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Where do you see this stock this time next year? I envisage £60 a share, assuming there’s no market crash. If we face another lockdown and we end up in recession or even depression and things plummet, then looking forward to loading up on this amazing stock. Strong hold/buy for me.
AW, sixty quids from five??
Are you not over optimistic??
However, I don’t want to comment if such valuation is possible or not.
I have experienced the thrill when the ‘‘old/undiluted‘ hcm shares climbing from £10 to £59 (end of 2017) and in the same breath, I want to add the stomach wrenching experience of grand falls too!
If you have any numbers, like valuation of individual therapeutic candidate in the pipeline would be helpful in envisaging the future.
I doubt it is feasible for an individual to have the knowledge or resources to assess future profitability so I rely on the analysts to produce a sum of the parts estimate.
The company website references research from Edison and Trinity Delta.....I assume this is paid for by the company for it to be made available. Tracking changes in their results /models is the best way to understand how the business may develop.
Both these have a value that is higher than the current market value....but there are huge assumptions around all parts of HCM except its commercial division.
The other reference point is that GA targets companies with high revenue growth.
Without major market moves or a takeover, I expect the SP to grow as the pipeline matures.
I could see 600p next year and 700p in 2022 as achievable, but the market tends to anticipate growth and may overshoot....we may be here at present and there could be a drop back under 500p. If that happens in the absence of adverse news it is a buying opportunity.
Sensible write up, Jatw. Thanks.
Is the present market valuation (£3.6 billion) for a pharmaceutical research company with a pipeline of this nature, a separate commercial arm and partly owned by CKHH, realistically closer to the true value?
What could be the individual valuations of drugs ready to be launched, drugs waiting for final approval and drug candidates in different stages of clinical trials? Is there another company of similar size and with similar pipeline for comparison purposes?
Forgot to add, ..as a holder of 10 odd years, I keep asking these questions and continue to hold my shares.:)
And today we have the acceptance for review of the second surufatinib NDA.
To respond (not answer) some of your questions about valuation amones:
We see big pharma takeouts of oncology companies at USD 3-6bn. These companies often only have one successful product, but it is a first line treatment and so have a high potential revenue. Imagine if Savolitinib were tagrisso?
Being Chinese may be a hindrance....although Beigene etc have got multi billion investments for US pharma.
Being part of CKHH has been a help (strong parent) but has led to a DIY and junior partner approach. If HCM were created 10 years ago rather than 20, they might go for a mega IPO and raise billions rather than 100m per funding round.
HCM is what it is - a self sufficient reasonably well funded organisations with a deep pipeline which requires deep pockets to develop it globally. It will get there, but it is more of a fast tortoise than a hare.
I continue to hold and add. Although at 25% of my portfolio I should diversify.
Another good post, Jatw. Thanks.
To my query of low market valuation despite a deep pipeline, you seem to think ‘not owning a first line therapy’ could be one of the reasons. Would Surufatinib be able to fill that void to a little extent? As per information provided yesterday by the company in relation to the second NDA acceptance by the authorities, it is mentioned ‘there is no effective therapy’ in China for advanced Pancreatic NET. It also says ...’In the U.S., the Food and Drug Administration (“FDA”) granted Fast Track Designation status to surufatinib for both the non-pancreatic NET and pancreatic NET development programs in April 2020. Chi-Med has initiated preparatory work for the U.S. NDA and intends to utilize a rolling submission, which is expected to start in late 2020. In addition, the Marketing Authorization Application (“MAA”) submission in Europe is planned for 2021’
We can, at least, keep our fingers crossed! Of course, we are following a faster tortoise and not a hare!!
Btw, on stockwit site, yesterday’s post- market sp of ADRs has gone up by $1.74 or 5% raise! I doubt if it is accurate.
I doubt that stocktwits price too. Yahoo was showing a small down movement post market close.
I agree that surufatinib will be a first line treatment.....the big money has been in breast cancer and lung cancers...HCM should earn good money from it for many years.
..I think the problem for all companies is the ability of scientists to subdivide broad treatment categories into bio markers which means narrower approvals than in the past.
The continuous improvement in Outcomes of approved drugs means that trials have to beat new standards of care and run for longer. This should provide a competitive moat to offset the narrower labels.
BTW from what I could tell, the fruqintinb poster looked promising. The sanet ep data provided good disease control and observable responses in a good proportion of cases. Hopefully the approval will land soon as it has been with the Chinese authorities for a while already.
Nice interview with CH today, closing quote is: "We have a $5 billion market cap now. The next stage is for us to get to $20 billion.”
Also mentions the HK IPO could be as soon as next year.
www.barrons.com/articles/how-this-nasdaq-u-k-listed-chinese-biotech-is-revolutionizing-cancer-treatment-51600334200
Does CH say how? Or his timescale?
(Sounds like a DCR post - is it?)
I’ve been saying for some time that the Company will reach $20bn. The pipeline will deliver, and if you look at Beigene with a similar size pipeline, but smaller revenues, that is already at $20bn so this is very realistic in the next few years
I continue to Buy