Equities

Rendezvous with the Mirova Sustainable Equity Team

August 08, 2025 - 4 min

Today’s world is changing, led by long term transitions: demographic, technological, environmental and related to corporate governance. They will take place regardless of cyclicality within the global economy: sea levels will continue to rise, natural sources of fresh water will continue to become scarcer, people will continue to live longer, and innovations in technology will continue to change the way the world interacts and conducts business.

Watch regular updates from the Mirova Sustainable Equity Team on global markets and the economy and the long-term global secular trends shaping our world.

Hello everyone.

Welcome to another episode of Rendez-vous with the Sustainable Equity team.

I'm Hua Cheng, a portfolio manager on the team. As earnings season begins, we're starting to see results come in. One sector that we have been analyzing very closely is healthcare. Despite its recent underperformance, as long-term investors, we continue to see strong opportunities driven by significant demographic and lifestyle shifts. We expect structurally higher healthcare spending in the long term. Just this week, we heard quarterly results from two large life science companies, and we would like to share a quick update on the result and also discuss the current environment. Life science business has several headwinds. One of them is the weaker demand of bioprocessing business after COVID. Second one is a challenging situation in China, partly because of the local funding, partly because of tariff. Third one is uncertainties with the US, such as the President Trump's executive order on most favored nations pricings, tariffs, etc.

While all these factors are beyond our control, as portfolio manager, we focus on how individual companies navigate all these challenges.

Back to the quarter results. This week, we believe that the overall outcome are positive. We continue to see the gradual improvement from the bioprocessing business. Demand situation in China is challenging but better than initially expected. The uncertainty on tariffs remains, but here again, its influence on individual concrete result is also less significant than initially expected. And more importantly, we believe that these companies navigate all these unusual challenges very well. We believe their fundamentals remain very strong. The long term opportunities within the healthcare sector remain in place. We continue to favor these high-quality life science companies, not only because of their broad exposure to healthcare spending, but also because of their execution skills.

Thank you for tuning in to this episode. Keep an eye out for more update from the team as earning season continues.

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