S&P/ASX 200 Index (ASX: XJO) healthcare shares have been a major benefactor of the COVID-19 pandemic. While the containment of COVID-19 cases continues to be a challenge around the globe, here are two ASX 200 healthcare shares to watch closely in August.
2 ASX 200 healthcare shares I'm watching closely
1. Nanosonics Ltd (ASX: NAN)
There could be some nerves around Nanosonics' FY20 full year results that are due later this month. The last market sensitive announcement from the company was its business update back in early April. This business update highlighted that unaudited sales for Q3 FY20 were significantly up on the prior corresponding period (pcp) and sales of consumables were in line with the company's pre-COVID-19 expectations. However, limited direct access to hospitals may extend the time needed for hospital departments to adopt the company's ultrasound disinfection products. This may result in lower than anticipated overall growth for its installed base in Q4 and therefore FY20.
I believe in today's COVID-19 world, where there is a heightened focus on hygiene, Nanosonics plays an ever important role in the disinfection of ultrasound probes. However, mobility restrictions are likely to impact its ability to further penetrate new markets across Europe, the Middle East and Asia Pacific. Notwithstanding the inherent risks in its FY20 result, Nanosonics is a leading ASX 200 healthcare share to watch closely this earnings season.
2. Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
The Fisher & Paykel share price has soared more than 50% this year following COVID-19 tailwinds for its business. August, however, had appeared to be a challenging month for the company with its shares tumbling 10% from the all-time record highs set in July. This was the case until the business provided an upbeat FY21 trading update on Tuesday that saw the Fisher & Paykel share price jump by 4%.
This trading update highlighted strong demand for the company's hospital respiratory care products. Managing Director and CEO, Lewis Gradon, said that "Hospital hardware sales have continued to steadily increase over the first four months of FY21 with +390% constant currency revenue growth to the end of July compared to pcp". He also noted that "Global sales of both invasive ventilation and Optiflow consumables in July have returned to similar levels to the peak we saw in April". The company is seeing that revenue by geography tends to follow the incidence of COVID-19 cases.
Fisher & Paykel estimates that FY21 operating revenue will be approximately $1.61 billion and net profit after tax will be approximately $365 million to $385 million (or an increase of 27-34% on FY20). I believe the company is delivering phenomenal growth figures for a large cap ASX 200 healthcare share. While its share price has pushed to extraordinary highs, I would be watching closely for a pullback buying opportunity.
