Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sawai-group-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:35512:1" rel="noopener">Sawai Group Holdings (4887 JP)</a> reported muted FY23 result, with all parameters missing guidance. Miss was due to the lower-than-expected performance in Japan, which contributed 82% of revenue.</li>
<li>Sawai’s U.S. business revenue increased 22% YoY to ¥36.6B, beating guidance of ¥32.2B. The U.S. business is now back to profitability by reporting higher-than-expected operating profit of ¥930M.</li>
<li>Sawai guided for 8% revenue growth in FY24. Core operating income is projected to decline due to the soaring raw material and energy prices and an increase in upfront costs.</li>
</ul>



Sawai Group Holdings (4887 JP) reported muted FY23 result, with all parameters missing guidance. Miss was due to the lower-than-expected performance in Japan, which contributed 82% of revenue.
Sawai’s U.S. business revenue increased 22% YoY to ¥36.6B, beating guidance of ¥32.2B. The U.S. business is now back to profitability by reporting higher-than-expected operating profit of ¥930M.
Sawai guided for 8% revenue growth in FY24. Core operating income is projected to decline due to the soaring raw material and energy prices and an increase in upfront costs.


Sawai Group Holdings (4887 JP): FY23 Result Missed Guidance; FY24 Guidance Calls For Lower Profits

Thematic (Sector/Industry)

<ul>
<li>We have screened for APAC (ex-China) healthcare companies using their respective Smart Score, a compound score for a company indicating its overall outlook based on key factors.</li>
<li>Smart Score screens the stock based on five major components including value, dividends, growth, resilience, and momentum. It also provides a cumulative score, which puts equal weightage on each parameter.  </li>
<li>Parameters used to screen the stocks: market cap≥ $800M and smart score≥ 3.5. We have seen stocks having high smart score has strong growth prospects and qualify for investment proposition.</li>
</ul>


We have screened for APAC (ex-China) healthcare companies using their respective Smart Score, a compound score for a company indicating its overall outlook based on key factors.
Smart Score screens the stock based on five major components including value, dividends, growth, resilience, and momentum. It also provides a cumulative score, which puts equal weightage on each parameter.  
Parameters used to screen the stocks: market cap≥ $800M and smart score≥ 3.5. We have seen stocks having high smart score has strong growth prospects and qualify for investment proposition.


Top APAC (Ex-China) Investment Worthy Healthcare Companies Using Smartkarma’s Smart Score Screener

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sawai-group-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:35512:1" rel="noopener">Sawai Group Holdings (4887 JP)</a> is negatively impacted by drug reimbursement pricing in Japan. H1FY23 revenue, operating profit, net profit decreased 1%, 36% y/y, and 29%, y/y, respectively.</li>
<li>Generic pharmaceutical companies are more affected by the drug price revisions than their branded counterparts. In addition, APIs are impacted by increases in the cost of oil and exchange rates.</li>
<li>The sustainability of the U.S. business rebound is still uncertain. We want to watch Sawai from sidelines and wait for full-year FY23 results, FY24 guidance, and NHI pricing decision.</li>
</ul>



Sawai Group Holdings (4887 JP) is negatively impacted by drug reimbursement pricing in Japan. H1FY23 revenue, operating profit, net profit decreased 1%, 36% y/y, and 29%, y/y, respectively.
Generic pharmaceutical companies are more affected by the drug price revisions than their branded counterparts. In addition, APIs are impacted by increases in the cost of oil and exchange rates.
The sustainability of the U.S. business rebound is still uncertain. We want to watch Sawai from sidelines and wait for full-year FY23 results, FY24 guidance, and NHI pricing decision.


Sawai Group Holdings (4887 JP): Continued Price Erosion Is Weakening Earnings Prowess

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>As designed, the JPX-Nikkei400 Index is something of a disaster. It aims to be slightly 'smart' vs other cap-weighted indices like TOPIX, but tracking error vs TOPIX is de minimus.</li>
<li>This year, in week 1, the ADD vs DELETE performance is positive. If we sector-hedge the ADDs vs DELETEs, it's doing even better.</li>
<li>This is probably due to relatively low pre-positioning, and cares. Momentum suggests one could be long ADDs vs DELETEs. And there is the perennial trade to watch out for.</li>
</ul>


As designed, the JPX-Nikkei400 Index is something of a disaster. It aims to be slightly 'smart' vs other cap-weighted indices like TOPIX, but tracking error vs TOPIX is de minimus.
This year, in week 1, the ADD vs DELETE performance is positive. If we sector-hedge the ADDs vs DELETEs, it's doing even better.
This is probably due to relatively low pre-positioning, and cares. Momentum suggests one could be long ADDs vs DELETEs. And there is the perennial trade to watch out for.


2022 JPX Nikkei 400 Rebal Update - Going the Right Way

Japan

Sawai Group Holdings Co., Ltd. manufactures and distributes medical products. The Company produces drugs, healthcare products, and other products. Sawai Group Holdings also produces medical equipment.

Sawai Group Holdings (4887 JP)