In today’s briefing:
- Shareholder Vote On 6 June For Virtus-Backed Offer From CapVest
- Yunkang IPO (PHIP): Growth Still Largely Driven by COVID
- BCH: Solid Start Expected in 1Q22
- Vertex Pharmaceuticals (VRTX US): Trikafta Drove Q1 Results; 2022 Revenue Guidance Maintained
Shareholder Vote On 6 June For Virtus-Backed Offer From CapVest
- CapVest has a concurrent Scheme for Virtus Health (VRT AU) at $8.15/share and an off-market Takeover bid at $8.10/share (conditional on, among other things, the Scheme not proceeding).
- The Transaction Booklet is now out. The Scheme Meeting will be held on the 6 June. If not approved, the Takeover closes on the 5 July – unless extended.
- The Virtus Directors unanimously recommend shareholders vote in favour of the Scheme; and accept the CapVest Takeover should the Scheme not be approved.
Yunkang IPO (PHIP): Growth Still Largely Driven by COVID
- Yunkang Group (2325 HK) is a medical operation service provider in China and offers a full suite of diagnostic testing services.
- The company’s IPO application has been approved and plans to raise about US$139m. In this insight, we have highlighted some of the key new data points from PHIP filing.
- Revenue grew 8.8% YoY in 2021 excl. Cov-19 tests (vs 80.2% from Cov-19 tests) and we are yet to see major improvements excluding the positive impact on margins from COVID.
BCH: Solid Start Expected in 1Q22
- Reiterate HOLD rating with a TP of B21.00 derived from 14.36xPE’22E, which is close to -2SD of 3-years trailing average.Despite significant drop in 2022E earnings, we recommend a trading approach
- We estimate 1Q22E earnings to be the peak quarter at Bt2.3bn (+613%YoY,-7%QoQ), supported by YoY rise in COVID-revenue, but QoQ decline by margin erosion.
- We foresee earnings momentum to weaken in 2Q22, underscored by lower COVID-19 contribution, resulting from falling infection patients and stopped RT-PCR requirement.
Vertex Pharmaceuticals (VRTX US): Trikafta Drove Q1 Results; 2022 Revenue Guidance Maintained
- Vertex Pharmaceuticals (VRTX US) reported Q1 revenue of $2.10 billion, a 22% y/y increase, reflecting continued growth in the number of cystic fibrosis (CF) patients treated globally.
- Vertex reiterated full year 2022 product revenue guidance of $8.4–8.6 billion. However, the company raised 2022 adjusted R&D and SG&A expenses by 5% at mid-point.
- The company has a broad pipeline beyond CF and the pipeline progress calls for continued investment for R&D and SG&A. This may pressurize near-term profitability of the company.
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