds, we believe it is aggressive, and with rising competition, it could lead to sub-optimal outcomes.


HCG: New Capex Plan Appears Sub-Optimal - Change in Recommendation to SELL

<ul>
<li>In line with our thesis, HCG has been scaling up well led by rapid growth in emerging centers. Established centers are also growing at a steady pace.  </li>
<li>With scale, profitability is normalizing. Over the next two years, we project the EBITDA to grow at 25% CAGR led by margin expansion and volume growth.</li>
<li>Utilization on like to like basis came in at 76% in Q1FY26 vs 69% in FY25. ARPOB has been steady at around INR 45000.</li>
</ul>


In line with our thesis, HCG has been scaling up well led by rapid growth in emerging centers. Established centers are also growing at a steady pace.  
With scale, profitability is normalizing. Over the next two years, we project the EBITDA to grow at 25% CAGR led by margin expansion and volume growth.
Utilization on like to like basis came in at 76% in Q1FY26 vs 69% in FY25. ARPOB has been steady at around INR 45000.


Healthcare Global (HCG): Next Two Years Look Promising

<ul>
<li>
<a href="https://www.smartkarma.com/entities/healthcare-global-enterprises-limited" target="_blank" data-smartkarma-citation="entities:23983:1" rel="noopener">HCG</a>  continues to scale up well with the emerging centers reporting 32% YoY revenue growth in Q4FY25. Q4FY25 revenue from established centers also grew strong at 22% YoY.</li>
<li>International footfalls have resumed strong, led by which the revenue in the South Mumbai center grew 38% YoY. Revenue in Kolkata center also grew well at 22% YoY.</li>
<li>HCG has been in consolidation phase over the last four years. Now, the next two years should witness strong growth in profitability, led by margin expansion and continued volume growth.</li>
</ul>



HCG  continues to scale up well with the emerging centers reporting 32% YoY revenue growth in Q4FY25. Q4FY25 revenue from established centers also grew strong at 22% YoY.
International footfalls have resumed strong, led by which the revenue in the South Mumbai center grew 38% YoY. Revenue in Kolkata center also grew well at 22% YoY.
HCG has been in consolidation phase over the last four years. Now, the next two years should witness strong growth in profitability, led by margin expansion and continued volume growth.


Healthcare Global (HCG): Beyond Consolidation Now, Next Two Years Could Be Strong

<ul>
<li>Simcere entered outlicensing agreement with Boehringer Ingelheim for IBD drug candidate SIM0709 for upfront payment of €42M. CSPC entered collaboration and license agreement with AstraZeneca for upfront payment of $1.2B.</li>
<li>Hanmi Pharm signs exclusive Mexico distribution deal for GLP-1 obesity drug efpeglenatide. HK inno.N will be launching 'X1 Plus Tablet', a triple antihypertensive drug for the first time in Korea.</li>
<li>Eisai’s Leqembi autoinjector is now under FDA review as weekly starting dose, with target action date of May 24. Chugai Pharmaceutical filed for additional indication of Tecentriq for bladder cancer.</li>
</ul>


Simcere entered outlicensing agreement with Boehringer Ingelheim for IBD drug candidate SIM0709 for upfront payment of €42M. CSPC entered collaboration and license agreement with AstraZeneca for upfront payment of $1.2B.
Hanmi Pharm signs exclusive Mexico distribution deal for GLP-1 obesity drug efpeglenatide. HK inno.N will be launching 'X1 Plus Tablet', a triple antihypertensive drug for the first time in Korea.
Eisai’s Leqembi autoinjector is now under FDA review as weekly starting dose, with target action date of May 24. Chugai Pharmaceutical filed for additional indication of Tecentriq for bladder cancer.


APAC Healthcare Weekly (February 1) – Simcere, CSPC, Hanmi Pharm, HK Inno.N, Eisai, Chugai Pharma

India

HealthCare Global Enterprises Limited provides medical and surgical hospital services. The Hospital offers cancer care, chemotherapy, cyberknife surgery, surgical, radiation, and medical oncology services. HealthCare Global Enterprises operates worldwide.

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HealthCare Global Enterprises (HCG IN)

APAC Healthcare Weekly (May 17) – Hengrui, Sino Bio, BeOne, Otsuka, Celltrion, Bora Pharmaceuticals

Hengrui stuck licensing agreement with BMS. Sino Bio enters exclusive collaboration with GSK. BeOne got FDA approval for new drug. Bora will...

Tina Banerjee

HCG: New Capex Plan Appears Sub-Optimal - Change in Recommendation to SELL

HCG's new strategy, led by its new promoter KKR, entails significant capex. Our thesis had been hinged on consolidation and operating leverage, but...

Ankit Agrawal, CFA

Healthcare Global (HCG): Next Two Years Look Promising

HCG is executing well led by organic growth and strategic acquisitions. The next couple of years look promising with EBITDA likely to grow at 25%...

Ankit Agrawal, CFA

Healthcare Global (HCG): Beyond Consolidation Now, Next Two Years Could Be Strong

HCG is scaling up well led by prudent acquisition and growth in emerging centers. The next two years should witness strong growth in profitability...

Ankit Agrawal, CFA

APAC Healthcare Weekly (February 1) – Simcere, CSPC, Hanmi Pharm, HK Inno.N, Eisai, Chugai Pharma

CSPC and Simcere signed outlicensing deals with AstraZeneca and Boehringer Ingelheim, respectively. Eisai’s Leqembi autoinjector is now under FDA...

Tina Banerjee

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