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China Pharma’s strategic pivot and global impact
Healthcare
David Scott argues US efforts to lower drug prices are unintentionally accelerating the rise of Chinese pharmaceutical firms. Rather than exporting drugs, Chinese companies are licensing them to US firms and avoiding tariffs. This shift reflects a deeper evolution: China Pharma is moving from capital-intensive manufacturing to IP-driven innovation, as rising R&D-to-sales ratios confirm. Meanwhile, incumbents like Eli Lilly and Novo Nordisk face over-earning backlash, political scrutiny and disruptive competition. AI is also accelerating China’s lead times on drug development, especially in areas like obesity. David highlights Jiangsu Hengrui, 3SBio, Hansoh and Innovent as part of this structural shift. While many US investors tell him that they “can’t buy China”, he warns they can’t afford to ignore it, given the bearish implications for Western pharma incumbents.
Edition: 215
- 11 July, 2025
Consumer Discretionary
An off-the-radar winner of the evolution of Amazon’s ambitions and role in the auto ecosystem - AMZN is not looking to own, prep and ultimately sell cars, but is instead looking to provide more content on its marketplace and to help dealers reach consumers. It was likely to have been a very competitive environment for a back-end auction platform to get status with AMZN and the fact that ACV has been chosen as its partner, signifies something special about the approach it is bringing to the market from a technology and go-to-market standpoint. Northcoast is increasingly confident in the company's growth trajectory and considers the pullback in the shares YTD as a buying opportunity. TP $28 (100% upside).
Edition: 208
- 04 April, 2025
MSCI World hits a new high
There is a new high on the MSCI World Index, but not on US indices. Valerie Gastaldy points out that this seldom happens, but European Equities are responsible for this improvement. Bonds remain in medium-term bearish trends and may have reached their best level for the coming weeks. The Dollar still has a chance of resuming its rally, though it fell below the first key level and may simply resume the long, erratic evolution of the previous two years. Valerie’s MSCI World targets are still at 3960 and 4018, while the invalidation is unchanged below 3778.
Edition: 205
- 21 February, 2025
Evolution (EVO SS) Sweden
Consumer Discretionary
A leader in its industry with strong growth potential and >60% operating margins - regulatory hurdles and scale make it very difficult for operators to compete. The online casino industry has been growing at a 24% CAGR over the last 5 years but still only makes up 22% of the market. There is plenty of growth ahead and market share to win for online casino and EVO, and Ben Jones expects double digit growth to continue for the medium term. He believes EVO can generate far more cash than its current valuation and 12x forward P/E would suggest, and thinks it is a good buy at current levels.
Edition: 203
- 24 January, 2025
US: Too early to be bearish
Despite the new year, a dramatic shift in the US political scene, and a hawkish evolution for the Federal Reserve, Paul Krake notes that the investment landscape remains dominated by a single narrative—Artificial Intelligence. AI and the companies driving it will dominate the investment framework for years to come. The focus on global beta remains concentrated in a few Pacific Coast technology firms hyperscaling AI. While there are other narratives—clean energy deployment, infrastructure, expanded military capabilities, and even weight loss—these themes feel secondary to AI. It is the singular force capturing society’s imagination, driving productivity, and, for some, feared as an existential threat. The supremacy of the US economy, home of the world’s greatest companies that will drive AI, is a more powerful force than the uncertainty over the Trump presidency or the Fed not easing as quickly as short-term allocators would like.
Edition: 202
- 10 January, 2025
Evolution (EVO SS) Sweden
Consumer Discretionary
EVO was one of the ideas pitched at Revelare’s recent Investor Idea Event - the presenter's bear thesis focused on both fundamental and regulatory concerns. Growth is slowing, yet the multiple remains in the high teens. ~60% of the company’s revenues are derived from unregulated markets, but there is a movement afoot to regulate EVO and others like it in China and Japan, which is what is impacting growth. Furthermore, the presenter believes evidence exists that EVO has been receiving compensation from aggregators’ transactions to customers associated with illegal activity and that heavy restrictions will be placed on its business soon. 40%+ downside.
Edition: 201
- 13 December, 2024
China: This ain’t no Japan!
According to Diana Choyleva, Beijing's multi-faceted U-turn on economic policy could mark a watershed evolution of its development strategy towards balanced growth and restored confidence. The demand stimulus includes unleashing greed via equities support and removing dogmatic views towards house price increases. Further fiscal stimulus is expected in October. A holistic strategy aims to address structural demand and confidence issues alongside supply-side reforms. Beijing is signalling that local officials face no negative repercussions if they experiment with policies. China's lack of equity bubble, room for productivity growth and learning from Japan’s mistakes suggest it can avoid Japanification. The growth-focused pivot renews China's appeal to the Global South but won’t change the “uninvestable” narrative in the West. Diana says these structural shifts should provide ongoing support to Chinese equities; the current levels and any market pullbacks are attractive entry points for long-term investors.
Edition: 196
- 04 October, 2024
Argentina: Should we worry about the Treasury’s short-term debt?
The stock of zero-coupon ARS-denominated LECAPs soared in recent weeks, with the total outstanding value reaching ARS17.8trn. On top of this, the government is in conversation with banks to transform ARS13.3trn of reverse repos into a new note. Marcos Buscaglia examines the evolution of short-term ARS Treasury debt in the next 12 months. In the base case scenario, the evolution of short-term debt does not balloon. Even if the BCRA has to sterilise the equivalent of $300m per month, the debt is still not unstable. For instability to occur there needs to be either a new issuance in high quantities, a much higher increase in real interest rates, or a cessation of the upcoming devaluation.
Edition: 190
- 12 July, 2024
Gold: Can higher prices translate into cash?
All too often in the last decade for the gold sector, fully loaded costs have come close to equalling the received price. Therefore, one reason gold equities have likely recently lagged spot prices reflects a degree of market scepticism of the sector's ability to translate higher prices into “cash”. Unfortunately, the senior producers have often been key protagonists, but this isn’t the case for all gold stocks. Herein, David Radclyffe updates the sector cost analysis including highlighting Free Cash Flow (FCF) costs and FCF costs plus dividends, seeking to identify those stocks that could bank the proceeds of higher spot prices in 2024. The notional spot margin after base case dividends in 2024E for Agnico Eagle Mines / Barrick Gold Corp / Newmont is ~US$395/GEO, up from US$200/GEO in 2023. However, the best cash notional margins in 2024E could be delivered by Evolution Mining, Lundin Gold, Centerra Gold, and Barrick Gold Corp.
Edition: 186
- 17 May, 2024
ADMIE (ADMIE GA) Greece
Utilities
ResearchGreece addresses the following dividend-yield-buffer questions: a) How likely is it that the RAE will approve a higher WACC for IPTO? b) If so, what about RAB evolution? c) What is the impact on the fair value of ADMIE? d) What should investors do with the stock? A +100bps higher WACC means IPTO is worth €1.97-2.46bn based on peer multiples applied on 2024-2025 EBITDA. Therefore, ADMIE's 51% stake is worth €920m-1.06bn in NPV 2023 terms against a M/Cap of €555m. ResearchGreece estimates ADMIE's dividend yield at 5.3%-6.6% in 2023-2025 and upgrades their stock rating to OI (OWN IT) with a TP of €4.0 (70% upside).
Edition: 166
- 04 August, 2023
Foreign ownership cycle of Australian gold production
David Radclyffe’s latest gold sector report examines the M&A cycle in Australia, with the country having witnessed a full cycle of foreign acquisitions. The trend started with the significant loss of Australian mines, peaking in 2003 at 60% foreign ownership. Over the years the trend reversed, but now the cycle has moved back to Australian gold companies and assets being attractively priced to international peers. With the proposed acquisition of Newcrest by Newmont, we could see foreign ownership levels lift back to ~40%. Northern Star and Evolution appear well poised to attract domestic investors looking to move on from Newcrest and to take advantage of the next phase of industry rationalisation in Australia.
Edition: 162
- 09 June, 2023
Gold sector: 2023 looking positive (so far)
Gold prices will always be volatile but two of the unexpected headwinds of 2022, inflation and USD strength, have now peaked. David Radclyffe reviews the outlook for the sector in 2023. He expects gold equity inflows as price and margin pressures of 2022 abate and the potential for surpluses return. M&A is expected to continue, and significant C-suite turnover offers opportunities to reset stale strategies. Preferred stocks are Barrick, Endeavour and B2Gold for scale/value, Northern Star and Evolution for leverage to better gold/copper prices and Lundin Gold and Centerra for attractive potential in smaller caps.
Edition: 152
- 20 January, 2023
An opportunity for gold stocks to acquire non-gold assets?
Gold companies have been actively acquiring base metal assets in the last year, and David Radclyffe wonders if this makes sense in the current market. In his latest report he finds that base metal assets can lower gold company group costs and boost cash flow, and over the last year base metal stocks have outperformed gold stocks when adjusted for the performance of the underlying metal. His preferred gold stocks with diversification of commodity mix are Barrick with 16% copper, Evolution with 20% copper exposure and Agnico which may still be 99% gold but has a growing potential for more base metal exposure.
Edition: 147
- 28 October, 2022
Materials
Offers an attractive combination of high production growth, low costs, assets in safe jurisdictions and a management team with an impressive track record - all points of differentiation to intermediate peers. GMR discusses how consolidation in 2021 has created district plays in the portfolio and EVN has a clear pathway to 1Moz/yr (or ~1.5Moz/yr GEO) in FY24/FY25. Critically, Cowal and Red Lake have the potential to demonstrate they are “true Tier 2” assets. While M&A is part of the gold miner's DNA, GMR believes options are limited right now, although management may consider a Mt Rawdon replacement or merger further down the line.
Edition: 134
- 29 April, 2022
Aussie gold: Recalibrating portfolios, increasing spending
Headwinds from labour shortages and inflation have made 2021 performance lacklustre, but factors that usually favour gold, such as inflation and geopolitical risk, are clearly on the rise. Growth capital expenditure is set to more than double the rates of a few years ago at ~US$375/oz in FY22 in order to satisfy investors. David Radclyffe’s preferred exposure to Aussie gold is through Northern Star Resources and Evolution Mining (recently upgraded to BUY), whilst St Barbara falls in last place as difficult choices lay ahead.
Edition: 128
- 04 February, 2022
Consumer Staples
Gordon Haskett Research Advisors
Once again, the team from Philly steps up and delivers a knock-out punch to the bear thesis - FIVE's 3Q print / 4Q guide should pave the way for the stock to regain its recent momentum. As the group's brand awareness continues to augment, so too should the number of transactions and therefore sales. Moreover, when you layer in: a) $5 Beyond (only in 30% of the chain today); b) flexible pricing throughout the model; c) the continued evolution of ACO (Self-Checkout); and d) eventually a loyalty / personalisation mechanism…this AUV improvement should only continue to gain momentum.
Edition: 125
- 10 December, 2021
Aussie golds spending their dollars
Australian gold companies are heavily reinvesting their cash surpluses. This increased investment indicates companies are becoming more confident in higher prices for the long-term, backed by unleveraged balance sheets. BUY rated Evolution Mining (target $4.80) is expected to reinvest ~US$400/oz in major/growth capital over FY22-FY24E. Northern Star Resources is looking at reinvesting ~US$195/oz but remains the preferred BUY rated Aussie gold with a target price of $14.00.
Edition: 116
- 06 August, 2021
Bilibili (BILI US) US
Technology
‘Too Niche or not to Niche’ - BILI’s evolution from niche purveyor of ACG (Anime, Comics and Gaming) content to entertainment giant continues apace and with management’s target of 400m MAUs by 2023, the bar is high. The problem is that while trying to appeal to a wider audience BILI risks losing the very thing that made it special - a dedicated community of ACG lovers. This begs the question: would BILI be better off doubling down on its existing strengths instead?
Edition: 109
- 30 April, 2021