In today’s briefing:
- Fangzhou Group Pre-IPO Tearsheet
- Time to Get Defensive After 1.5-Month Uptrend Breaks; High Yield Spreads Widening Much Like Mid-Aug.
- Becton Dickinson and Co (BDX US): EO Ruling Is Positive; Strong Base Business to Drive Growth Ahead
- Beijing Tiantan Biological Products (600161CH)-A Good Defensive Investment Target but May Overvalued
Fangzhou Group Pre-IPO Tearsheet
- Fangzhou Group (FANGZHOU HK) is looking to raise about US$300m in its upcoming HK IPO. The deal will be run by Citibank, UBS and ABC International.
- Fangzhou Group is an online chronic disease management platform in China, considered the largest in terms of average MAU in 2021, according to CIC.
- It focuses on common and chronic diseases such as hypertension, cardiovascular and respiratory chronic diseases, providing tailored medical care and precision medicine covering the full disease cycle for patients.
Time to Get Defensive After 1.5-Month Uptrend Breaks; High Yield Spreads Widening Much Like Mid-Aug.
- Since early-October we have discussed our expectation for a bear rally, targeting the 200-day MAs on the $IWM and $SPX; targets were hit (within 0.5% of hitting on SPX).
- We are now seeing short-term uptrend breaks on the IWM and the DJIA; this is a good time to get defensive and/or take profits, as the 1.5-month rally appears over.
- We expect more weakness in the weeks ahead, and we cannot rule out another test of the 2022 lows.
Becton Dickinson and Co (BDX US): EO Ruling Is Positive; Strong Base Business to Drive Growth Ahead
- Ruling on Ethylene Oxide in favor of Sotera is a positive for all the medical devices companies including Becton Dickinson and Co (BDX US), who have EO sterilization facilities.
- In FY22, BD reported strong base business, which grew 6.9% y/y on reported basis. On currency-neutral basis, base business increased 9.4% y/y in FY22, accelerated from 8.1% in FY21.
- FY22 marks 51st consecutive year of dividend increase for BD, which makes it one of the leading dividend yield stocks. Currently, the stock has a dividend yield of 1.53%.
Beijing Tiantan Biological Products (600161CH)-A Good Defensive Investment Target but May Overvalued
- Tiantan is a good defensive investment target in unfriendly external environment to control the pullback due to its advantageous background and resources, but its profit margin/efficiency needs to improve.
- After a large performance decline in Q1, Tiantan recovered well in Q2, but due to the pandemic and some acquisitions/resource integration, its profit performance declined in Q3.
- Tiantan’s performance growth is expected to slow down in 2022, with single-digit YoY revenue growth. Accordingly, the current valuation may have overdrawn certainty.
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