Sigma Healthcare (SIG) H2 2025 Earnings Call August 26, 2025 08:00 PM ET Company ParticipantsVikesh Ramsunder - CEO, MD & DirectorMark Davis - CFOTom Kierath - Founding Principal & Head - Consumer ResearchBen Gilbert - Head - Australian ResearchDavid Stanton - Head of Healthcare Equity Research, AustraliaConference Call ParticipantsTom Godfrey - Senior Analyst - HealthcareAjay Mariswamy - Senior Equity Research Associate AnalystNoah Hunt - Equity Research AnalystVikesh RamsunderGood morning. I am Vikesh Ram ...

Core Viewpoint - MicroPort Medical's major shareholder, Otsuka Medical Devices, is selling 15.71% of its 20.70% stake, leading to a significant change in the company's ownership structure and governance [1][2]. Group 1: Shareholder Changes - Otsuka Medical Devices will reduce its stake to below 5%, exiting as the largest shareholder, while We'Tron Capital Limited will become the new largest shareholder with over 26% ownership [1]. - The transaction introduces state-owned investors, which may enhance the company's core business expansion and governance [2]. Group 2: Business Developments - MicroPort Medical is proposing a merger of its CRM business with the publicly listed company, HeartLink Medical, to create a comprehensive cardiac product platform and improve international marketing channels [2]. - The IPO for the CRM business is expected to raise at least $150 million, with a market valuation of no less than $1.5 billion [2]. Group 3: Financial Performance - For the first half of 2025, MicroPort Medical reported a revenue decline of no more than 4% (excluding currency effects) and a loss of $107 million, which is within the promised limit of $110 million [3]. - The company aims to achieve a profit of $52 million in the second half of 2025 to meet its convertible bond financing agreement requirements [3]. - Revenue projections for 2025-2027 are estimated at $1.193 billion, $1.393 billion, and $1.595 billion, with net profits of -$48 million, $83 million, and $159 million respectively [3].

Investment Rating - The report assigns a "Buy" rating to the company, indicating an expected stock price increase of over 15% within the next six months [5]. Core Views - The report highlights the strategic restructuring of major shareholders, with the exit of the previous largest shareholder, Otsuka Medical, and the entry of state-owned investors, which is expected to enhance business expansion and governance [1]. - The proposed merger of the CRM business with another listed company aims to create a comprehensive cardiac product platform, enhancing international marketing channels and synergy [2]. - The company is on track to meet its profit commitments for the first half of 2025, with expectations for continued improvement in profitability in the second half [2]. Financial Summary - Revenue projections for 2025-2027 are estimated at $1.193 billion, $1.393 billion, and $1.595 billion, respectively, with a net profit forecast of -$47.5 million, $82.62 million, and $158.87 million [3][10]. - The company is expected to achieve a significant turnaround in profitability, with a projected net profit margin of 5.9% by 2026 and 10.0% by 2027 [10]. - The report outlines a gradual improvement in earnings per share (EPS), moving from -0.12 in 2024 to 0.09 in 2027 [10]. Market Data - As of July 28, 2025, the closing price of the stock was HKD 11.58, with a market capitalization of approximately HKD 21.43 billion [5]. - The stock has shown strong performance with absolute returns of 34% over one month, 72% over three months, and 120% over twelve months [7].

Core Viewpoint - The merger between Hino Motors and Mitsubishi Fuso aims to enhance competitiveness in R&D, procurement, and production within the commercial vehicle sector [1][5]. Group 1: Merger Details - Hino and Mitsubishi Fuso will establish a holding company headquartered in Tokyo, with both companies becoming wholly-owned subsidiaries of the new entity [3]. - Daimler Trucks and Toyota will each hold a 25% stake in the new company, which will employ over 40,000 people, with Karl Deppen from Mitsubishi Fuso serving as CEO [3]. Group 2: Factory Transfer - Hino announced the transfer of its vehicle and parts factory located in Hamura, Tokyo, to Toyota, which has been operational since 1963, primarily producing small trucks for both Hino and Toyota brands [4]. Group 3: Previous Agreements - The four companies had reached a preliminary agreement in May 2023 to merge their commercial vehicle operations by the end of 2024, but the final agreement was delayed indefinitely due to Hino's engine certification fraud issue [5].