European MedTech: Dragons at the gate: new VBP proposals raise further China risk

研报英文原文证据摘录

European MedTech: Dragons at the gate: new VBP proposals raise further China risk

5%. Key upside risks to our assumptions include the following: 1)

Flyrcado launch accelerates beyond our and sellside estimates. 2) PCCT launch drives rapid

uptake and share gains, lifting Imaging margins in the process. 3) Chinese competitors do not

gain ground through their internationalization. 4) GEHC new product launches drive share

gains in core imaging and ultrasound businesses. 5) Alzheimer's developments drive an

acceleration in demand for Pharmaceutical Diagnostics and also for equipment used to

diagnose and monitor the disease. 6) Management continues to deliver cost savings beyond

the initial IPO-related reduction in transaction services agreements. Downside risks to GE

Healthcare include: 1) Hospital capex: there is a risk that hospital budgets could be lowered

due to macro concerns, and lead to a decline in the purchasing of capital equipment. 2)

Execution risk from spin-off: an IPO or spin-off can pose a meaningful distraction to a business

and especially to management, at least in the short term. 3) Regulation: healthcare reforms

across major geographies could negatively impact the company's financials.

Philips: Philips' earnings are cyclical by nature. Our estimates and price target are thus

sensitive to changes in expectations for global and regional growth. Other key risks include: 1)

Whether management can transition Philips towards growth yet maintain control over asset

growth to maximise shareholder returns. 2) Change in regulations affecting healthcare

spending. 3) Material fluctuation in retailer inventories. 4) Volatility with raw material costs

and foreign exchange rates. 5) New product launches gaining/not gaining traction in the

market.