RE:Question for Chianchin (comments from others also welcome)Hi JamesFC,
I am a fairly new shareholder to Knight (my holding period is now a few months).
I am not an expert in the pharmaceutical industry; however, I was attracted to Knight based on the valuation and the fact that the Company had finally made a significant and transformational acquisition that would allow them to put the cash to work.
My view of Knight and its prospects were based on a sum of the parts valuation as well as what I beleived to be future upside in Latam through a better ownership group. I had reviewed the Grupo Biotoscana information including the valuation and concluded that there was a lot of upside in both the market and the company. Frankly, I am of the opinion that Grupo Biotoscana was not organized and managed correctly; which, is what Knight is addressing now.
As it relates to the valuation, my view is that ine the next 2 years the market will be able to price Knight on a DCF basis rather than continuing with a Price to Book value approach (currently 0.8x compared to the historical average of 1.2x). Depending on what the earnings and cash flow look like my expectation is that Knight would return to trading above $10 per share.
I hope that Covid was a temporary roadblock and there are further deals to be done in Latam (Mexico?).
Best of luck,
LR