In light of the World Health Organization’s warning regarding the coronavirus outbreak, five Asian health care companies with the strength and profitability to weather the Covid-19 surge include Renhe Pharmacy Co. Ltd. (SZSE:000650, Financial), Essex Bio-Technology Ltd. (HKSE:01061, Financial), InBody Co. Ltd. (XKRX:041830, Financial), Vieworks Co. Ltd. (XKRX:100120, Financial) and Hubei Jumpcan Pharmaceutical Co. Ltd. (SHSE:600566) according to the All-in-One Screener, a Premium GuruFocus feature.
WHO warns of virus surge as global cases exceed 9 million
On Friday, WHO Director-General Tedros Adhanom Ghebreyesus said during a press conference that last Thursday’s increase of 150,000 new cases represented the highest single day increase of Covid-19 cases, with surges in the Americas, Southern Asia and the Middle East. Tedros warned that the virus is “still spreading fast” and remains “deadly”: Johns Hopkins University data shows that global cases topped 9 million on Monday, with 2.28 million cases in the U.S. Additionally, global casualties exceeded over 469,000.
Mike Ryan, executive director of the WHO’s emergencies program, added on Monday that the uptick in coronavirus cases is not just due to the rise in testing: Hospitalizations and casualties are also rising, suggesting that the virus is “well established on a global level.”
Health care sector contains investing opportunities from high-quality companies
As coronavirus cases continue rising around the globe, introducing the potential for volatile market swings, investors might seek opportunities in high-quality health care companies. The health care sector contains companies engaging in biotech, pharmaceuticals, medical research and diagnostics, hospitals and medical equipment.
The High-Quality Screen seeks companies with high financial strength, profitability, business predictability and returns on equity and capital. The Screen also considers valuation, focusing on the undervalued companies.
Renhe Pharmacy
Renhe Pharmacy produces and sells Chinese medicine, Western medicine, bulk drugs and health-related products. GuruFocus ranks the Nanchang, Jiangxi-based company’s profitability and valuation 9 out of 10 on several positive investing signs, which include a return on assets that outperforms 84.08% of global competitors and price valuations that are near 10-year lows.
GuruFocus ranks Renhe’s financial strength 8 out of 10 on the heels of no long-term debt and a strong Altman Z-score of 9.26.
Essex Bio-Technology
Essex Bio-Technology develops and markets biopharmaceutical products for the treatment of surface and eye wounds. GuruFocus ranks the Zhuhai, Guangdong-based company’s profitability 9 out of 10, driven by expanding operating margins and a 4.5-star business predictability rank despite a weak Piotroski F-score of 3.
Essex’s valuation ranks 8 out of 10 on the back of price-earnings and price-sales ratios outperforming over 87% of global competitors.
InBody
InBody manufactures and distributes body composition analyzers. GuruFocus ranks the South Korean medical instruments company’s financial strength, profitability and valuation 10 out of 10 on several positive investing signs, which include robust interest coverage, expanding operating margins, consistent revenue growth, a high Piotroski F-score of 7 and price valuations that are near 10-year lows and outperform over 90% of global competitors.
Vieworks
Vieworks designs and develops camera and digital imaging systems for radiography, fluoroscopy and angiography devices. GuruFocus ranks the South Korean medical equipment company’s financial strength 10 out of 10 on the back of interest coverage and debt ratios outperforming over 90% of global competitors and a strong Altman Z-score of 11.73. Other positive investing signs, which contribute to a profitability rank of 9, include a 4.5-star business predictability rank and profit margins outperforming over 86% of global competitors.
Hubei Jumpcan Pharmaceutical
Hubei Jumpcan Pharmaceutical researches and develops Chinese traditional medicines. GuruFocus ranks the company’s profitability 10 out of 10 on several positive investing signs, which include a five-star business predictability rank, a return on equity that outperforms 95.05% of global competitors and an operating margin that has increased approximately 7.60% per year on average over the past five years.
Disclosure: No positions.
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