KUALA LUMPUR (Feb 23): Apex Healthcare Bhd shares rose 5.71% this morning after reporting an 89.4% jump in net profit for its fourth quarter on higher sales and high margin products in the associates' revenue mix.

At 10.23am, the stock rose 28 sen to RM5.18, after paring gains, with 346,800 shares done for a market capitalisation of RM574.01 million.

Apex Healthcare said net profit for the quarter ended Dec 31, 2017 (4QFY17) came in at RM12.8 million from RM6.76 million a year earlier also because of recognition of RM2.9 million as a share of results from the associate company versus RM2.9 million losses in 4QFY16.

Revenue for the quarter went up 5.85% to RM152.59 million, against RM144.15 million, driven by good growth in pharmaceutical sales to both private and government sectors.

In a note to clients today, Affin Hwang Investment Bank Bhd increased the earnings for 2018 to 2019E by 5% to 6% to factor in higher profits from associates of RM5 million compared to its previous assumption of RM1.5 million to RM2 million.

Analyst Jun Zhang Tan maintained a "buy" rating with a higher target price of RM6.40 from RM6.10 based on an unchanged 16 times earnings per share for 2018.

"We continue to like Apex for its solid execution and favourable outlook driven by its new oral solid dosage manufacturing facility — SPP NOVO, which is expected to be completed in the third quarter of 2018. Key investment risks include delay of the SPP NOVO completion, product recall risks, competition risks, and low liquidity risks," he added.