Yes. the market is certainly not impressed with the downgrade info @Mujo and I agree with @Solvetheriddle that is will be a slow and somewhat torturous path back to decent returns for $CSL I'm happy to cut them some slack for now as long as they stick to a nominated strategy (for a change), although I also agree delaying Seqirus seems odd, as jettisoning it while the SP is being smashed already on downgrade advice may have made more sense. i.e. take the big hit and get on with it.

Disc held IRL & SM

My initial reaction was that the market reaction was over the top. The golden goose which is the blood plasma business (70% of profits) is plugging along fine, seems to have a bright future, and arguably worth the current market cap alone. Seqiris feels like a sideshow. I’m feeling this is exactly the type of buying situation we need to be looking for.

I couldn't agree more @PhilO and putting my SM dollars where my mouth is !!

Also agree @PhilO and just bought some more CSL to complete my position at $180, having bought for the first time ever at $205 in September. Ok time to ignore it for the next 5 years... GN go do your thing!

Broadly agree with the favourable sentiment here, but they also say downgrades come in threes, so I wouldn't be throwing the kitchen sink at it just yet.

I attended the CSL AGM yesterday. As always, a good chance to see the whites of leadership eyes, especially during tough times. A few key takeaways -

# Chair McNamee is no doubt passionate and committed but I came away thinking he's not the right Chair for the current state they find themselves in. He kicked off by showing old photos of himself listing the company back in the 90's. He's been through a lot there but the reality is it has almost all been a fairly straight line upwards until more recently. The last 6 or 7 years have been sideways and a little up in the past 2 years and he doesn't seem as well equipped for this challenge.

# He handled some tough stories from victims of contaminated blood back in the 90's very poorly. They contracted Hep C, AIDS etc from blood that wasn't treated properly and are in poor health now, with many others dying apparently. Very sad stuff. Long time ago of course but his responses were really robotic and lacked any real empathy, or even half hearted attempts to engage.

# He also begrudgingly accepted they have not done a good job of countering the current narrative that the company is haemorrhaging (pardon the pun!). In truth, the business has actually improved over the past 2 years. The new strategy for R&D seems better and likely de risks the business at this time. Even yesterday's downgrade of guidance, still sees revenue up a little and profit up mid single for the next couple of years, despite the probably short term shenanigans with vaccination rates in the US. Yet the market commentary is almost like the business is going broke and CSL has not done a good job in countering this properly...

# There was a second strike on rem. The rem plan is actually pretty good in my opinion for such a big business and this is most likely lots of disgruntled folks who say share price down, vote against rem. Hence only 2% of folks voted for a Board spill after the second strike.

# More pleasingly, the two new Directors seemed very good and the right people for this point in time. Deep medical expertise and investment expertise.

# And CEO McKenzie came across much better than his Chair. Confident, knowledgable, humble enough for this kind of role and answered questions appropriately and with some empathy. Yes, he was on his best behaviour no doubt, however it was all you would hope for given the times and tone of this meeting.

In summary I remain a medium conviction holder on a 5 year view and would actually add to my position, if one of the other strong Board members was to replace McNamee as Chair in the next 6 months, all else being equal. (I wouldn't mind betting some big money might be suggesting that to him after these past few market updates he has led).

@Karmast great to get your in-person report. I participated (and voted) online. I pretty much agree with your assessment of the characters.

When I took my initial stake in $CSL (shortly after our SM Brisbane gathering), I said I'd put 50% down and wait with the next 50% until they do another R&D day.

Obviously, I had no idea we'd see another leg down, and I think the business is now valued at a discount to what you'd expect it might achieve for a right-sized Behring on its own. And while they overpaid for Vifor, even on a pessimistic view, it has to be worth more than A$12-15bn. And Sequirus - surely the anti-vax madness in the US will pass one day - so I'm also giving that $12-15bn.

I'd still like to see an R&D update, and I don't think I have to be in a hurry with my next 50%, because the weight of flows is still in the exit direction. And we know that particularly in biotech, companies can sustain very large SP discounts to consensus analyst views for very, very long periods of time.

So maybe this is a case of waiting until the underlying performance of the business (both R&D leading indicators and proft) start to move in the rigth direction.

But I am happy to hold, and interested to hold quite a lot more in time. Can I fight off the temptation for another nibble?

@Karmast I’m watching the AGM as I write, which is on their website fortunately. Listening to the opening address I agree the speaker could have gone on the offence a bit more and talked about it their strong position and long term history and the continued runway ahead. It’s not their job to apologise for a low share price. It’s like the long term shareholders he’s speaking to have never felt a proper correction before and forgot share prices can fall sharply. Understandable when you look at CSLs history I suppose.

On a related topic. I reluctantly purchased a Tikr subscription recently after previously thinkjng it was a bit of a cop out to looking at the actual reports. One thing it does is make me less myopic. CSLs results for the last few years, which like you implied haven’t been that bad, appear as just a bump in the road when you consider it’s long history. I’m making it a habit to look at all results via this lens now.

Even the analyst community from where I presume to future earning expectations come from agree as far as 5 year revenue and earning predictions, yet they still overweight current earnings when valuing it

my Tikr view is below

@Karmast thanks for that. interesting observations. I've just read and listened to the AGM commentary. I've been critical of CSL over the last few years; they seem to be meandering, living on past glories. what they are doing now is positive in my view, but it is as if the market is really surprised now that management is admitting the issues that have been around for some time. maybe there are a lot of stale bulls, that's what it looks like.

New stuff for me was 1. Vifor; DD did not pick up EOL properly, and they admitted they overpaid. so it fits in with this period in CSL where the old CEO was exiting, the new guy coming in, and stuff was let slide. risky to do your largest acquisition in this period, however, so CSL are paying for that now.

secondly, CSL112 was a big bet; it didn't work, but the costs for that are not only the loss of the $1b invested (?), but it drained the R&D pipeline. again, that is now a focus and needs to be built up. so you see the alliances etc, CSL can't rely only on its own steam

. Thirdly, there are 20 Research labs around the world (wow!). again, this looks like where stuff has been let slide. A compromise keeps people happy, result is that productivity falls. Again, they are now addressing that, will take time.

Lastly, i asked a fund manager at a recent presentation to address how they handle companies in trouble, thinking he would address holdings IEL DMP or MIN, but instead we went on about CSL. i feel there were a lot of people hiding in CSL that are now coming out, remember the Vifor raise was the largest ever for Australia (as i recall) therefore the outsized moves. it happens.

getting rid of BM? I'm on the fence on this one. he has a good track record, can identify the issues and has significant knowledge; maybe he is too wedded to the past. I'm in the give him the benefit of the doubt camp at this stage.

Yes good thoughts @mikebrisy and @Solvetheriddle

The upcoming Investor days scheduled for November are another chance for them to outline the vision and strategies better. I hope they’ve got the message from the last couple of public announcements and McNamee gets going again. Fingers crossed.