In today’s briefing:
- Trading Plays on Samsung C&T’s Holding Company Shift and Biologics Share Sell-Off
- China TCM (570.HK) Update – The Disappointing 24H1 Results Will Not Affect the Privatization Process
- [Akeso Inc. (9926 HK, BUY, TP HK$63) TP Change]: Too Many Positives to Count…Reiterate TOP BUY
- D. Western Therapeutics Institute (DWTI) (4576 Jp) – 2Q Follow-Up
- Opthea (OPT AU): Getting Closer to Commercialization of First Drug; Fund Raising Adds to Confidence
- Merck & Co.: Expanding Market for GARDASIL
Trading Plays on Samsung C&T’s Holding Company Shift and Biologics Share Sell-Off
- Samsung C&T’s holding company ratio is closing in on 50%, driven by the Biologics rally, which has Samsung on high alert for a forced conversion.
- Watch Samsung’s moves to avoid forced holding company status. The old Biologics-for-Electronics swap isn’t viable, so they’ll likely sell Biologics shares to lower the ratio.
- Samsung C&T might sell Biologics shares at a ₩80T market cap. They’ve boosted construction to manage assets and the holding ratio, but beyond ₩80T, risks increase.
China TCM (570.HK) Update – The Disappointing 24H1 Results Will Not Affect the Privatization Process
- China TCM’s 24H1 results is weaker-than-expected. Net profit YoY growth for the whole year of 2024 could be negative. Based on calculation, without privatization, HK$3.26/share is fair for China TCM.
- The remedial tax is a “one-time expenditure” to clear the “obstacle” so as to smooth the completion of privatization. Weak financial performance in 24H1 should help the shareholder vote.
- Due to the low base in 2024, 2025 is expected to see an obvious performance rebound.Long-term outlook of TCM granules business is still promising, reasonable share price is above HK$5/share.
[Akeso Inc. (9926 HK, BUY, TP HK$63) TP Change]: Too Many Positives to Count…Reiterate TOP BUY
- Akeso reported C1H24 top line, non-IFRS operating loss and IFRS net loss 10% above, 13% narrower and 3.5% narrower than our estimates.
- The most positive takeaway from the result is the Phase III start of CD-47 mAb (AK117), which can potentially be a global first-in-class (FIC).
- We raised TP from HK$58 to HK$63 and reiterate our TOP BUY.
D. Western Therapeutics Institute (DWTI) (4576 Jp) – 2Q Follow-Up
- DWTI held a 1H results briefing via ZOOM webinar on Friday 8/23 at 13:30, hosted by President Hidaka.
- Several important points came up in his answers to questions from analysts during Q&A at the end of the briefing.
- 1) Dosing in H-1337 PIIb trials in the US has been completed, and in the year-end publication of top-line results, the key expectation is to show non-inferiority of ROCK inhibitor H-1337 (1.0% once daily) versus existing beta blocker Timolol (0.5% twice daily).
Opthea (OPT AU): Getting Closer to Commercialization of First Drug; Fund Raising Adds to Confidence
- Opthea Ltd (OPT AU) completed enrollment in two Phase 3 trials for sozinibercept in wet AMD. Topline data from these trials are expected by mid-2025.
- During FY24, Opthea raised $295M to extend runway through topline data readouts of Phase 3 clinical trials. Further, in July, Opthea raised $38M through retail entitlement offer.
- Although Opthea is well-funded through mid-2025, any fund requirement beyond that period will be easier to meet amid lower interest rate scenario.
Merck & Co.: Expanding Market for GARDASIL
- Merck & Co.’s second quarter earnings call underscored both the progress and challenges faced by the company as it pushes forward in an increasingly complex pharmaceutical landscape.
- The company reported a solid quarter with total revenues reaching $16.1 billion, marking a 7% increase.
- This growth is particularly impressive when considering the 11% increase when excluding the impact of foreign exchange.
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