Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Trinity Delta also published a new detailed research note on Thursday
https://www.trinitydelta.org/wp-content/uploads/2023/09/HCM-Outlook-230907.pdf
As the majority shareholder I wonder what CKHH would want in order to be tempted 1 pencil?
Reads very well davey, noticeable change in tone towards commercialisation and shareholder value.
Still think takeover is the most likely option tho.
The Company has just posted a new Corporate Presentation with various updated content including Savo BTD
https://www.hutch-med.com/wp-content/uploads/2023/09/pre230906.pdf
..more nodding required ..lol
Quite an open piece here, interview with Commerce Secretary Raimondo
“Not decoupling our economy is critical, not just for our economy but for our national security,” she said. “We have to do business where we can, communicate and have dialogue where we can, and never compromise our national security.”
https://www.cnbc.com/2023/09/05/secretary-raimondo-us-businesses-are-desperate-for-dialogue-with-china.html
Nod nod nod nod!!
"If you already have shares in Chinese companies, you will have endured a painful few years."
https://www.thisismoney.co.uk/money/investing/article-12473145/The-dragon-wounded-time-invest-China.html
I can hear davey nodding in agreement (for the whole evening : ))
That's a fair old read compo, but agree with the gist China is in good shape overall, so many companies either setting up shop or expanding, MacDonald's one of the latest.
The US/China business partnership announced below sounds very encouraging, something tangible to build on - it also means both sides are willing to co-operate.
Some context on the chinese economy/markets
https://research.gavekal.com/article/making-sense-of-the-china-meltdown-story/
China and the United States will establish a new communication channel between their commerce authorities, according to a statement released by China's Ministry Commerce.
During his meeting with US Commerce Secretary Gina Raimondo on Monday in Beijing, Chinese Commerce Minister Wang Wentao and his US counterpart agreed to form a working group. This group will comprise deputy ministerial and bureau-level government officials from both countries alongside business representatives, to seek solutions to specific commercial issues, said the statement.
https://www.chinadaily.com.cn/a/202308/29/WS64ed3e56a31035260b81eb4c.html
Excluding US tensions, where else is there such a favourable business environment.
Despite all of the headline actual companies are falling over themselves to do business in China.
The bio pharma market seems to be back on a roll over the last week - in HK/China.
And the good news for HCM keeps on coming. I doubt they were expecting BTD for the Savo gastric cancer line…..it is a small scale study at 60 patients…but seems to take a while because of its end points….first patient enrolled in March this year, hopefully BTD will allow a faster accumulation of the cohort…still 2026 before new revenue arises.
Authorities are certainly pulling out all the stops, could get very squeezy as momentum shorts have try to cover.
China has significantly cut stamp duty on share trading in a bid to boost market activity
"We are very pleased to see the State Council's latest policy to further optimize the foreign investment environment and increasing efforts to attract foreign investment, especially the clear mention of accelerating the landing and operation of foreign investment projects in the field of biopharmaceuticals," said Leon Wang, executive vice-president and international and China president of AstraZeneca.
https://www.chinadaily.com.cn/a/202308/28/WS64ebcef0a31035260b81e6cb.html
8k of shares traded across the pond, should make the 'days to cover' figure interesting for short side..
The messaging from the medical community associated with FRESCO2 and the FDA rolling submission indicates to me that approval is highly likely….and that will unlock substantial sales for Takeda with approx 20% royalty for HCM.
in which case the question is how much of the value is already included in the SP?
Will there be a burst of speculative activity or will the market just shrug and wait for 2024-25-26 financial results?
might be more helpful to reverse engineer what a $xbn company needs to achieve.
larger (steady state?) pharma trade on 12-15x earnings they also carry debt, so their enterprise value is higher. hcm has no debt so maybe we ought to consider 20x earnings, so $10bn (4x todays value), it would need to be making $500m profit pa.
if takeda can make fru*****inib a blockbuster with $1bn usd sales ex-china that will provide about $200m. there will be other ex-china royalties - say they make $250m in total from royalties that leaves them to make $250m in china.
say they cover $300m pa in r&d costs that is $550m net margin which means about $1100m revenue target for china. they are currently at $200m pa across three products. some new indications plus some new products will raise the revenue targets but 1100 feels quite a stretch from here.
if they can cover r&d costs from china sales, then royalties could support $4-5bn mcap
there are so many assumptions even at this very high level…..but the direction of travel will certainly be clearer at the end of 2024 and i can certainly see a route to supporting double the current valuation.
at the moment cash + jv + fixed assets means little value is attributable to the pharma products. so it would appear the only way can be up.
Yes, indeed, Innovent produced strong financials after the market yesterday. They raised revenue by 20% and they are very close to an operational profit and have $1.2bn in cash. They are at a similar inflexion point to HCM - but are larger with a more extensive product set and partnerships, including a strategic investment by Sanofi. I am hopeful the two companies will follow similar paths to success. We can all do with some diversification.
These transitional pharma cos will soon be routinely generating cash from operations…..what will they choose to do with it?
If shares are still unloved, then a buy back will boost eps…..if they shares have doubled from here, then a 1-2% yield via dividends seems appropriate…..plus more (but focused) R&D.
I think China will want to see some local champions emerge so expect in market consolidation to reduce overall costs and duplicate R&D.
Well done on your Innovent call Jatw, might be helping us too - HK up 2% also
Small volume, volatile, but at least it's not down today
Does anyone have any estimate (guess) about what the share price will be in 5 years time, just curious if people have any faith in DCF models....??
As was commented on recently, very very low volumes being traded these days, 35 mins in and 1500 shares traded
Gina Raimondo is heading to China next week with an olive branch - hopefully there will be some positives to come out of her meetings