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Wuxi Apptec Embraces a More Health-Conscious ChinaAfter a booming year in 2018, Wuxi has yet to slow down. The following article analyzes the success of Wuxi and its shortcomings. China has released a number of new policies to help make the biopharma industry more transparent and efficient. By 2020, China had full coverage of medical service systems in rural and urban areas; 90% of residents in China can access the nearest medical point within 15 minutes. Wuxi Apptec has achieved consecutive quarter-over-quarter revenue growth for 13 quarters since the first beginning of 2018 (other than the first quarter of 2020 due to Covid-19). Wuxi PharmaTech, a contract research and manufacturing organization, was founded by Dr. Ge Li in 2000. The company changed its name to Wuxi Apptec after Wuxi acquired Apptec Laboratory Services Inc., a US-based medical device and biologics testing company. Wuxi was delisted from the NYSE after going private, with a valuation of USD 3.3 billion. The company has thrived under the leadership of Ge Li as Wuxi went from just 4 people in 2000 to over 28,000 employees in 2021. Ge Li claims that the company's main mission is to provide high-quality research services at a low cost. Wuxi has been growing rapidly since its inception, but we expect more imminent growth as China rolls out new healthcare-related policies and people become more health-conscious. Although the thriving healthcare market will inevitably attract new entrants that may evolve into strong competitors, Wuxi Apptec is highly likely to withstand the competition. Rising health awareness While brands like GNC and The Vitamin Shoppe helped raise healthcare awareness in the west, China was lackluster in this department and put little emphasis on personal well-being. Over the past decade, however, China's healthcare industry grew exponentially as society's attitude towards healthcare took a massive turn. The rising disposable income has led to the paradigm shift from being reactive consumers to proactive consumers. 84% of 3,000 respondents in China, in a survey conducted by Ipsos, reported that they are consciously making health-oriented decisions now. According to a report by McKinsey, the global wellness economy, accelerated by COVID-19, has an estimated market size of USD 1.5 trillion as of 2021 with 5% to 10% annual growth each year. China reported the highest share of wellness spending online out of the six countries, including Japan. Monosodium glutamate (MSG) is a controversial flavor-enhancing ingredient for its possible adverse effects after consuming more than 3 grams. Major MSG producer Henan Lotus is experiencing a steady decrease in sales as the Chinese population, once the largest consumer of MSG, is becoming more health-aware. Bain and Kantar Worldpanel also reported that sales of chewing gums have also decreased by 14% in the last two years, chocolate sales decreased by 6%, and confectionaries decreased by 4%. Favorable policies President Xi announced the initiation of the Health China 2030 (HC 2030) plan in October 2016. The main goals are to prioritize healthcare on a national level, spur innovations in the healthcare industry, promote scientific development, and bring equal access to public health services to all parts of China, especially the country's rural areas. HC 2030 also aims to establish and enhance social policies and institutional systems regarding health, cultivate a healthy environment and intensively promote the advancement of the healthcare industry. Companies in the healthcare industry have seen something of a boost in their revenue as the healthcare trend continues. By 2020, China had extended medical service coverage so thoroughly that 90% of residents could access the nearest medical point within 15 minutes. The medical cost growth was also curbed as 2020 marked the lowest proportion of residents' medical expenditure in 20 years, with 27.7%. Government policies have favored the development of the healthcare industry in China, especially that of Contract Research Organizations (CROs) and Contract Development and Manufacturing Organizations (CDMOs). In 2015, China had a backlog of over 20,000 drug registrations pending review and approval. The National People's Congress (NPC) held a meeting to discuss the reformation of the drug registration system. As a result, China Food and Drug Administration (CFDA) regulators received more resources than in the past, and the government launched the Market Authorization Holder Program (MAH) to make it easier to bring new drugs to the market. Furthermore, the Review and Approve Process (RAP) was simplified and made more efficient. For example, high-quality generics for orphan conditions with robust bioequivalence data will be eligible for expedited review during the CFDA's regulatory process. As of July 2021, a rare disease database (Orphanet) has recognized over 6,000 diseases, propelling pharma companies to roll out more medicine that will undergo a newly implemented process. CROs and CDMOs benefit from these new policies as pharma companies look to increase their research output to develop and produce new drugs. The expedited RAP incentivizes companies to roll out new drugs to cope with the increasing number of orphan diseases recorded. The unique advantage Wuxi Apptec is a "fully integrated contract research development and manufacturing organization with the ability to provide one-stop services that offer its clients assistance in discovery, development and manufacturing service demands." The wide variety of services that Wuxi covers allows the company to embrace the soaring healthcare market in China. Wuxi Apptec expects to extend its impact further as the global new drug R&D outsourcing market snowballs. However, Wuxi must persist in its R&D investment to fare well against companies with more flexible cash flow and new entrants with newer technology. With a boom in customer demand, China's pharmaceutical R&D and manufacturing service market is expected to maintain its current high-speed growth. Wuxi's unique competitive advantage comes from its cost-efficient services. As of 2021, Wuxi has over 28,000 employees, most of whom are chemists, making Wuxi possibly the biggest employer of chemists in the world. Since the company has cheaper labor costs than the industry average, Wuxi can produce almost the same amount of research output for a fraction of the price (around 25% to 40% less than western companies' services). Additionally, policies such as the MAH, expedited reviews, and HC 2030 have encouraged pharmaceutical innovations in China. Wuxi can capture the rising demand from Chinese pharma companies with its rather high R&D efficiency. Although Wuxi may not have the financial strength of some significant pharma companies with in-house R&D departments, the company will retain its leading position as one of the most profitable R&D and manufacturing businesses in China. Financial metrics According to Wuxi's interim report this year, the company realized CNY 10.54 billion total revenue, a year-over-year growth of 45.70%. CNY 2.50 billion came from China, which represents year-over-year growth of 48%. This data showcases the company's ability to capture the rising healthcare tides and demands for research and innovations. 48% growth also marks the largest increase compared to the company's revenue growth in the US and Europe. Wuxi also has a 100% retention rate of its top 10 customers from 2015 to the interim of 2021. As of June 30, 2021, the company's new clients have contributed CNY 849 million in revenue. Frost & Sullivan published a market research report in June 2021, which ranked Wuxi Apptec first by market share in the China-based drug discovery CRO market, pre-clinical and clinical CRO market, and small molecule CDMO market. Bottom line The combined forces of new policies and rising healthcare awareness have put Wuxi Apptec in a prime position to consolidate its leadership in China. The company should remain profitable as long as it maintains below industry average labor cost, heavy investment in its R&D department and reasonable M&A strategies to help expand and improve Wuxi's services and operations. Given the recent regulatory crackdown on Chinese tech companies, Wuxi should tread carefully in its effort to capture a more significant share in the Chinese market. China's rapid growth in the healthcare industry bodes well for the nation, but what does it mean for its people? While the government poured resources into promoting innovations and development in the medical field, the affordability issue gained little attention. Although China has over 90% of residents with basic health insurance plans, it still poses a hefty paycheck for the average worker. Despite the rising wave of healthy living, China has to do more to provide sustainable healthcare. For the full article with the charts, please visit the original link.
OTC:WUXIF
by EqualOcean
Technology Services has been on fire for the month of OCT.The Technology Service sector has been extremely bullish for this month. One of the sector leaders on the heatmap across the board. This run may or may not stall out for a min. Hate that I didn't spot these trades. They are all now on my radar. I will only be eyeing smaller timeframes entries and exits due to the lateness of me now wanting to trade them. I'm a swing trader at heart, but I scale in often. Watch the TS sector over the next few weeks as a whole.
NASDAQ:PAYX
by DayTraderEarl
DARKTRACE Technical Levels Long Opportunity Without question DARK is a stock to be following in the world of AI and Cyberattacks which seem to be all we read about just lately See WEF for enlightenment . Technically we are sitting in the middle of a ascending channel which we have been trading inside of since June . I have drawn some levels using FIB to provide some areas of support and Entry if any one wishes to start scaling in . The IPO was 2.50 back in April and since then DARK has already printed 10.00GBP as a ATH on Sept 24 followed by a 30% retrace and now retesting those previous highs again although I am expecting the levels I have given to be claimed in the coming months. Appreciate Likes Follows and constructive feedback . See below for other Trade Setups
DLong
by SJTRADESFUTURES
1
$DKNG GETTING READY FOR A +40% MOVE!What Is the Accumulation Area? The accumulation area on a price and volume chart is characterized by mostly sideways stock price movement, which is seen by investors or technical analysts as indicative of large institutional investors buying, or accumulating, a large number of shares over time. Source: www.investopedia.com 1HR - Price trading sideways since late September. Analyst Price Target on $DKNG (TipRanks) High: 105 Average: 70.06 (44.01% Upside) Low: 41
NASDAQ:DKNGLong
by ivanlarav
QCOM probably good for at least a short-term swingWith today's weak inflation data, treasury yields are falling, which should be at least short-term bullish for tech. Qualcomm has an additional news catalyst from yesterday's announcement that they authorized a $10 B buyback plan. Qualcomm looks to be exiting oversold territory on the daily RSI. It's just under 15 forward P/E right now, with PEG under 0.5 and dividend yield at 2.2%. We may get some positive analyst coverage over the next week as an upside catalyst. I took a gamble on October 22 calls at the 128 strike.
NASDAQ:QCOMLong
by ChristopherCarrollSmith
11
Playing the Squid Game on South KoreaThe South Korean show Squid Game dramatizes, in part, the extremely high household debt levels in that country. With household debt-to-GDP highest in the world, South Korean 30-somethings owe an average of 270% of their annual income. Those are the kinds of household debt levels that could either plunge the country into recession as credit tightens or cause young Koreans to compete to the death on a dystopian game show for the entertainment of billionaire VIPs. South Korea looks better in terms of government debt-to-GDP, which allows room for government to provide household debt relief or economic stimulus by growing its debt. That's partly why South Koreans elected a center-left proponent of universal basic income in last Sunday's presidential election. South Korea's technology-heavy stock index trades at about half the price of other advanced economies on a free cash flow basis. Stocks have sold off sharply in recent months, setting up a possible short-term long-side mean-reversion play. By buying the index, you get large exposure to household names like Samsung and Hyundai. I also like some smaller names like South Korea Telecom, which trades at 2.75 forward P/E with nearly 5% dividend yield. But household debt remains a long-term risk for South Korea, so I think you carefully scale in. I took a small position here just to satisfy my FOMO, in case we bounce now that the presidential election is over. I am hoping for further selloff to about $26.20 to take a real entry-level position. I will add more at secondary support around $24. Because of the risk of a credit recession, I am sizing my position so that if I should happen to lose this squid game, I won't get killed. :) This is part of my recent initiative to diversify away from US stocks.
AMEX:FLKRLong
by ChristopherCarrollSmith
6
NASDAQ on 1D Buy SignalPattern: Channel Up on 1D. Signal: Buy as the price is at the bottom of the Channel Up, below the 1D MA100 (green trend-line, which has accurately given a long-term buy signal 3 times since November 2020) and the 1D CCI is on Higher Lows at its bottom. Target: Short-term 15100 (the 1D MA50), medium-term 15700 (Resistance and All Time High) and long-term 16350 (the 1.5 Fibonacci extension). ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** -------------------------------------------------------------------------------------------------------- !! Donations via TradingView coins also help me a great deal at posting more free trading content and signals here !! 🎉 👍 Shout-out to TradingShot's 💰 top TradingView Coin donor 💰 this week ==> Vergnes --------------------------------------------------------------------------------------------------------
TVC:NDQLong
by TradingShot
6
$EVH Merger with Walgreens Will Not Happen Sources SayWe all come here to notice that Walgreens is not interested in the Merger with EVH after digging into the company earnings and realizing there's a conflict of interest in proprietary technology. A Merger makes no sense any more spokesman said. "We'd like to notify private investors today to let them know that the deal doesn't seem to fit our model anymore as far as the health care management software Evolent has to offer" - Walgreens WACC% 15.48 ROIC -3.73 Operating Margin -4.18 Net Margin -7.28 ROE -11.23 ROA -5.35 3 Year EPS NRI Growth Rate -61.20 Net Income Operations -72.27 70% Worse than 606 companies Sloan Ratio -42.26 ROCE -4.49 1 Year Asset Growth Rate -7.30 1 Year Debt Growth Rate -21.80 1 Year OCF -881 1 Year Total Growth Rate 8.80 1 Year Revenue Rate Per Share 5.70
NYSE:EVHShort
by aivapes