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 ?

------------------
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.