Trinity Delta Lighthouse: Hutchinson China MediTech (Chi-Med)
Trinity Delta view: The equity raise at a 10% premium is a valuable validation of Chi-Med’s progress. The clinical pipeline continues to deliver, with the next wave of product candidates preparing to enter the clinic. Commercial traction in China is beginning to translate into meaningful revenues, with further product launches and regulatory filings due in the near-term. The infrastructure is being established to support the global development pipeline. Looking over the next few years, we see a number of value inflection points arising, and Chi-Med is well-funded to maintain its investment. Updating our current valuation of $4.56bn ($32.99/ADS) or £3.51bn (508p/share) for the new funds raised, and factoring in dilution, translates into a new Chi-Med valuation of $4.69bn ($33.00/ADS) or £3.61bn (508p/share). We intend to revisit our model following H120 interims in July.Hutchison China MediTech is engaged in researching, developing, manufacturing and selling pharmaceuticals and healthcare products. Co. has research and development facilities and manufacturing plants in Shanghai and Guangzhou in the People's Republic of China and sells its products mainly in the PRC and Hong Kong. Co. operates two operating segments. The Innovation Platform focuses on discovering and developing therapeutics in oncology and autoimmune diseases, and the provision of research and development services. The Commercial Platform involves the manufacture, marketing and distribution of prescription and over the counter pharmaceuticals as well as consumer health products.
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