Daily Briefs

• Rigaku Holdings (268A JP) is Japan’s leading manufacturer of X-ray analysis, measurement and testing instruments. It is seeking to raise up to US$760 million. 
• In Japan, Rigaku’s XRD (X-ray diffraction) has a high market share of 75%. Around 70% of its revenue is derived from customers outside Japan.   
• The bull case rests on high customer switching costs, peer-leading revenue growth, top-quartile profitability, FCF generation, and low leverage.

• Considering 23H1 high base, it can be understood that 24H1 achieved a low single-digit growth. If excluding gain on disposal of subsidiaries, net profit in 24H1 would have negative growth.
• Mainland China contributed about 90% of total revenue, but an imminent risk is VBP, which will pose a challenge to the pricing autonomy of Tong Ren Tang’s OTC TCM drugs. 
• After absorbing the high base impact of 2023 this year, performance growth would return to double digits in 2025. Tong Ren Tang is undervalued. Reasonable valuation is P/E of 15.

• UMP Healthcare (722 HK) reported a tepid FY24 owing to weak sentiment in HK. Revenues were up 3% YoY; profits were down 27% YoY ( adj profits -34% YoY). 
• The environment in HK is gradually improving, and we believe there is a steady recovery on the horizon for the company.
• The stock trades at 7x FY25 PE and more than 58% of its market cap in net cash, with a yield trending towards 9%. 

AFT Pharmaceuticals has taken another major step in extending its international footprint, with the signing of an exclusive license agreement for Maxigesic IV in China, the second-largest pharma market globally after the US. The agreement has been signed with Xizang Weixinkang Pharmaceutical, a major hospitals injectables focused company, and includes an upfront payment of US$300k along with development and sales-related milestones and royalty payments. Partner Hyloris Pharmaceuticals is entitled to a minority share of the payment, which we believe will be 35%, in line with the deal structure with Hikma in the US. China is a key lever for AFT’s international growth efforts, and we expect Maxigesic IV to be AFT’s second product to be launched in the country, following the anticipated launch of Crystaderm in Q4 CY24.

• AEMD has three sites in Australia that are moving towards near-term patient enrollment.
• In Australia, Royal Adelaide is ready for enrollment and Kinara is expected to be open for enrollment shortly.
• A third site in Sydney has submitted a request to be added to the study.

• Zacks Small-Cap Research Note for SBC Medical Group Holdings (SBC)

• On September 30, 2024, NeuroBo Pharmaceuticals, Inc. (NRBO) announced positive topline results from the single ascending dose (SAD) Part 1 portion of the ongoing Phase 1 clinical trial of DA-1726 for the treatment of obesity.
• The results showed favorable safety, tolerability, and dose-linear pharmacokinetics (PK).
• Based on the strong safety profile of DA-1726, one or more additional cohorts are being added to explore the maximum tolerated dose.

• CytoSorbents is commercializing its E.U. approved CytoSorb blood purification technology to treat life-threatening conditions in the intensive care unit and cardiac surgery.
• First half 2024 product sales improved 12% from last year while product gross margins rose to 75%.
• The company also seeks U.S. and Canadian approval of a second product, DrugSorb-ATR, to reduce perioperative bleeding risk in patients on blood thinners during cardiac surgery.

• HCA Healthcare shared its quarterly financial performance for the second quarter of 2024, emphasizing positive growth across many key areas, amid some challenges inherent in the healthcare industry.
• The company’s earnings per share adjusted saw a significant increase by 28%, rising to $5.50, driven by robust volume growth across its markets and service lines.
• This growth reflects a concerted effort from HCA Healthcare to optimize operations and improve patient outcomes.

• IDEXX Laboratories recently reported its financial results for the second quarter of 2024.
• The company saw organic revenue growth of 7%, driven by a 7% increase in Companion Animal Group (CAG) Diagnostic recurring revenues and a 10% growth in its water business.
• Despite facing macroeconomic and sector-specific challenges, including a 2% decline in U.S. same-store clinical visit growth, IDEXX demonstrated resilience by leveraging solid execution strategies such as high premium instrument placements and gains in veterinary software and diagnostic imaging revenues.