Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>The med-tech sector is ripe for consolidation. Smaller players like <a href="https://www.smartkarma.com/entities/hogy-medical-co-ltd" target="_blank" data-smartkarma-citation="entities:10493:1" rel="noopener">Hogy Medical (3593 JP)</a> , and <a href="https://www.smartkarma.com/entities/eiken-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:12675:1" rel="noopener">Eiken Chemical (4549 JP)</a>  exhibit sub-par growth and lagging valuations</li>
<li>Activist investors like ValueAct Capital, Dalton and Asset Value have recognized an opportunity for growth and potential M&amp;A</li>
<li>Both Hogy and Eiken trades at a deep discount to larger domestic peers and stand to benefit the most from any consolidation</li>
</ul>


The med-tech sector is ripe for consolidation. Smaller players like Hogy Medical (3593 JP) , and Eiken Chemical (4549 JP)  exhibit sub-par growth and lagging valuations
Activist investors like ValueAct Capital, Dalton and Asset Value have recognized an opportunity for growth and potential M&amp;A
Both Hogy and Eiken trades at a deep discount to larger domestic peers and stand to benefit the most from any consolidation


Consolidation in the Med-Tech Sector? Eiken and Hogy to Benefit

<ul>
<li>NAVF and Dalton invest heavily in Hogy Medical, eyeing its market dominance and growth potential in disposable surgical equipment</li>
<li>Despite past underperformance, NAVF's proactive engagement signals a push for a more aggressive overseas expansion</li>
<li>We see a number of continued catalysts for future shareholder value enhancement and improved corporate governance position</li>
</ul>


NAVF and Dalton invest heavily in Hogy Medical, eyeing its market dominance and growth potential in disposable surgical equipment
Despite past underperformance, NAVF's proactive engagement signals a push for a more aggressive overseas expansion
We see a number of continued catalysts for future shareholder value enhancement and improved corporate governance position


Hogy Medical (3593): A Prescription for Renewed Growth

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hogy-medical-co-ltd" target="_blank" data-smartkarma-citation="entities:10493:1" rel="noopener">Hogy Medical (3593 JP)</a> reported mixed FY23 result. Revenue and operating profit were ahead of guidance while net profit missed guidance mainly due to a one-off loss of ¥464M. </li>
<li>For FY24, Hogy guided for 5% revenue growth. However, operating, and net profits are expected to decline 23% and 19%, respectively, due to rising costs and exchange rate fluctuations.</li>
<li>While Hogy will continue cost cutting and improving productivity, the company is not expected to fully offset the cost pressure. Hence near-term outlook for the company remains bleak.</li>
</ul>



Hogy Medical (3593 JP) reported mixed FY23 result. Revenue and operating profit were ahead of guidance while net profit missed guidance mainly due to a one-off loss of ¥464M. 
For FY24, Hogy guided for 5% revenue growth. However, operating, and net profits are expected to decline 23% and 19%, respectively, due to rising costs and exchange rate fluctuations.
While Hogy will continue cost cutting and improving productivity, the company is not expected to fully offset the cost pressure. Hence near-term outlook for the company remains bleak.


Hogy Medical (3593 JP): Mixed FY23 Result; Soaring Cost to Negatively Impact Profit in FY24

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hogy-medical-co-ltd" target="_blank" data-smartkarma-citation="entities:10493:1" rel="noopener">Hogy Medical (3593 JP)</a> reported 6.2% growth in revenue to ¥29.5B during 9MFY23, driven by healthy sales of Premium Kit and other non-woven products. Sales of Premium Kit climbed 12%.</li>
<li>Rising cost pressure has negatively impacted margins. Gross profit margin contracted 180bps YoY to 40.6% in 9MFY23. Operating profit margin declined 20bps YoY to 17.1%.</li>
<li>Hogy continued to expect revenue to rise 5.3% YoY to ¥38.7B, operating profit to grow 6.1% YoY to ¥6.5B, and net profit to increase 4.6% YoY to ¥4.57B in FY23.</li>
</ul>



Hogy Medical (3593 JP) reported 6.2% growth in revenue to ¥29.5B during 9MFY23, driven by healthy sales of Premium Kit and other non-woven products. Sales of Premium Kit climbed 12%.
Rising cost pressure has negatively impacted margins. Gross profit margin contracted 180bps YoY to 40.6% in 9MFY23. Operating profit margin declined 20bps YoY to 17.1%.
Hogy continued to expect revenue to rise 5.3% YoY to ¥38.7B, operating profit to grow 6.1% YoY to ¥6.5B, and net profit to increase 4.6% YoY to ¥4.57B in FY23.


Hogy Medical (3593 JP): Strong Nine-Month Result as COVID Had Minimal Impact on Surgery Volume

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mani-inc" target="_blank" data-smartkarma-citation="entities:6534:1" rel="noopener">Mani Inc (7730 JP)</a> reported Q2FY22 revenue ahead of guidance, mainly driven by demand recovery in the surgical segment and positive effect of foreign exchange. However, profitability declined year-over-year.</li>
<li>Despite revenue beat in H1FY22, management reiterated FY22 guidance due to geographical risk. Outlook seems to be uncertain for China and India, which together contribute 33% of total revenue.</li>
<li>Mani shares plunged 20% since I published bearish note on the company in January 2022. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.</li>
</ul>



Mani Inc (7730 JP) reported Q2FY22 revenue ahead of guidance, mainly driven by demand recovery in the surgical segment and positive effect of foreign exchange. However, profitability declined year-over-year.
Despite revenue beat in H1FY22, management reiterated FY22 guidance due to geographical risk. Outlook seems to be uncertain for China and India, which together contribute 33% of total revenue.
Mani shares plunged 20% since I published bearish note on the company in January 2022. Investors should avoid Mani due to its uncertain revenue outlook and deteriorating profitability in short-term.


Mani Inc (7730 JP): Q2 Result Exceeds Expectation Aided by Demand Recovery; FY22 Guidance Reiterated

Japan

HOGY MEDICAL CO., LTD. manufactures and sells medical supply and related products including sterilized tools and disposable injectors and masks used by surgeons.

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Hogy Medical (3593 JP)

Consolidation in the Med-Tech Sector? Eiken and Hogy to Benefit

The med-tech sector is ripe for consolidation. Smaller players like Hogy Medical (3593 JP) , and Eiken Chemical (4549 JP) exhibit sub-par growth...

Mark Chadwick

Hogy Medical (3593): A Prescription for Renewed Growth

NAVF and Dalton invest in Hogy Medical for market dominance in disposable surgical equipment, signaling aggressive overseas expansion and...

Mark Chadwick