Daily Brief Health Care: Moderna Inc, Shanghai Fosun Pharmaceutical (Group), Assertio Holdings and more

In today’s briefing:

Reminder: Earnings Quality Short Candidates: Moderna, Sonos, Knowles, Juniper Tech
Shanghai/Shenzhen Southbound Connect: Weekly Moves (11 November 2022)
ASRT: Asserting a Low Valuation

Reminder: Earnings Quality Short Candidates: Moderna, Sonos, Knowles, Juniper Tech

This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.
They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts. When the company’s issues become well-known, there is often multiple compression as well as a rerating.
These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings. This week: Moderna, Sonos, Knowles, Juniper Tech

Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry
Overall, the net inflow over the past week was ~HK$4.1bn, split (+HK$1.7bn) for Shanghai and (+HK$2.4bn) for Shenzhen.
The largest inflows were in Tencent (700 HK) and Wuxi Biologics (2269 HK). The largest outflows were inKoolearn (1797 HK)and China Mobile (941 HK).

ASRT reported third quarter revenue that were down from the second quarter due to ASRT deciding to remove Indocin from the Government’s voluntary 340b pricing program
The addition of Sympazan gives ASRT a new asset in growing revenue and adjusted EBITDA in 2023
ASRT reported third quarter revenue of $34.2 million compared to our estimate of $31.6 million. We were expecting ASRT’s commentary related to Indocin would yield lower revenue than it did.

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