Category

Healthcare

Health Care: Microport Scientific, Mani Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance
  • Mani Inc (7730 JP): Q2 Result Exceeds Expectation Aided by Demand Recovery; FY22 Guidance Reiterated

Microport Scientific (853.HK)-The “unique” Development Mode Leads to Lower-Than-Expected Performance

By Xinyao (Criss) Wang

  • Due to the centralized procurement in PRC market and decreasing volume of operations in overseas markets during pandemic, Microport Scientific (853 HK)’s 2021 performance missed expectations. 
  • Even if Microport could finally digest the negative impact of centralized procurement, its “unique” development mode would still put pressure and uncertainties on future performance/outlook, leading to lower-than-expected results.
  • Our earnings estimate of Microport in 2022 could be about HK$-1.7, and revenue estimate could be about HK$7.3 billion. It’s quite possible that the Company will not end up profitable.

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

By Tina Banerjee

  • 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.

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Health Care: IDT Australia, Starpharma Holdings, Shimadzu Corp and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • IDT Australia (IDT): Poised to Benefit from RNA and On-Shoring
  • Starpharma Holdings (SPL AU): Ready to Fly High as Viraleze Anti-Viral Nasal Spray Relaunched in UK
  • Shimadzu (7701 JP): Weak Yen Supports Guidance

IDT Australia (IDT): Poised to Benefit from RNA and On-Shoring

By Taylor Collison

  • DT Australia has a long track record as a manufacturer of pharmaceutical drugs, including both active pharmaceutical ingredients (API) and finished drug products at its facilities in Melbourne.
  • However, over the past decade it has been squeezed by cheaper overseas manufacturers.
  • IDT reported its first operating profit for a decade in FY21, supported by a Covid-related Sterile Readiness government contract to recommission its sterile manufacturing facilities that could be used to manufacture a commercial Covid-19 vaccine, if required.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Starpharma Holdings (SPL AU): Ready to Fly High as Viraleze Anti-Viral Nasal Spray Relaunched in UK

By Tina Banerjee

  • Starpharma Holdings (SPL AU) is an emerging biopharma company. The company has commercialized its flagship product Viraleze antiviral nasal spray in March 2021. It is now registered in 30+ countries.
  • On June 30, Starpharma announced the relaunch of Viraleze in UK, one-year after its sales were paused temporarily in June 2021, thereby removing a major overhang on the share prices.
  • Viraleze has shown strong potential to inactivate a broad spectrum of respiratory/cold viruses, including multiple variants of SARS-CoV-2 and influenza A and B.  

Shimadzu (7701 JP): Weak Yen Supports Guidance

By Scott Foster

  • The weak yen should add several billion to operating profit this fiscal year, helping the company meet or exceed guidance.
  • Medical Systems, which were once barely profitable, generated a 9.1% operating margin last year due to growing service revenues and a better product mix.
  • The share price should continue to hold up in a declining market.

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Health Care: Dental Doctor Medical Holding Group, Max Healthcare Institute and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Pre-IPO Dental Doctor Medical Holding Group – An Uncertain Outlook and Concerns About Profitability
  • Max Healthcare (MAXHEALTH IN): 4QFY22 Review- Continued Growth Momentum; Better Profitability

Pre-IPO Dental Doctor Medical Holding Group – An Uncertain Outlook and Concerns About Profitability

By Xinyao (Criss) Wang

  • Dental Doctor has not established core competitiveness and high moat, and has to invest more on marketing and promotion to attract customers and drive growth.
  • The lack of dentists, weak talent and training system as well as high dentist turnover rate would be big concerns for the Company’s long term development, especially for nationwide expansion.
  • This industry has not yet entered the profit mode. Most of chain dental services providers are still in the stage of cash-burning expansion. So, we are conservative about the Company’s outlook.

Max Healthcare (MAXHEALTH IN): 4QFY22 Review- Continued Growth Momentum; Better Profitability

By Tina Banerjee

  • Max Healthcare Institute (MAXHEALT IN) reported Q4FY22 results in-line with expectations, with 12% revenue and 58% net profit growth. The EBITDA margin improved 70 basis points to 24.8% during Q4FY22.
  • Despite the Omicron, the average occupancy for the quarter stood at 68%, partly fueled by the international medical tourism bouncing back to ~90% of the pre-covid levels in March 2022.
  • The company plans to add over 2,800 beds in the next five years. For context, it has current bed capacity of 3,400. Capex will be funded through internal accrual.

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Health Care: Arrail Group, Rainmed Medical and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Arrail Group (6639 HK): Full-Year FY22 Results Indicate Demand Is Recovering
  • Pre-IPO Rainmed Medical – The Industry, the Business and the Concerns

Arrail Group (6639 HK): Full-Year FY22 Results Indicate Demand Is Recovering

By Tina Banerjee

  • Despite regional lockdowns caused by COVID-19 during most part of FY21, Arrail Group (6639 HK) posted 7% y/y growth in revenue, driven by 14% y/y growth in total patient visits.   
  • China dental services market is growing at an average 20% per annum. Arrail’s low debt and strong cash position should support its business expansion plans to grab the market opportunity.
  • Despite competition, the company is expected to report accelerated double-digit revenue growth in next three years, by leveraging on its market leadership positioning and favorable macro tailwind.

Pre-IPO Rainmed Medical – The Industry, the Business and the Concerns

By Xinyao (Criss) Wang

  • The combination of FFR and IMR can provide a complete functional evaluation from epicardial arteries to myocardial microcirculation,pushing the precise diagnosis and treatment of coronary disease into a new era.
  • Rainmed’s caFFR System and caIMR System have obvious technical and first-mover advantages; The CE certificate also opens up the imagination space of product commercialization (such as developing markets).
  • However, the concerns on current sales model, market acceptance, medical insurance coverage, cash flow pressure and market sentiment when IPO should also not be neglected. 

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Health Care: EMIS Group PLC, Copper, Hogy Medical, Arrail Group and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • UnitedHealth/EMIS: Agreed Offer, Estimated Calendar, Spread
  • Signs of Disinflation?; Commodities Deteriorating; Another Bear Market Bounce; Pharma/Biotech Buys
  • Hogy Medical (3593 JP): Reviving Demand for Premium Surgical Kit Products to Drive Future Growth
  • Arrail Group (6639.HK) – The Development Strategy Cannot Generate High Returns

UnitedHealth/EMIS: Agreed Offer, Estimated Calendar, Spread

By Jesus Rodriguez Aguilar

  • Giant UnitedHealth offers 1,925p, in cash (implied equity value of £1,243 million, implied EV of £1,185 million). This represents: 6.5x EV/Fwd Revenue, 20.4x EV/Fwd EBITDA and 31.7x Fwd PE (source: I/B/E/S).
  • The offer is pitched above peer’s multiples, which coupled with a 49% premium, should be enough to convince any reluctant shareholder to tender.
  • Gross spread is 2.9%, quite good for a highly likely deal in the European space (c. 16% estimated annual return assuming settlement takes place on 8 September).

Signs of Disinflation?; Commodities Deteriorating; Another Bear Market Bounce; Pharma/Biotech Buys

By Joe Jasper

  • A bear market bounce is underway after the S&P 500, Nasdaq 100 (QQQ), and Russell 2000 (IWM) found support at their respective downtrend channels, a possibility we discussed last week.
  • Still, until the S&P 500, QQQ, and IWM can break above their various downtrends, we remain bearish, and believe investors should be using rallies to reduce overall exposure.
  • This 1-week rally has the NDX(QQQ) testing resistance at its falling wedge pattern; a break above $297 would likely mean this bear market bounce has another 2-4 weeks of upside.

Hogy Medical (3593 JP): Reviving Demand for Premium Surgical Kit Products to Drive Future Growth

By Tina Banerjee

  • Hogy Medical (3593 JP) is high-quality idea on Japan re-opening, with surgical kit, especially premium kit being the main growth driver of the company.
  • With the declining effect of the COVID-19 and resuming elective surgeries in Japan, Hogy expects 5% y/y revenue growth in FY23, driven by an 11% growth in surgical kit products.
  • Hogy is expanding marketing initiatives in Southeast Asian countries. The company is enhancing production capacity of premium kit products, with partial operation of the new plant to start in July.

Arrail Group (6639.HK) – The Development Strategy Cannot Generate High Returns

By Xinyao (Criss) Wang

  • Arrial’s positioning at high-end private dental chain indicates limited growth space. The large investment in dental professionals drags down overall margins but fails to generate good word-of-mouth and expected returns.
  • Public hospitals with NRDL reimbursement and private dental chains with high cost performance would put more pressure on Arrail. Increasing marketing/promotion expenses cannot turn things around but further reduce margins.
  • Overall, the high-end strategy cannot bring high-end returns. We are not optimistic about Arrail’s prospects and profitability. The Company may even keep losing money and hard to turn profitable.

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Health Care: Gushengtang, Gland Pharma Ltd and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Gushengtang (2273.HK) – The Development Momentum Is Good, but There Are Also Challenges
  • Gland Pharma – Multiple Levers at Play; Valuations Attractive

Gushengtang (2273.HK) – The Development Momentum Is Good, but There Are Also Challenges

By Xinyao (Criss) Wang

  • Through perfect partnership system, Gushengtang locks in the scarce TCM physicians, and then quickly establishes/merges offline medical institutions to occupy the market. Such development mode works well so far.
  • The challenges are the risks of losing talents to competitors and the weak sales of healthcare products leading to lower profitability. 
  • Gushengtang is in an industry that receives government encouragement/preferential policies. The 2022 revenue growth forecast could fall back to about 25% considering the pandemic/lockdown. The EPS could narrowly turn positive.

Gland Pharma – Multiple Levers at Play; Valuations Attractive

By Motilal Oswal

  • After delivering 27% earnings CAGR over FY17-22, GLAND is well-placed to sustain its earnings growth momentum over the next three-to-five years
  • It has been enhancing its offerings by adding complex products to its portfolio, scaling the product at the global level, expanding capacity to aid manufacturing, as well as increased backward integration.
  • While constraints on availability of certain materials may hinder performance over the near term, GLAND is in good stead for consistent performance over the next three-to-five years.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


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Health Care: Hanmi Science, Ramsay Health Care, Lepu Biopharma and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • KOSPI Size Index Series: September Rebalancing Preview
  • Merger Arb Mondays (27 Jun) – Ramsay Health, Link Admin, Link Net, True/DTAC, ResApp, Giordano
  • Lepu Biopharma (2157 HK): Lead Candidate Marching Toward Commercialization; Pipeline Is Progressing

KOSPI Size Index Series: September Rebalancing Preview

By Sanghyun Park

  • We generally detect an increase in the buying volume of local institutions for stocks moving from Large Cap to Mid Cap ahead of the KOSPI size index rebalancing.
  • At the last close, Mid→Large: Pan Ocean, Hyundai Mipo, BGF Retail, & OCI / Large→Mid: Hanmi Science, KCC, DB Hitek, & KEPCO E&C
  • The level of price impact/correlation in the last rebalancing was exceptionally high. This is reason enough for us to consider setting up a preemptive position for this rebalancing event.


Lepu Biopharma (2157 HK): Lead Candidate Marching Toward Commercialization; Pipeline Is Progressing

By Tina Banerjee

  • Lepu Biopharma (2157 HK) has filed NDA for its lead drug candidate pucotenlimab (HX008) for two indications in China, having a combined estimated market opportunity of RMB8 billion by 2030.
  • Overcrowded PD-1 mAb drugs market in China, with 10 marketed drugs, may limit the growth potential of pucotenlimab. However, pucotenlimab has better efficacy than existing drugs.
  • Lepu’s other core assets are also progressing and the company has sufficient cash to fund its R&D and commercialization initiatives.

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Health Care: Alfresa Holdings and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Alfresa Holdings (2784 JP): Looking Ahead Through 2022–25 Mid-Term Management Plan

Alfresa Holdings (2784 JP): Looking Ahead Through 2022–25 Mid-Term Management Plan

By Tina Banerjee

  • Alfresa Holdings (2784 JP) reported revenue decline in FY21. Apart from market wide negative impact of COVID-19 and drug price revision, suspended qualification for public bidding tenders affected the company.
  • In FY22, the company is expected to be back to its growth path with less impact of bidding suspension and increasing focus on high growth areas.
  • According to its 2022–2024 mid-term management plan, Alfresa targets to achieve a revenue of ¥2.7 trillion and operating income margin of 1.5% or higher by FY25.

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Health Care: Siloam International Hospitals, Green Cross, Ipca Laboratories and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Siloam International Hospitals (SILO IJ) -Revival of Core Patient Business in Motion
  • Green Cross (006280 KS): Hope Still Remains for the U.S. Approval of Blood Derivative Injection
  • Ipca Laboratories – On Course to Revive Earnings Growth

Siloam International Hospitals (SILO IJ) -Revival of Core Patient Business in Motion

By Angus Mackintosh

  • A webinar hosted by Smartkarma with Siloam International Hospitals revealed strong momentum behind its base-case revenues, with patient numbers, and some positive pricing strategies driving revenues.
  • The company also continues to develop its centres of excellence and leading positions in a number of specialisations, which helps to widen catchment areas and increase the complexity of treatments. 
  • Siloam continues to expand its hospital portfolio but may look to acquire more brownfield assets in the future plus it is experimenting with a managed services model. Valuations are attractive.

Green Cross (006280 KS): Hope Still Remains for the U.S. Approval of Blood Derivative Injection

By Tina Banerjee

  • Green Cross (006280 KS) is expected to receive FDA approval for its immune globulin injection, once the agency conducts onsite inspection of its production facility.
  • After suffering in 2021, both blood products and vaccine business are back to double-digit growth path in Q1 2022. The company continues to win export orders for both of these.
  • Hunter syndrome and hemophilia treatments are the company’s new growth engines. Green Cross has received approval for its hunter syndrome treatment in China and Japan.  

Ipca Laboratories – On Course to Revive Earnings Growth

By Motilal Oswal

  • The domestic formulation (DF) segment continues on its robust growth path, led by market share gain, favorable price hikes, addition of medical representatives (MRs), and its increased presence particularly in the cardiology segment.
  • The exports opportunity is expected to improve with increased product launches in the UK, new launches and market share gain in Russia, and industry outperformance in Africa branded generics market.
  • After 18% YoY decline in earnings in FY22, we expect 11% earnings CAGR over FY22- 24, led by 13%/8%/8% sales CAGR in DF, exports formulations, and API, respectively.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


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Health Care: iShares Russell 2000 ETF, MicroPort NeuroTech and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Downgrading Materials; SPX, NDX, Russell 2000 Testing Downtrend Channel Support; Biotech Buys
  • Pre-IPO MicroPort NeuroTech – The Industry, the Business and the Concern

Downgrading Materials; SPX, NDX, Russell 2000 Testing Downtrend Channel Support; Biotech Buys

By Joe Jasper

  • We remain bearish as long as the YTD downtrends remain intact on the SPX and NDX (QQQ), and as long as the 7.5-month downtrend remains intact on the Russell 2000(IWM).
  • There is potential for a bounce given the SPX, QQQ, and IWM are all at downtrend channel supports.
  • The continued rise of the U.S. dollar (DXY), 10-yr Treasury yield, and WTI crude oil is what we believe is fueling the bear market in equities.

Pre-IPO MicroPort NeuroTech – The Industry, the Business and the Concern

By Xinyao (Criss) Wang

  • The advantages of NeuroTech are mainly reflected in the comprehensive product portfolio and stable product performance, with higher gross margin, stronger cost control ability and first-mover advantage than its peers.
  • The major concerns here are the domestic shrinking market size due to the centralized procurement, the fierce market competition and the pain points on its sales model.
  • In terms of valuation, our view is that NeuroTech’s valuation could be higher than that of the peers such as Zylox-Tonbridge, HeartCare Medical, Peijia Medical and Sino Medical.

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