Hyphens Pharma International Limited

[lkw175]

Net profit for 1Q24 is 97% higher than 1Q23.
But the sales for its own brand products had decreased.

https://links.sgx.com/FileOpen/Quarterly...eID=803338

[dreamybear]

Net profit for 1Q24 is 97% higher than 1Q23.
But the sales for its own brand products had decreased.

https://links.sgx.com/FileOpen/Quarterly...eID=803338

I think the 1Q23 "sales volume" has reached an inflection point since revenue was up 44% whereas PBT up a whopping 118%. Wld be good if NPM can be at high single digit levels.

Remains to be seen whether revenue can continue to grow for the rest of the year and beyond, and how the digital platforms' additional funding will pan out.

[dreamybear]

Interesting developments in the span of 2 years - wonder what wld happen to his stake in DocMed ?

And what are the future plans for DocMed ?

Nevertheless, this reminds me of the previous case where the CFO resigned and I think it took quite a while for the company to find a replacement. On the other hand, I think there are cases where companies announce cessations and new appointments of key personnel within a short span, which better assures investors.

Are there insights we can gather from these ?

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RESIGNATION OF MR. TIMOTHY CHEN, CEO OF DOCMED TECHNOLOGY AND PANMALAYAN PHARMACEUTICALS
https://links.sgx.com/FileOpen/Resignati...eID=805990

https://links.sgx.com/FileOpen/Hyphens%2...eID=718825
"To demonstrate his commitment to DocMed, Mr Chen Funn Yii, Timothy (“Mr Timothy Chen”), the Chief Executive Officer of DocMed and PMP, will be subscribing to 8,488 ordinary shares in the capital of DocMed (“DocMed Ordinary Shares”) for a consideration of S$100,000 pursuant to the terms of his employment contract with DocMed, subject to, inter alia, the completion of the Subscription (“TC Subscription”)..."

Resignation of CFO
https://links.sgx.com/1.0.0/corporate-an...a3a5261cb9

Appt of CFO
https://links.sgx.com/1.0.0/corporate-an...3da87a2b38

[weijian]

hi dreamybear,

In addition to his own money, approval was also given in an EGM 1 year ago to grant Mr Timothy Chen up to 18% of DocMed through options. So we could probably reasonably conclude that he is "well motivated" to do well or stay on. Just like the previous ED who left (and then found a new job elsewhere), probably more will be clear in time to come?

EXTRAORDINARY GENERAL MEETING
https://links.sgx.com/FileOpen/Hyphens%2...eID=753298

Of course, it would be apt to ask ChatGPT about the typical tenure of a startup CEO:

The tenure of a startup CEO can vary significantly based on numerous factors such as the company's industry, growth stage, performance, and investor expectations. However, there are some general trends and averages that can provide a rough idea.

Early-Stage Startups: For early-stage startups, the average tenure of a CEO tends to be shorter. Many early-stage startup CEOs might stay for around 3-4 years. This period often covers the initial phases of product development, market fit, and early scaling.

Venture-Backed Startups: In venture-backed startups, the tenure might be influenced by the performance and growth expectations set by investors. Here, the average tenure can be about 3-5 years. If the startup grows rapidly and successfully, the CEO might stay longer, but if the startup struggles, investors might push for a change in leadership sooner.

Successful Startups: For startups that reach significant milestones such as large funding rounds, successful scaling, or an IPO, the CEO might stay longer, often in the range of 5-7 years or more. Some successful startup CEOs continue to lead the company well into its maturity, while others might transition out once the company reaches a stable phase.

Exit Events: Startups that experience exit events such as mergers, acquisitions, or IPOs often see a change in leadership. The original startup CEO might step down or transition to a different role post-exit, leading to an average tenure that aligns with the timing of these events, typically within 5-7 years.

In summary, while there is no definitive tenure for a startup CEO, averages tend to cluster around 3-5 years, with variations depending on specific circumstances and company performance.

[dreamybear]

Thanks for sharing your thoughts.

But how to evaluate the growth and performance expectations without being shown a roadmap or milestones to measure against ?

In the working world, there wld normally be a notice period or some may informally sound out their bosses before leaving or there would be some backup personnel for key positions. As such, what could be possible reasons why the replacement wasn't announced together with the departure ?

Going back to the capital investment by Metro, till now I struggle to think how Metro would be a good synergistic fit. Was the initial capital injection driven more by operational needs than strategic ? Is it not feasible to spend more time / effort searching for a partner with a better fit, e.g. those in the healthcare / online platform space ? Is one of the challenges the lack of suitable contacts/connections ?

There is only 1 ED with 1 other NED and 4 IDs. Are such arrangements optimal ?
https://www.hyphensgroup.com/about-us/bo...directors/

[weijian]

hi dreamybear,

Unfortunately, buying an OPMI ticket probably doesn't get one a sneak preview of DocMed business plans/milestones. Or another way to say it, if they were publicly and readily available, it will be more of a red flag than anything else. Plans worth their weight are meant to be executed and not publicized.

Series A funding are the 1st round of institutional funding, so they are pretty risky. As such, I really think Hyphens has done a good job to raise 10mil of external funding. There could be many reasons why they are choosing money over capability in a "Series A funding". Maybe Hyphens think they can hire capability with the money? Maybe Hyphens is wary of giving away too much to (potential) strategic partners? I sincerely believe these entrepreneurs who had collaborated with EDB, are not lacking in industrial contacts/connections.

As for the composition of the BOD, i am not a CG expert. But I think there is probably no optimal or ideal BOD composition. But Charlie Munger likes to invert the problem and so maybe the way to look at it - Rather than asking "Are such arrangements optimal?", the inverted question becomes "What arrangements are not optimal?". Much easier to answer the inverted question isn't it? And see if the current Hyphens BOD ticks any of the later question.

[dreamybear]

hi dreamybear,

Unfortunately, buying an OPMI ticket probably doesn't get one a sneak preview of DocMed business plans/milestones. Or another way to say it, if they were publicly and readily available, it will be more of a red flag than anything else. Plans worth their weight are meant to be executed and not publicized.

Series A funding are the 1st round of institutional funding, so they are pretty risky. As such, I really think Hyphens has done a good job to raise 10mil of external funding. There could be many reasons why they are choosing money over capability in a "Series A funding". Maybe Hyphens think they can hire capability with the money? Maybe Hyphens is wary of giving away too much to (potential) strategic partners? I sincerely believe these entrepreneurs who had collaborated with EDB, are not lacking in industrial contacts/connections.

As for the composition of the BOD, i am not a CG expert. But I think there is probably no optimal or ideal BOD composition. But Charlie Munger likes to invert the problem and so maybe the way to look at it - Rather than asking "Are such arrangements optimal?", the inverted question becomes "What arrangements are not optimal?". Much easier to answer the inverted question isn't it? And see if the current Hyphens BOD ticks any of the later question.

The Medical hypermart and digital made a loss in 1H2024, reversing from a profit in 1H2023.
https://links.sgx.com/FileOpen/Hyphens%2...eID=815740

I think based on Hyphens' current size and scale, it may not have much bargaining power or resources to be able to 
- rapidly scale up its digital regional platform
- attract high profile funding partners

Not to mention there seems to be formidable competitors operating in the online space - I wonder what could DocMed offer that others cannot, is it going to be like the clash of the shopping platforms(battle of deep pockets), e.g. Shopee vs Lazada vs Qoo10 ?
https://www.zuelligpharma.com/news-insig...m-ezrxplus

Locally, Alliance Healthcare & Medinex also have pharmaceutical services. 
https://www.alliancepharm.com.sg/
https://links.sgx.com/FileOpen/MediNex%2...eID=812693
"The Company is adopting a 3-pronged approach to grow this business. The first approach is to increase our efforts in signing up new clinics to purchase drugs from us. Currently, only about 150 clinics purchase products from us out of the 1,500 clinics in Singapore. As such, there is some scope to increase our client base. Secondly, we need to pivot from solely wholesale trading of pharmaceutical products to providing consultancy services to foreign pharmaceutical companies thinking of registering their products in Singapore. Thirdly, we will also look into providing delivery services to other pharmaceutical companies to increase utilisation of our delivery assets"

This segment looks challenging for Hyphens.

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Well, Hyphens has won Gold for the 2024 "BEST MANAGED BOARD AWARD". I suppose it is encouraging for shareholders for a start(especially in the context of a familiar name - one of VB's favorite OPMI friendly Micro-Mechanics is also in the same category) but of course, who are the winners in the years ahead remains to be seen.
https://www.businesstimes.com.sg/events-...ds/winners

[weijian]

Well, Hyphens has won Gold for the 2024 "BEST MANAGED BOARD AWARD". I suppose it is encouraging for shareholders for a start(especially in the context of a familiar name - one of VB's favorite OPMI friendly Micro-Mechanics is also in the same category) but of course, who are the winners in the years ahead remains to be seen.
https://www.businesstimes.com.sg/events-...ds/winners

Well, if you buy out your buddy on the board and then declare a special dividend after he left OR gotten your son onto the BOD your long time employees left, I reckon that is a really WELL MANAGED board?

Jokes side. I wonder what is the median TSR of these 36 companies in the last 3 years? The winners seemed overwhelming "GLC-linked". Maybe only these guys bothered to apply?

That said, I think Kong Chee Min of Centurion fully deserves the "Best CEO" award! After all, he is the 13year-old survivor of the post RTO of Centurion Corp (previously known as SM Summit), and successfully pivoted from hard-disc guy to dorm guy.

36 companies, 6 individuals clinch accolades at Singapore Corporate Awards 2024

https://www.straitstimes.com/business/36...wards-2024

[dreamybear]

Well, with its current size(mkt cap), I think it can be considered a small fish in the industry and thus, it could be hard for it to compete in the industry. Perhaps awards can help open its door to more business partnerships ?

https://www.shareinvestor.com/fundamenta...ter=1J5.SI