Pharmaniaga

Pharmaniaga

Postby winston » Tue Nov 04, 2014 7:33 pm

Kenanga gives Pharmaniaga Outperform call

Pharmaniaga benefits from being the sole concession holder to purchase, store, supply and distribute approved drugs and medical products to 148 government hospitals and 1,400 clinics and district offices nationwide.

KUALA LUMPUR: Kenanga Research has initiated coverage of Pharmaniaga with an Outperform call, setting the target price at RM5.35 based on 14.5 times FY15 earnings per share for the stock which closed yesterday’s trading at RM4.60.

It noted that Pharmaniaga, a GLC-linked company, is the sole concession holder to purchase, store, supply and distribute approved drugs and medical products to 148 government hospitals and 1,400 clinics and district offices nationwide.

Kenanga said it liked Pharmaniaga for three reasons:
1) its defensive earnings being the prime beneficiary as the sole concession holder to Government hospitals and clinics nationwide,
2) its growth exposure in the healthcare and pharmaceuticals industry supported by an ageing population, and
3) decent dividend yield of 4.8%.

Pharmaniaga’s concession agreement ends in 2019, but in the meantime allows for an upward revision in prices every three years, with the last revision back in 2011.

According to the research house, the pharmaceutical sector in Malaysia has over the past decade grown at an annual rate of 8% to 10%. And now the stage is set for explosive growth, thanks to the Government’s Economic Transformation Programme which is expected deliver a 22% growth rate that will deliver RM16.6bil GNI (gross national income) by 2020, driven by higher exports of generic pharmaceuticals and enhanced generics.

Kenanga expects Pharmaniaga's manufacturing division to propel its earnings in the longer term as the group aims to add about 200 new products over the next 10 years to its existing portfolio of around 500 products.

“This should boost demand for its products and lift earnings. Additionally, its small volume injectables (SVI) will benefit from the expiration of patents of well-known drugs or better known as "patent cliff".

Technically, the patent cliff will allow generic drug makers such as Pharmaniaga to enter once-protected segments of the pharmaceutical market via the introduction of generic versions of the patented drugs." it said.

Source: The Star
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Re: Pharmaniaga

Postby winston » Sat Nov 22, 2014 6:28 am

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Pharmaniaga Q3 earnings up nearly 300% to RM14.95m
21 November 2014

KUALA LUMPUR: Pharmaniaga Bhd’s earnings jumped almost 300% to RM14.95mil in the third quarter ended Sept 30, 2014 from RM3.75mil a year ago, largely due to the favourable contribution from its operations and manufacturing.

It said on Friday the higher provision for doubtful debt a year ago was also another contributor to the growth in the current quarter’s bottomline.

its revenue increased by 13.9% to RM502.08mil from RM440.81mil. Earnings per share were 5.78 sen compared with 1.45 sen. It rewarded shareholders with an interim dividend of eight sen.

For the nine months, its earnings rose 66.2% to RM57.14mil from RM34.38mil in the previous corresponding period. It recorded revenue of RM1.495bil, which was 8.5% above the RM1.378bil a year ago.

Pharmaniaga said this was achieved as a result of strong contributions from operations and continuous improvements in manufacturing, as well as reduced operating expenses.

Pharmaniaga chairman Tan Sri Lodin Wok Kamaruddin said: “It has been a tough year, and we are pleased to have delivered strong results during our third quarter and for the nine-month period.

“The focus is on improving organic growth while taking a more dedicated approach in ensuring that operational costs are contained. This will be our direction for the remainder of the financial year.”

The logistics and distribution division’s profit before tax rose to RM21.2mil from RM10.7mil primarily due to a higher volume of sales as well as lower provision for doubtful debts.

The manufacturing division recorded profit before tax of RM66.5mil compared with RM49.3mil a year ago.

The factors were mainly due to improved contributions from operations, as well as an increase in average selling price and higher off-take for in-house products from government hospitals.

Pharmaniaga said the group would continue to expand its product portfolio via ongoing research and development initiatives.

“The group is also poised to widen its global footprint with its flagship manufacturing plant in Indonesia, PT Errita Pharma, coupled with opportunities to collaborate with multi-national companies in the European Union for contract manufacturing projects, which certainly bodes well for the group’s long-term prospects,” it said.

Source: The Star
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Re: Pharmaniaga

Postby winston » Mon Feb 16, 2015 12:15 pm

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KUALA LUMPUR (Feb 13): Healthcare outfit Pharmaniaga Bhd has entered into a supply agreement to undertake the services of purchasing, storing, supplying and delivering drugs and non-drugs to Universiti Sains Malaysia (USM).

In an announcement with Bursa Malaysia today, Pharmaniaga (fundamental score: 0.75; valuation score: 2.1) said its wholly-owned subsidiary, Pharmaniaga Logistics Sdn Bhd, had today entered into the supply agreement for the latter to undertake the services to USM.

“The value of the approved products to be supplied to USM is not stipulated in the supply agreement. Hence, the total value of the supply agreement will depend on the actual volume, the agreed unit price of the approved products and scope of services rendered from time-to-time during the contract period stipulated in the supply agreement,” Pharmaniaga explained.

The duration of supply agreement would commence from Feb 13, 2015, being the date of the supply agreement, and ends on Nov 30, 2019.

Pharmaniaga cautioned the risk factors affecting the supply agreement include execution risks such as availability and price fluctuations of the approved products.

“The supply agreement is expected to contribute positively towards the earnings and net asset per share of the Pharmaniaga group for the financial year ending Dec 31, 2015, and throughout the contract period,” it added.

Pharmaniaga climbed 0.61% or 3 sen to finish at RM4.98, giving it a market capitalisation of RM1.29 billion

Source: The Edge
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Re: Pharmaniaga

Postby winston » Mon Feb 16, 2015 12:18 pm

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Stocks With Momentum: Pharmaniaga

Pharmaniaga Bhd ( Financial Dashboard) (+ve)

PHARMANIAGA (Fundamental: 0.75/3; Valuation: 2.1/3) has gained 40 sen or 8.7% to RM4.98 since the beginning of the year.

The GLC-linked company is likely to benefit from higher government spending for healthcare, with some RM 23.3 billion allocated for Budget 2015, up from RM22.1 billion last year.

In 2013, it derived 75% of its revenue from its key client, the Ministry of Health (MOH), and 21% from Indonesia.

Pharmaniaga has a 10-year concession agreement expiring in 2019 to supply pharmaceutical products to MOH.

For 9M2014, net profit soared 66.2% to RM57.1 million on back of an 8.5% increase in revenue. Moving forward, it seeks to expand internationally and grow its in-house generic drug manufacturing operations.

Gearing was relatively high at 65.4% with net margin of 3.8%.

The stock trades at a trailing 12-month P/E of 16.4 times and 2.5 times book.

Dividends totalled 20 sen last year, giving a yield of 4.0%.

Source: The Edge
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Re: Pharmaniaga

Postby winston » Mon Feb 23, 2015 2:40 pm

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Pharmaniaga FY14 earnings jump 70% to RM93.8m (Update)

KUALA LUMPUR: Pharmaniaga Bhd’s earnings jumped 70% to RM93.84mil in the financial year ended Dec 31, 2014 from RM55.20mil a year ago, underpinned by higher revenue and lower operating expenses.

It reported on Monday its revenue increased by a slower pace of 9% to RM2.122bil from RM1.946bil. It announced a dividend of 12 sen a share.

Pharmaniaga said profit before tax (PBT) was RM125.60mil, up 35.1% from RM93mil a year ago, on higher revenue, lower expenses and provision for doubtful debts.

“The logistics and distribution division current year's PBT of RM40.1mil saw a huge jump from RM21.3mil a year ago due to the higher revenue and lower provision for doubtful debts.

“Similarly, the manufacturing division posted a stronger PBT of RM85.5mil for FY14 compared with RM71.7mil in FY13,” it said, adding this was due to improved margins following an increase in average selling price coupled with higher off-take for in-house products from government hospitals,” it said.

In the fourth quarter of FY14, its earnings increased by 76.3% to RM36.69mil from RM20.81mil a year ago. Revenue rose 10.4% to RM627.10mil from RM567.86mil.

“The improved revenue and lower provision for doubtful debts have contributed to a higher current quarter group profit before tax of RM37.9mil compared with RM33.0mil a year ago,” it said.

Earnings per share were 14.18 sen compared with 8.04 sen.

Source: The Star
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Re: Pharmaniaga

Postby winston » Wed May 06, 2015 9:09 pm

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Pharmaniaga falls on profit taking, downgrade

KUALA LUMPUR: Pharmaniaga’s share price fell to a new low of RM6.93 on Wednesday as investors locked in gains after the all-time high last week and downgrade by CIMB Equities Research.

At 11.15am, it was down 19 sen to RM7.01. There were 27,200 shares done at prices ranging from 6.93 to RM7.02.

The FBM KLCI fell 8.33 points or 0.46% to 1,819.09. Turnover was 801.62 million shares valued at RM478.59mil. Decliners led losers 336 to 260 while 272 counters were unchanged.

CIMB Research downgraded Pharmaniaga to Reduce from Hold as its valuation is rich relative to its peers in the region.

The research house said Pharmaniaga’s share price has risen 60% in the year to date and 21% in the past one month despite the absence of any apparent re-rating catalyst. Its current valuation, allows very limited room for earnings disappointment.

Pharmaniaga is now the most expensive listed drug maker in Malaysia. It was last traded at itsall-time high of RM7.47 while CIMB Research’s sum-of-parts target price is RM6.20.

“Its CY16 P/E of 19.7 times is also at only a slight discount to the average 21 times P/E of the Indian pharmaceutical sector.

“We think the discount is overly narrow as the latter has a bigger operating scale, stronger earnings growth, a wider product portfolio and better technology. Pharmaniaga’s valuation looks rich,” CIMB Research said.

Source: The Star
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Re: Pharmaniaga

Postby winston » Fri Nov 27, 2015 7:05 am

Pharmaniaga’s Q3 net profit up on better margins

BY AFIQ ISA

KUALA LUMPUR : Pharmaniaga Bhd reported an improved net profit of RM19.97 mil in the third quarter ended Sept 30, 2015 from RM14.96 mil a year ago on the back of better operating margins and lower expenses.

The pharmaceutical company’s revenue accordingly increased to RM524.41 mil for the quarter, compared to RM502.09 mil a year ago.

In a statement on Thursday, Pharmaniaga attributed the improved results to favourable margins from its manufacturing division, with ongoing cost optimisation measures leading to lower operating expenses.

The measures included batch consolidation, enhanced procurement exercises and increased production yields through utilisation of innovative methods.

The division delivered a pre-tax profit of RM79.2 mil for the nine-month period, up 19% from RM66.6 mil in the same period last year.

Meanwhile, its logistics and distribution division posted a lower pre-tax profit of RM9.8 mil for the nine-month period. This was mainly attributed to reduced government orders and higher amortisation costs.

For the nine-month period under review, Pharmaniaga’s cumulative net profit stood at RM67.98 mil, an improvement from RM57.15 mil last year.

Revenue over the same period amounted to RM1.51 bil, compared to RM1.49 bil a year ago.

“Despite the challenging economic climate, the Group was able to deliver strong results, on the back of the growing demand for healthcare products, as well as continuous cost optimisation initiatives,” said Pharmaniaga chairman Tan Sri Lodin Wok Kamaruddin.

Following the results, the group also declared a third interim dividend of 9 sen per share to be paid by Dec 21. This brings its cumulative dividends for the year to 23 sen.

Source: The Star
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Re: Pharmaniaga

Postby winston » Mon Feb 15, 2016 9:03 pm

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Pharmaceutical firm Pharmaniaga Bhd posted a 10.44% drop in net profit to RM84.04mil for the financial year ended Dec 31, 2015 mainly due to reduced Government orders and amortisation for the pharmacy information system.

Its earnings for the fourth quarter fell by more than half to RM16.06mil from a year earlier.

Source: The Star
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Re: Pharmaniaga

Postby winston » Tue Nov 22, 2016 8:47 am

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Pharmaniaga’s earnings hit by lower demand from govt hospitals

BY M. HAFIDZ MAHPAR

Pharmaniaga has a 10-year concession to store and supply medical products to government-owned hospitals and clinics.

KUALA LUMPUR: Lower demand from government hospitals reduced the third-quarter (Q3) earnings of the country’s largest listed pharmaceutical firm, Pharmaniaga Bhd, by 35% year-on-year (y-o-y).

The company, whose concession business with the Health Ministry accounted for over half of its revenue last year, said revenue in Q3 ended Sept 30 fell to RM515.22mil from RM524.41mil a year earlier due to the drop in the concession business, which in turn pulled down its earnings to RM13.06mil.

Pharmaniaga holds the exclusive concession to distribute medical products to government-owned hospitals and clinics for 10 years expiring on Nov 30, 2019.

Pharmaniaga said that during the quarter under review, in view of the ongoing negotiations to finalise the terms and conditions for the extension of its concession, the group had revised the remaining estimated useful life of the expenses incurred for the rights to supply under the concession agreement from four years to 14 years.

As a result, the amortisation charge for Q3 was reduced by RM21.5mil, it added.

The latest quarter marked Pharmaniaga’s fourth consecutive quarter of recording lower y-o-y earnings. The reasons given differed from quarter to quarter.

For the nine-month financial period, earnings fell 32% to RM46.44mil while revenue rose 6% to RM1.61bil.

The manufacturing division registered a lower profit before tax (PBT) of RM68.9mil for the period versus RM79.2mil in the previous corresponding period. This was mainly due to lower offtake for in-house products under the concession business.

The logistics and distribution division swung to a loss of RM1mil from a PBT of RM9.8mil previously.

In a press statement, Pharmaniaga chairman Tan Sri Lodin Wok Kamaruddin said there were opportunities that the group would be able to tap going forward in relation to the measures announced by the Government in Budget 2017 for health programmes.

Part of the sum of RM25bil allocated will be for building and upgrading hospitals and clinics.

For the third quarter, Pharmaniaga directors have declared a third interim dividend of 4 sen (2015: 9 sen) per share to be paid on Dec 15. This will bring the total dividend this year to 9 sen (2015: 23 sen).

Source: The Star

http://www.thestar.com.my/business/busi ... hospitals/
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Re: Pharmaniaga

Postby winston » Wed Mar 06, 2019 9:33 am

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Trading Buy: PHARMA - 7081
(Last price: RM2.36, Potential upside +17.8%)

Company Profile
Pharmaniaga is the sole concessionaire to the MoH of Malaysia.

Trading Catalyst

We believe the 43% meltdown in share prices since GE14 has grossly priced in the worries of the non-renewal of concession agreements (end in Nov 2019) with MoH.

Overall, we remain positive on PHARMA due to their:-
(i) expertise in L&D
(ii) the margins from the concession business are not attractive (c.1%-2%) to attract other distributors or competitors
(iii) it is highly unlikely that with the current financial position of the government they would undertake the necessary investments to return the drug distribution function back into public hands
(iv) increasing contribution from Indonesia due to its huge population over 270m.

Potential technical rebound and attractive risk-reward profile at 10x FY19E P/E and 1.2x P/B, which are 36.7% and 41.1% lower compared to its peers (33% from 5Y average P/E of 15x), supported by a resilient FY18-20E EPS CAGR of 7% and attractive FY19-20 DYs of 8.6-9.4%.

Technical View
Resistance: RM2.52 / RM2.66 / RM2.78
Support: RM2.28 / RM2.13
Cut loss: RM2.12

Key Financial Stats
Trading at 10.2x FY19E (36% below peers), supported by attractive FY19-20 dividend yields of 8.6-9.4%.

Source: HLIB
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