Daily Brief Health Care: Classys, JTEC Corp/Osaka, Jiangsu Hengrui Medicine and more

In today’s briefing:

Classys: Block Deal Sale of 6% By Bain Capital Raises Overhang Concerns
JTEC Corp (3446 JP) – Continued Uplift in Performance
China Healthcare Weekly (May.18) – Trump to Lower US Drug Prices, Thoughts on Hengrui’s IPO Pricing

Classys: Block Deal Sale of 6% By Bain Capital Raises Overhang Concerns

After the market close on 16 May, Bain Capital sold about 6% stake in Classys (214150 KS) in a block deal sale.
Bain Capital sold 3.93 million shares of Classys at 57,915 won per share (this price is 10.9% discount from Classys’ closing price the previous day).
Bain Capital’s decision to sell a 6% stake in Classys via a discounted block deal, rather than offloading its entire 60.2% controlling stake, indicates a share overhang on future sales.

Momentum building – With a continued recovery at the core Optical segment, and high double-digit sales growth YoY at Life Science & Equipment, we believe Q1-3 FY3/26 results indicate sustained upward momentum at JTEC.
The company has maintained FY6/25 guidance, and while this implies a back-end-loaded Q4 FY6/25, order visibility appears firm from demand on a global basis for the Optical business.
Indications of progress in the Life Science and Equipment Development segment, driven by the semiconductor initiative, are promising, even if its full earnings potential remains longer-term.

Trump signed an executive order aimed at lowering prescription drug prices in the US, but the specific implementation may encounter obstacles. This is good news for China’s innovative drug assets.
Under tariff/trade war, as long as the US does not issue any bill proposing to suspend the technology exchange, licensing-out business model of China biotech will not be substantially affected.
Hengrui’s IPO in Hong Kong is not attractive from a fundamental perspective. However, the recent strong performance of Hengrui’s A-share has lifted investors’ sentiment, making them “interested” in this IPO.

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