HLIB Research gives thumbs up to Pharmaniaga’s growth

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KUALA LUMPUR: HLIB Research continues to like the growth prospects of Pharmaniaga Bhd (Pharmaniaga), supported by a positive industry outlook such as higher government healthcare expenditure, population growth, ageing demographics and expiry of blockbuster drugs.

In the financial year 2012, the group’s revenue expanded by 19.2 per cent year-on-year as all business segments registered double-digit growth, with the government concession business remaining the major contributor at 59 per cent of total sales.

In its research note yesterday, HLIB Research said Pharmaniaga had met its target in elevating the private sector contribution from 3.8 per cent to 5.8 per cent, whereby sales grew a commendable 78.9 per cent.

“The private sector will be the main driver of the firm’s domestic growth as it only commands a small market share, thus, having great potential for growth and margin expansion,” it added.

The research house said the only undesirable development for the company was the delay in the Indonesian expansion, which was anticipated to be closed by end of the financial year 2012 or early financial year 2013.

“However, we strongly believe that Pharmaniaga remains committed and has prioritised this as the main driver to fuel the company’s future growth,” it added.

HLIB Research reiterated a ‘buy’ call on the stock, with a revised target price of RM9.17 per share from RM9.71 per share previously. — Bernama