In today’s briefing:
- EOFlow Craters. Medtronic Stays Mum
- Key Points We Should Know Regarding the Current Status of EOFlow
- WuXi XDC IPO: Trading Debut
- Max Healthcare (MAXHEALTH IN): Robust Financial Performance in Q2; Expansion Projects Are On Track
- Takara Bio (4974 JP): Smaller-Than-Expected Decline in H1FY24 Profit; FY24 Guidance Revised Downward
- InMed Pharmaceuticals, Inc. – 1QFY24 Review: Pharmaceutical Advances Continue
EOFlow Craters. Medtronic Stays Mum
- Five weeks after shares were suspended, EOFlow (294090 KS) shares resumed trading this morning, the 16 November. Wording is sparse on the resumption.
- One small consolation was that EOFlow may benefit from the temporary ban on short selling. Irrespective, shares have declined ~27% at the open, as I type.
- Elsewhere, Medtronic Plc (MDT US) provides no guidance. The only other news of note are the various court filings in the District Court of Massachusetts.
Key Points We Should Know Regarding the Current Status of EOFlow
- It can be considered that the suspension of EOFlow’s trading and, furthermore, the risk of delisting have been completely eliminated at this point.
- EOFlow emphasizes the possibility of circumventing sales of EOPatch by supplying EOPump to a JV in China. The key factors that initially sparked Medtronic’s interest in EOFlow are still valid.
- If CEO Kim fails to repay a stock collateral loan of ₩20B or secure additional loans, approximately 4% of the total issued shares could be sold in the market.
WuXi XDC IPO: Trading Debut
- WuXi XDC Cayman (1877628D HK) priced its IPO at HK$20.60 per share to raise the gross proceeds of US$470 million. The shares will start trading tomorrow.
- We previously discussed the IPO in WuXi XDC IPO: The Bull Case, WuXi XDC IPO: The Bear Case and WuXi XDC IPO: Valuation Insights.
- The market sentiment on the sector has modestly weakened. However, the IPO price is attractive, with our DCF valuation of HK$22.89 per share, 11.1% above the IPO price.
Max Healthcare (MAXHEALTH IN): Robust Financial Performance in Q2; Expansion Projects Are On Track
- In Q2FY24, Max Healthcare Institute (MAXHEALT IN) reported revenue growth of 17% YoY and 6% QoQ to INR18.3B, driven by higher ARPOB and occupied bed days.
- EBITDA grew 21% YoY and 14% QoQ to INR4.5B, leading to a 100 basis point YoY and 190 basis point QoQ margin expansion to 28.7%.
- MHIL expect greenfield 300 bed hospital in Dwarka, South-west Delhi will be commissioned in later half of Q4FY24. It was originally expected to be commissioned in Q2FY24.
Takara Bio (4974 JP): Smaller-Than-Expected Decline in H1FY24 Profit; FY24 Guidance Revised Downward
- In H1FY24, Takara Bio Inc (4974 JP) reported 41% YoY decline in revenue to ¥19.1B, dragged by 46% YoY decrease in revenue from reagents, which contributed 78% of total revenue.
- Operating profit plunged 87% YoY to ¥1.4B, 28% ahead of guidance, due to lower-than-expected R&D expenses. Net profit decreased 87% YoY to ¥1.1B, 67% higher than the guidance.
- Takara Bio has cut FY24 sales, operating profit, and net profit guidance by 15%, 63%, and 64%, respectively, as the company is anticipating a sluggish life science R&D market globally.
InMed Pharmaceuticals, Inc. – 1QFY24 Review: Pharmaceutical Advances Continue
- BayMedica registers strong Y/Y growth. Although BayMedica reported a 61% decline in sequential revenue in the opening quarter of its new fiscal year ending June 30, 2024, the $902K in sales reported for 1QFY24 was nevertheless almost triple the $321K generated in the year-ago quarter.
- The immaturity of rare cannabinoids ingredients market for health & wellness products makes it difficult to determine definitively any seasonality in the business.
- However, it should not go unnoticed that the sequential sales drop in the latest summer quarter does repeat the pattern reported in 1QFY23 when sequential sales at BayMedica declined by almost 40%.
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