Asia Healthcare Analyst, Pathology Associates Limited

Dion Stéfan Büchner M.D., FCAP

Asia Healthcare Analyst

Pathology Associates Limited

Thematic (Sector/Industry)

<a href="https://www.smartkarma.com/entities/19535" target="_blank" data-smartkarma-citation="entities:19535:1">Shionogi &amp; Co Ltd (4507 JP)</a> - May 09, 2018<table class="table table-striped"><tbody>
<tr>
<td>FY16A</td>
<td>FY17E Preview</td>
<td>% ∆ y-o-y</td>
<td>FY17 CE*</td>
<td>% ∆ y-o-y</td>
<td>Notes</td>
</tr>
<tr>
<td>Sales  (¥b)</td>
<td>338.9</td>
<td>347.0</td>
<td>2.4%</td>
<td>345.0</td>
<td>1.8%</td>
<td>HIV franchise royalty to drive topline</td>
</tr>
<tr>
<td>GPM (%)</td>
<td>77.0%</td>
<td>78.7%</td>
<td>2.2%</td>
<td>77.8%</td>
<td>1.0%</td>
<td>Earnings in the form of royalty improve gross margins</td>
</tr>
<tr>
<td>Core EBIT (¥b)</td>
<td>111.5</td>
<td>117.6</td>
<td>5.5%</td>
<td>N.A.</td>
<td> </td>
</tr>
<tr>
<td>Reported EBIT</td>
<td>108.2</td>
<td>114.3</td>
<td>5.7%</td>
<td>113.5</td>
<td>4.9%</td>
</tr>
<tr>
<td>Core EPS** (¥)</td>
<td>263.4</td>
<td>307.8</td>
<td>16.9%</td>
<td>N.A.</td>
<td> </td>
</tr>
<tr>
<td>Reported EPS </td>
<td>255.9</td>
<td>297.8</td>
<td>16.4%</td>
<td>317.0</td>
<td>23.9%</td>
</tr>
</tbody></table>FY18e Potential Guidance<ul><li>HIV franchise continues its growth trajectory, however, genericization of its products…</li></ul>

Shionogi &amp; Co Ltd (4507 JP) - May 09, 2018

FY16A
FY17E   Preview
% ∆  y-o-y
FY17  CE*
% ∆  y-o-y
Notes


Sales  (¥b)
338.9
347.0
2.4%
345.0
1.8%
HIV franchise royalty to drive topline


GPM (%)
77.0%
78.7%
2.2%
77.8%
1.0%
Earnings in the form of royalty improve gross margins


Core EBIT (¥b)
111.5
117.6
5.5%
N.A.
 


Reported EBIT
108.2
114.3
5.7%
113.5
4.9%


Core EPS** (¥)
263.4
307.8
16.9%
N.A.
 


Reported EPS 
255.9
297.8
16.4%
317.0
23.9%

FY18e Potential GuidanceHIV franchise continues its growth trajectory, however, genericization of its products…

Japan Pharmaceuticals: FY17e Earnings Preview (II)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/6634" target="_blank" data-smartkarma-citation="entities:6634:1">Nippon Shinyaku Co Ltd (4516 JP)</a> @ ¥ 8,480 (up ~18% week-to-date) vs. our TP ¥ 8,600. We recommend booking profit at current levels.</li>
<li>
<a href="https://www.smartkarma.com/entities/11747" target="_blank" data-smartkarma-citation="entities:11747:1">Takeda Pharmaceutical Co Ltd (4502 JP)</a> @ @ ¥ 4,857 implies an attractive dividend yield of ~3.7. We continue with our OW rating on the stock.</li>
<li>
<a href="https://www.smartkarma.com/entities/19535" target="_blank" data-smartkarma-citation="entities:19535:1">Shionogi &amp; Co Ltd (4507 JP)</a>@ ¥ 5,497 (down ~10% week to date) implies ~17x our FY19e revised core EPS of ¥ 318 / share. We maintain our OW rating on the stock.</li>
<li>
<a href="https://www.smartkarma.com/entities/1935" target="_blank" data-smartkarma-citation="entities:1935:1">Sumitomo Dainippon Pharma Co (4506 JP)</a> @ ¥ 2,016 (up 20%…</li>
</ul>



Nippon Shinyaku Co Ltd (4516 JP) @ ¥ 8,480 (up ~18% week-to-date) vs. our TP ¥ 8,600. We recommend booking profit at current levels.

Takeda Pharmaceutical Co Ltd (4502 JP) @ @ ¥ 4,857 implies an attractive dividend yield of ~3.7. We continue with our OW rating on the stock.

Shionogi &amp; Co Ltd (4507 JP)@ ¥ 5,497 (down ~10% week to date) implies ~17x our FY19e revised core EPS of ¥ 318 / share. We maintain our OW rating on the stock.

Sumitomo Dainippon Pharma Co (4506 JP) @ ¥ 2,016 (up 20%…


Japan Pharmaceuticals: The Week that Was…

<ul>
<li>
<a href="https://www.smartkarma.com/entities/11747" target="_blank" data-smartkarma-citation="entities:11747:1">Takeda Pharmaceutical Co Ltd (4502 JP)</a> @ ¥ 4,911/ share (down 24% YTD) implies ~17x (~30% discount to industry average) our FY19e core EPS of ¥ 294 / share and industry leading dividend yield of 3.7%. We maintain OW rating on the stock.</li>
<li>
<a href="https://www.smartkarma.com/entities/1935" target="_blank" data-smartkarma-citation="entities:1935:1">Sumitomo Dainippon Pharma Co (4506 JP)</a> @ ¥ 1,914 / share (up 15% YTD) implies ~78x (~200% premium to industry average) our FY19e core EPS of ¥ 25 / share (or -61% FY17-19e core EPS CAGR). We maintain UW rating on the stock</li>
<li>After a steep weekly decline of 16%…</li>
</ul>



Takeda Pharmaceutical Co Ltd (4502 JP) @ ¥ 4,911/ share (down 24% YTD) implies ~17x (~30% discount to industry average) our FY19e core EPS of ¥ 294 / share and industry leading dividend yield of 3.7%. We maintain OW rating on the stock.

Sumitomo Dainippon Pharma Co (4506 JP) @ ¥ 1,914 / share (up 15% YTD) implies ~78x (~200% premium to industry average) our FY19e core EPS of ¥ 25 / share (or -61% FY17-19e core EPS CAGR). We maintain UW rating on the stock
After a steep weekly decline of 16%…


Japan, after the US and China, is the world’s third largest pharma industry, worth ~$70b in 2016. However, according to research and consulting firm GlobalData (<a href="https://www.dddmag.com/article/2017/02/japanese-pharmaceutical-market-rise-slightly-72b-2021" target="_blank">link</a>), the Japan pharma market is expected to report mere 0.3% growth over FY16-22e to $72b.One of the key reasons for flat growth rate is ongoing annual price cuts (bi-annual until two years ago), under which Japan Ministry of Health, Labor and Welfare (MHLW) cuts prices of adjudged expensive drugs to keep check on rising healthcare…

Japan, after the US and China, is the world’s third largest pharma industry, worth ~$70b in 2016. However, according to research and consulting firm GlobalData (link), the Japan pharma market is expected to report mere 0.3% growth over FY16-22e to $72b.One of the key reasons for flat growth rate is ongoing annual price cuts (bi-annual until two years ago), under which Japan Ministry of Health, Labor and Welfare (MHLW) cuts prices of adjudged expensive drugs to keep check on rising healthcare…

Japan Pharma - Drug Price Revision in April 2018

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

It has been a while since we updated the "Hated by the Street" screen. So we thought it would be good to see which names made the list. Usually we only screen for names where the % of BUY recommendations to Total is less than 20%. However, 126 names made that list. We therefore further limited the screen by adding % of SELL recommendations greater than 30% of total recommendations. 26 names met both criteria. At the top of the list is <a href="https://www.smartkarma.com/entities/391" target="_blank" data-smartkarma-citation="entities:391:1">Sharp Corp (6753 JP)</a> with 0 BUY recommendations and 8 SELL…

It has been a while since we updated the "Hated by the Street" screen. So we thought it would be good to see which names made the list. Usually we only screen for names where the % of BUY recommendations to Total is less than 20%. However, 126 names made that list. We therefore further limited the screen by adding % of SELL recommendations greater than 30% of total recommendations. 26 names met both criteria. At the top of the list is Sharp Corp (6753 JP) with 0 BUY recommendations and 8 SELL…

Names that Are Hated and Loved by the Street in Japan....

Japan

Nippon Shinyaku Co., Ltd. manufactures pharmaceutical and health foods products. The Company produces drugs for urinary, nerve, respiratory, and circulatory systems as well as analgesic and anti-inflammatory drugs.  Nippon Shinyaku also develops synthetic anti-bacterial agents.

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Nippon Shinyaku (4516 JP)

Japan Pharmaceuticals: FY17e Earnings Preview (II)

Shionogi & Co Ltd (4507 JP) - May 09, 2018FY18e Potential GuidanceHIV franchise continues its growth trajectory, however, genericization of its...

Dion Stéfan Büchner M.D., FCAP

Japan Pharmaceuticals: The Week that Was…

Nippon Shinyaku Co Ltd (4516 JP) @ ¥ 8,480 (up ~18% week-to-date) vs. our TP ¥ 8,600. We recommend booking profit at current levels. Takeda...

Dion Stéfan Büchner M.D., FCAP

Japan Pharmaceuticals: The Week that Was…

Takeda Pharmaceutical Co Ltd (4502 JP) @ ¥ 4,911/ share (down 24% YTD) implies ~17x (~30% discount to industry average) our FY19e core EPS of ¥...

Dion Stéfan Büchner M.D., FCAP

Japan Pharma - Drug Price Revision in April 2018

Japan, after the US and China, is the world’s third largest pharma industry, worth ~$70b in 2016. However, according to research and consulting...

Dion Stéfan Büchner M.D., FCAP

Names that Are Hated and Loved by the Street in Japan....

It has been a while since we updated the "Hated by the Street" screen. So we thought it would be good to see which names made the list. Usually we...

Custom Products Group

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