“Our greatest concern is the impact from an escalation of the trade conflict into a vicious cycle of tit-for-tat measures between major economies,” said Chan Chun Sing, Singapore’s minister for trade and industry, in parliament earlier this week. He was absolutely right. Last night US president Donald Trump said that a 10% tariff on US$200 billion of Chinese products would be imposed as soon as September. It comes only a few days after both countries slapped US$34 billion tariffs on each other’s goods. “Trump reloads the tariff bazooka,” was how DBS Group described it in a note to clients this morning. Asian markets sold off from the open. The Shanghai Composite was down 1.9% while the Hang Seng gave up 1.6%. The Nikkei wasn’t far behind – it fell 1.4% – while the SGX and the ASX were off by 1% and 0.6%. If traders aren't already on holiday, expect them to head for the beaches now.
HealthInvestor Asia’s focus this week has been on Top Glove Corporation. The world’s largest rubber glove manufacturer has started proceedings against Adventa Capital and two directors for up to M$714.9 million (US$177 million) over what it calls “a conspiracy” to defraud Top Glove over its M$1.4 billion acquisition of Aspion in November last year. We have the details. Analysts have mostly cut their ratings and target prices. UOB Kay Hian maintains its “sell” with a lower target price of M$7.80; Raymond Choo, analyst at Kenanga, said: “We came back from Top Glove’s analysts briefing feeling less optimistic about the short-to-medium prospects in Aspion as irregularities discovered could prove a temporary setback with the profit guarantees at risk of not materialising”. He reiterates his “underperform” rating with a lower target price of M$8.20. DBS Research maintains its “fully valued” rating and target price of M$8.66, while PublicInvest Research analyst Chua Yi Jing is bearish. “Though the stock plunged 24.5% yesterday [Monday], we maintain our “trading sell” call as we think that the stock performance will remain weak given the uncertainties and downside risks of the legal issue i.e risk of impairment, long drawn litigation process and lawsuit fees,” she said. The target price was also cut to M$9.65. Even the reliably bullish Maybank Kim Eng downgrades the group to “hold” though it maintains its price target of M$12.90. On Monday, Top Glove shares crashed as much as 30% at one point and both prop trading and short selling had to be suspended. The stock traded more soberly yesterday, clawing back 7.8%, but today its shares were last seen down almost 3% at M$9.61. There has also been a knock-on effect for Adventa Capital-owed medical services company Adventa. It has been forced to abandon plans to raise M$80.2 million in an AmInvestment Bank-led complex rights issue.
Shares in China Isotope & Radiation, which manufactures diagnostic and therapeutic radiopharmaceuticals products, fell 6.9% on their debut on Friday. It priced its HK$1.7 billion (US$220 million) IPO on the Hong Kong Stock Exchange at HK$21.60 per share. It sold 80 million shares above the middle of the indicative range of HK$17.80 to HK$24.20 per share. This represents 25% of the share capital. Sole sponsor is CICC and joint global coordinator along with CLSA. They are also joint bookrunners with ABC International. Its shares remain under water and were last seen down 1.2% at HK$21.05.
Beijing-based oncology big data company LinkDoc Technology has raised US$150.7 million Series D funding from sovereign wealth fund China Investment Corporation. Founded in 2014, LinkDoc collects and standardises healthcare data of more than 3,000 diseases and then provides data to healthcare regulators, researchers, insurers and pharmaceutical companies.
Hangzhou-based Biopharmaceutical company Adlai Nortye Biopharma has raised US$53 million Series B funding led by YuanMing Capital. Matrix Partners China, DT Capital Partners and Yahui Precision Medicine Fund also participated.
Sisram Medical, a Israeli subsidiary of Shanghai Fosun Pharmaceutical, and which manufactures medical aesthetics devices, has laid out its vision to become a global medtech leader, leveraging its solid funding channels, strong r&d capabilities and comprehensive portfolio of products.
Kenanga Research has a look at Nova Wellness Group which is to raise M$44.9 million in an IPO on the Bursa Malaysia’s ACE board. It is selling 81.7 million shares at M$0.55 per share. Kenanga is principal adviser, sponsor, underwriter and placement agent. “We like Nova Wellness for superior margins, which are head and shoulders above its peers, and new capacity expansion to boost earnings. Our indicative target price is M$0.60 based on 15x FY19E EPS,” it said. Less surprisingly, PublicInvest Research is also positive on the group’s “thick profit margin” and has it at a fair value of M$0.62. It lists on 20 July.
It has been a long process, but according to reports in The Mint newspaper, IHH Healthcare, Asia’s largest healthcare company, is likely to acquire a 51% stake in Fortis Healthcare, the country’s second largest private hospital chain, for up to US$786.4 million. It reports that IHH Healthcare will first buy around 25% through a mix of direct acquisition and preferential allotment, and then make an open offer to buy at least an additional 26%. It is also likely to acquire RHT Health Trust, the first business trust listed on the Singapore stock exchange with a portfolio comprising healthcare assets in India, separately. Shares in RHT dipped as low as 3.9% yesterday before closing down 2.6%. Today they lost another 1.3% to S$0.74 (US$0.55)
Singapore government investment company Temasek Holdings has taken a US$50 million stake in Asia Healthcare Holdings (AHH), an operating and investment platform founded by TPG Capital.
Adelaide-headquartered health informatics company Alcidion Corporation has signed a five-year deal worth more than A$4.75 million (US$3.5 million) with ACT Health to deploy an electronic patient journey board solution, that fully integrates its Miya Flow, Patientrack and Smartpage software components.
In other legal news, private specialist healthcare provider Singapore Medical Group has agreed a settlement with the owners of Eastlife Private and Maxglobe Private. The case has been settled “with no liability on the part of the company and its subsidiaries,” SMG said.
