Caring Pharmacy

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Caring posts RM1.27mil earnings in Q4, 1.5 sen dividend

KUALA LUMPUR: Caring Pharmacy’s earnings in the fourth quarter ended May 31, 2014 came in at RM1.27mil on the back of revenue of RM88.6mil.

The company, which listed on Bursa Malaysia in November last year, earned 0.59 sen per share in the quarter.

It proposed a dividend of 1.5 sen per share.

Full-year earnings came to RM15.12mil from revenue totalling RM338.34mil. Earnings per share was 6.94 sen.

Caring said it expected the next financial year to be challenging in the view of the cautious consumer sentiment and also the increasing costs of business operation.

“Even so, the group will maintain its strategy of opening additional community pharmacies at strategic locations to expand market share and be more aggressive in marketing activities to improve on same outlets’ sales.

“Taking the above factors, the board is cautiously optimistic of the group’s performance for the next financial year,” it said.

Source: The Star

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Caring Pharmacy plans more stores
June 20, 2014

PETALING JAYA: Caring Pharmacy Group Bhd, the third largest pharmacy chain in Malaysia by outlets with a 4% market share, aims to open more stores in suburban areas where competition is less intense, according to analysts.

It was targeting between 12 and 15 new outlets per year over the next two to five years from 99 currently, BIMB Securities Research said in a note to investors yesterday.

The group has already made inroads into Shah Alam, Ampang, Setapak, Segambut and others. Its stronghold remains in the Klang Valley, which makes up 75% of its total store count.

Caring Pharmacy currently had a presence in urban middle class neighbourhoods such as Subang Jaya, Damansara, Mont Kiara and Bangsar, said BIMB.

The brokerage has a “neutral” call on Caring Pharmacy with a target price of RM2.26, based on a multiple of 18 times its forecast 2015 earnings per share of 14 sen.

The stock last closed at RM2.20, up one sen, with 184,100 shares done. It has gained 11.68% for the year.

“As Malaysians become more affluent, many have also became health conscious. Healthcare awareness has increased over the years and we believe Caring Pharmacy will be one of the main beneficiaries,” BIMB said.

The research outfit is projecting that Caring Pharmacy will post net earnings of RM234mil in its 2014 financial year (FY14) and RM27.3mil in FY15, led by its extended store network and organic growth in sales of pharmaceutical products.

Caring Pharmacy, according to BIMB, aims to be the only community pharmacy chain providing full-time registered pharmacists at all outlets.

Its closest rivals, Guardian and Watson, only had pharmacists in selected outlets, the brokerage said.

In its latest quarter, Caring Pharmacy opened five new outlets, comprising two in shopping complexes, one high street store and two specialised retail outlets.

Of its 99 stores, only 32 are 100%-owned while the rest are under its “Caring Venture Scheme” – a joint-venture agreement which enlists pharmacists as branch managers to be part of Caring community pharmacies and become shareholders of the branch.

BIMB said Caring Pharmacy’s sales of pharmaceutical products accounted for some 60% of its revenue, and the remaining 30% and 10% came from ethical medicine and over the counter drugs, respectively.

The research firm added that although the impending goods and services tax, which comes into effect next April, would soften demand, healthcare products generally enjoy inelastic demand, which means pharmacies should see minimal impact from the new tax regime.

Caring Pharmacy posted net profit of RM6.62mil in the third quarter ended Feb 28 and RM13.84mil in the nine-month period.

Source: The Star

[winston]

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RHB Research maintains Neutral on Caring

KUALA LUMPUR: RHB Research stays Neutral on Caring Pharmacy with a target price of RM1.70 based on a 18 times CY15F price per earnings (P/E).

In a note on Wednesday, it said that its target P/E is a discount to bigger healthcare stocks like KPJ Healthcare at 26 times FY15F P/E.

"As we expect Caring’s earnings growth to be capped by its expansion plans and operating cost pressures, we maintain our Neutral call," it said.

It added that Caring said it was was reviewing its expansion strategy in light of the recent FY14 earnings disappointment.

Caring admitted to being too aggressive with its expansion plan post initial public offering and, therefore, expected to be more selective in opening its future new outlets, taking into account important criteria like good customer flow, affluent and educated population catchment, and matured townships with a considerable aged community.

"Caring’s disappointing FY14 earnings were mainly attributed to underperforming new outlets, which led to an increase in operating costs on a rise in marketing and promotional activities undertaken to boost customer flow," it said.

RHB said while it expects FY15 revenue to continue growing by 12.7% on increasing contributions from existing and stable new outlets, we expect 1HFY15 to be a rather muted period for Caring as it gradually tries to get back on track and take control of its spiralling operating costs.

"We believe full-year margins will be squeezed on the back of intensifying competition from independent retail pharmacies and its continuing expansion plans. However, we expect conditions to improve in 2HFY15 onwards on the aforementioned positives," it said.


Source: The Star

[winston]

not vested

Caring Pharmacy down on analysts Sell call

KUALA LUMPUR: Caring Pharmacy fell at mid-morning on Thursday after analysts downgraded the stock to Sell from Neutral, due to its lower quarterly earnings.

At 11.44am, Caring fell six sen to RM1.48 with 294,900 shares done between RM1.47 and RM1.53.

The FBM KLCI was up 2.38 points to 1,841.93. Turnover was 662.19 million shares valued at RM792.05mil. There were 348 gainers, 323 decliners and 261 counters unchanged.

RHB Research has recommended a Sell call on Caring with a target price of RM1.27, in view of the increasingly challenging operating environment.

"Caring 1QFY15 earnings came in below our previous and consensus full year forecasts at 4.2% and 3.4% respectively.

"Revenue and net profit were down by 0.3% and 43.4% on-quarter respectively on stiff price competition, higher personnel costs, lower advertising and promotion income, and low contributions from new outlets," it said.

It expects Caring's operating environment to continue to be challenging in FY15, with intense pricing competition and increasing operational costs casting a pall over its outlook.

"However, management believes 2HFY15 will be a stronger period, as it expects positive contributions from new outlets opened in FY14 to start flowing in," it said.

Source: The Star

[winston]

not vested

RHB cuts Caring Pharmacy TP by 17 sen, maintains Neutral

KUALA LUMPUR: RHB Research has cut Caring Pharmacy’s target price by 17 sen to RM1.10 from RM1.27 while maintaining its Neutral call on the stock after the latest Q2 results came in below expectations.

Caring’s earnings for the first six months of the 2015 financial year were at just 35% of full-year forecast, the research house noted.

While revenue in the period improved 5.8% year-on-year, net profit declined 60.3% (RM16.1mil vs RM20.6 previously) in the face of intensifying price war within the market. Nevertheless, quarter-on-quarter numbers showed improvements – with revenue and net profit up 0.7% and 175.6% respectively.

“This was mainly attributed to 1) contributions from 12 outlets opened in 2HFY14, 2) contributions from four new outlets opened in 1HFY15, and 3) better cost management. We expect improvement in revenue and net profit to continue into the second half of FY15,” RHB Research said.

The research house is cutting its FY15 earnings forecast for Caring by 28.9% in view of the slower earnings recovery, but is keeping its FY16-17 forecasts intact for the time being.

“We maintain our Neutral call with a lower TP of RM1.10 (from RM1.27), pegged to 16 times FY15F price-earnings ratio. We believe this is fair as the lower TP reflects our view that a challenging operating environment could potentially result in a slower earnings recovery for Caring," it said.

Source: The Star

[winston]

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Vincent Tan has upped stake in Caring Pharmacy after second off-market deal with PNB in two months

KUALA LUMPUR: Tan Sri Vincent Tan Chee Yioun, the founder of Berjaya Corp Bhd, has upped his stake in Caring Pharmacy Group Bhd with the purchase of 3.1 million shares from Permodalan Nasional Bhd (PNB).

The transaction was done via a direct deal on Tuesday, according to filings with the stock exchange today by Caring Pharmacy.

No details on the value of the transaction were made available in the filings. Shares in Caring Pharmacy were last traded at RM1.94 on Thursday, July 4.

This is the second time in two months that Tan has acquired shares in Caring from PNB via direct business transactions.

Meanwhile, PNB's stake has been reduced to 20.9 million shares, or 9.6% after the latest disposal. In May, PNB sold 3.75 million shares in Caring Pharmacy to Tan in two transactions.

Tan was one of the substantial investors in Caring Pharmacy before the company went public in 2013.

Source: The Star

https://www.thestar.com.my/business/bus ... VLMLqDa.99