Member Info for Jatw

HK has a strange practice of companies issuing actual revenue and estimated profits as market updates. Innocare and Innovent have both reported this way in the last week.

Innocare revenue up more than 130% and moved into a profit for the first time.

Innovent revenue up more than 40% YOY to 11.9bn RMB they moved close to profit in H1 and are set to report a FY profit for the first time

Shanghai Junshi Bio - revenue up nearly 30% loss expected to fall by 30%

Against this set of improving competitors, HCM needs to return to strong sales growth.

It will report a profit in 2025 based on the SHPL disposal, but not from its portfolio of drugs. I can see 2026 getting modest income growth from additional royalty revenues and the early NDA approvals, Strong growth only likely when AZ gets global sales of Savo going and if Sovlep is approved in H1 2027.

Licensing revenue and ATTC product developments are wildcards with upside but are unpredictable in timing and size. If AZ/Sovlep/ATTC fail to deliver, then HCM is looking like it needs a merger/takeover.

Maybe the $15bn investment will help smooth things over.

From the financial report:

Sales of FRUZAQLA (for colorectal cancer) were JPY 42.9 billion (JPY +6.8 billion and +19.0% AER, +19.9% CER). The

increase was primarily due to the successful launch in Europe, Canada and Japan, as it addressed a need for new treatment

options in metastatic colorectal cancer. The increase was partially offset by a sales decrease in the U.S., impacted by the

Medicare Part D redesign.

Today, Takeda has announced 9m sales of approx $286m (using 150y = 1$).

The last quarter sales were Y15.6bn which is slightly over $100m. (I have a vague memory of that triggering a milestone payment - unless if was $400m over a year in which case they are on track to hit that in the middle of this year)

Takeda has obtained approval / launched in 38 countries with Portugal, Belgium, South Korea and Mexico added in the last quarter.

There is no mention of label expansion yet, but I would expect early laboratory trials/ AI simulations with other Takeda assets are being considered……Takeda has a large portfolio of product so only comments on imminent approvals / launches. Hutchmed may be able to tell us more. The Frusica-2 combination would appear to be an obvious outcome to replicate / imitate with another asset.

Overall good news on the royalty front from these sales.

If HCM is serious about maintaining a European listing it needs to leave AIM and join the main board which would open up marketing to more institutional investors/funds. Being listed overseas it does not quality for the main AIM belenfit of reduced IHT so there is little incentive for UK funds to own it.

Pricing is now down to HK and Nasdaq with AIM an irrelevance (spreads are wider when HK/NY is not open. Most platforms allow Nasdaq and some HK trading…..

Looking forward to some positive news this year about ATTC and Sovlep partnering.

Bye bye AIM, hello main market….a churn of fund holders will happen,,,,hopefully the AIM only crowd has already left and the FT250 lot will start buying in leading to a rally.

Without seeming completely heartless, the BBC this morning is running a lot of emotive stories about high vet fees. Do people not think they need to give pets private healthcare at a high cost or put them down.

The regulatory changes proposed by the government will increase costs further, not by much but regulatory bodies have a habit of scope creep and fee creep over time. The bigger groups will cope better.

Best to see how others are affected before jumping into them. MNG has a relatively modest ground rent exposure itself, but it has more in its customer funds which will be a drag on performance. LGEN, AV, PHNX may well have larger exposures.

The problem for financials and other service businesses is this sets a precedent, what is to stop the govt capping overdraft fees or credit card interest rates, or monthly account fees for platforms….or lawyer hourly rates…...

CKHH seems keen to get the ports deal done in whatever shape it can.

Latest reports indicate they are packaging blocks of ports for different levels of US/EU/China ownership. China said to indicate this would be possible.

The industry has reported significant growth in the 9m to sept 25.

Gross premiums said to be up from 170bn to 265bn HK$ more than 50% uplift.

We will find out soon whether Pru has maintained its market share…..even losing a few percentage point of market share should result in significant sales growth in HK which is the most important market for Pru.

UK wealth/asset managers have reported strong trading updates, particularly those operating in emerging markets. That is another trend that I would like to see Pru reporting (for its institutional investment mandates).

Bodes well

A good structural revenue driver thanks to COVID. The cost of living works in the other way, so maybe a good 2028-2033 and then a drop off?

Then there is the long term demographic change (not sure which way this goes for pets) and the Net Zero brigade who think pets are an extravagant waste of resources and should not be allowed, these are both making owning pets more onerous.

One to hold for the next 5 years but keep an eye on the macro trends.

Not surprised these have popped their head above £2. That was a terrific update…..imagine what effect fees being 18% higher will do to the bottom line in 2026.

I think this is looking up, I bought some around 1340 in early January

….and looking down under for decent growth in the business.

Downside is continued bad press about vet costs…..but this is the UK and most adults do not appreciate the true cost of their ‘free NHS’….so this carries over to vets who should be earning similar money to doctors given their qualifications.

Strong update….and a move to the main board.

One of my other holdings moves next week…hoping it is a positive move.

Apologies for the acronyms Trotsky has correctly identified them as Trump always chickens out - so ignore what he says and hold or treat it as a buying opportunity for the rebound.

And Discretionary Fund Manager - I have my DC pension drawdown fund with one. I am intrigued as to why they do what they do. They held a pathetically small position in MNG, sold it and reinvested in Lancashire. That has bounced because of the bid for Beazeley and they are up slightly over holding MNG. Clearly they think MNG has run far enough and is looking expensive.

I am not going to follow with my personal holding of MNG, although some would suggest beginning to take some profits and diversifying..

They got my DC pension savings this year…..maybe they will get my ISA/GIA in due course when I see how they go.

My DFM sold MNG last week. I am keeping my own holding.

Holding up well in the face of Trump’s tariff threat….others have wilted.

Shows strong support at these levels and ready to push on when TACO happens.

A strong (predictably) trading update…..hopefully will go well today (except for Trump effect)

There is enough negative in the business update to think the SP would have lost significant ground without the takeover.

As long as BWS does not chicken out the deal will complete relatively soon.

There is v limited value in staying with Just to collect the additional 1-2%