Fund manager likes this pharma stock developing a weight loss drug

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Fund manager likes this pharma stock developing a weight loss *****

Portfolio manager Sean Peche is ******** on one global biotech stock — and it’s not Danish ***** manufacturer Novo Nordisk . Instead, Peche, who is also the founder of the U.K.-based Ranmore Fund Management, likes the Hong Kong-listed ******* Laboratories , which produces drugs ranging from insulin to animal medication. The company is also in the process of producing a weight management *****, an area that has seen immense competition following the hype around glucagon-like peptide-1 (GLP-1) drugs. “The last time I checked there were 170 competing weight loss products in development … there’s not a company out there that’s not trying to get a bit of that action. So, we like to go find better value in the road less travelled,” Peche said. Aside from Novo Nordisk, pharmaceutical giants like Eli Lilly , Amgen , Pfizer and AstraZeneca are also in the weight-loss drugs space. “Maybe that weight loss product (by ******* Laboratories) works, maybe it doesn’t. But, I’m paying for it,” Peche added. The portfolio manager oversees the $329 million Ranmore Global Equity Fund , which seeks to identify mispriced stocks — or those selling for less than their underlying value. He described ******* Laboratories as a “really well managed company … that also exports to Europe.” ******* Laboratories’ price-to-earnings of 5.8 times is a fraction of the 34.3 times that Novo Nordisk is trading at, Peche added. In addition to the Hong Kong bourse, shares in ******* Laboratories also trade in the U.S. as an ********* Depositary Receipt under the ULIHF ticker. Year-to-date, its shares are up around 47.5%. 3933-HK YTD mountain Year-to-date shares in ******* Laboratories Analysts Carol Dou and Sunny Chen at UOB Kay Hian share Peche’s confidence in ******* Laboratories, reiterating their buy rating on the stock with a 12-month price target of 11.20 Hong Kong dollars ($1.44) — up from 10 Hong Kong dollars previously. “We expect increasing demand to continue supporting the company’s steady revenue growth in 2024. [******* Laboratories] is making smooth progress in R & D and targets to launch Liraglutide in 2024. Its rich pipeline and continued cost control efforts bode well for stronger earnings growth in 2024-26,” they wrote in a research note last month. Liraglutide is used to treat Type 2 diabetes and chronic obesity. “We believe the extensive pipeline will yield increasing R & D and commercial benefits for the company in the next few years,” the analysts added. Their comments follow ******* Laboratories’ “faster than expected earnings” growth in the first half of the year. Its net profit was up 16.1% year on year to 1.5 billion ******** yuan ( $213.1 million), while revenue grew 3.9% from the year before to 7.2 billion yuan. According to FactSet data, of nine analysts covering the stock, seven give it a buy rating, while the remaining two have hold ratings. Analysts’ average price target on ******* Laboratories is 12.95 Hong Kong dollars, giving it 28.2% potential upside.

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