In today’s briefing:
- China TCM (570.HK) – About the Profit Warning and the Valuation Outlook
- Yatharth Hospital: Decoding Disclosure Lapses & Red Flags
- Sysmex Corp (6869 JP): Expansion Plans In Brazil Looks Prospective, Yet Gets Tricky With Margins
- Daiichi Sankyo (4568 JP): US Approval for Second ADC Drug to Drive Accelerated Growth
China TCM (570.HK) – About the Profit Warning and the Valuation Outlook
- The sharp performance decline of China TCM in 2024 is actually in line with our expectation. The current valuation has not yet reached its lowest point.
- China TCM can still achieve an average annual profit of RMB1 billion in the future. Together with the new management, we expect the Company to come out of the trough.
- Instead of betting on privatization again, it’s better to focus more on whether China TCM’s fundamentals would improve, which is the key factor that can support a sustainable valuation rebound.
Yatharth Hospital: Decoding Disclosure Lapses & Red Flags
- Yatharth Hospital & Trauma Care Services (YATHARTH IN) successfully completed a QIP, raising Rs. 625 crore which was followed by the stock falling by nearly 26% in the following month.
- The company and its subsidiaries has recently been facing a significant challenge with an investigation by the Income Tax Department and the attachment of company assets.
- The document released on December 17, 2024 has confirmed the search and seizure operations conducted on October 19, 2023, targeting Yatharth and two of its subsidiaries.
Sysmex Corp (6869 JP): Expansion Plans In Brazil Looks Prospective, Yet Gets Tricky With Margins
- Sysmex America, Inc., a subsidiary of Sysmex Corp, recently announced plans to build a new reagent manufacturing, distribution, and service center in Brazil.
- In FY24, sales in the Americas region for Sysmex increased 12% YoY to ¥118.7B. Reagents drove the revenue growing 16%.
- Operating margins in the Americas have largely trodden on a volatile trajectory over the last few years hovering in the range of 4-6%, lowest among all the geographies.
Daiichi Sankyo (4568 JP): US Approval for Second ADC Drug to Drive Accelerated Growth
- Daiichi Sankyo (4568 JP) has received FDA approval for Datroway for the second-line treatment of unresectable or metastatic hormone receptor (HR) positive, HER2 negative breast cancer.
- Last month, Datroway got approval in Japan. Regulatory submissions for the drug are under review in the EU, China, and other regions. The drug is undergoing trial for other indications.
- AstraZeneca’s proven commercialization capability for Enhertu enhances conviction on the commercialization prospect of Datroway too. AstraZeneca pegged peak year revenue of Datroway at more than $5B (similar level to Enhertu).
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