Smartkarma Daily Briefs

• In 1H23, Hygeia Healthcare Group (6078 HK) reported revenue growth of 15% YoY to RMB1,760 million, mainly driven by a 16% YoY growth in hospital business.
• Hygeia’s gross profit margin contracted 20bps YoY to 32.4%. Riding on 5.6x increase in government grant, operating profit jumped 33% YoY to RMB420M, leading to 320bps margin expansion to 23.9%.
• In July, Hygeia acquired Chang’an Hospital for RMB1,660 million. The acquisition will provide Hygeia with greater room to expand its business in the northwest region of the PRC.  

Throughout Q323, Immix shared encouraging updates for the clinical development of lead CAR-T asset NXC-201, including the announcement of orphan drug designation (ODD) in both multiple myeloma (MM) and amyloid light chain amyloidosis (ALA). In October 2023, the company shared positive efficacy and safety updates and we believe the data so far could support NXC-201 as the first outpatient CAR-T therapy, subject to regulatory approval, addressing the myriad of challenges associated with current CAR-Ts. In the quarter, Immix also shared positive interim data for its lead TSTx asset, IMX-110, and we anticipate further updates across Q423 to FY24. Net cash at the end of the period stood at $19.6m, which we estimate should provide an operating cash runway into Q424. As we adjust for our expense estimates based on year-to-date results, update net cash and roll our model forward, our valuation for Immix adjusts to $86.6m or $4.0 per share (from $90.7m or $4.2/share previously).

• Since Corporate Governance Code limits disclosures on climate change to prime market companies, it’ll encourage the transition from Prime to Standard market and discourage the transition from Sandard to Prime.
• While it’ll be interesting to see how many years “Scope 3” disclosures will be mandatory, more attention will be paid to how companies uses the cash from reducing policy shareholdings.
• Although the situation is different than it was in 2000 because few companies are underfunded, attention should be paid to whether retirement benefit trusts will become a refuge for policy-shareholdings.