KUALA LUMPUR (May 31): Pharmaniaga Bhd rose as much as 43 sen or 8.5% to a more than five-month high of RM5.49 as investors got more positive on the group’s vaccine business outlook amid a spike in Covid-19 cases.
At 10.18am, the counter had pared gains at RM5.46, but was still up 40 sen or 7.91%. It was the second top gainer this morning, with 3.2 million shares traded.
Hong Leong Investment Bank (HLIB) Research analyst Gan Huan Wen said in a note today he is positive on Pharmaniaga’s prospects going forward as based on his back-of-the-envelope calculations, he expects the 14 million doses of the fill-and-finish vaccine to add about RM15.5 million at the group's earnings before interest and tax (EBIT) level.
According to Gan, this is based on the purchase price of US$11 (RM44) per dose (given that Indonesia purchased the completed Sinovac vaccine for US$13.60 per dose), an EBIT margin of 2.5% based on a three-year average logistics and distribution EBIT margin.
“While we have yet to factor in the financial impact of the additional 10 million finished doses ordered recently, we expect the earnings impact to be minimal; as the nature of these will be purely trading, we reckon the margins will be razor-thin,” he said.
Meanwhile, despite the group’s core profit after tax and minority interests (PATMI) for the first quarter ended March 31, 2021 (1QFY21) accounting for 36.3% of Gan's full-year forecast, the analyst maintained his forecasts as he expects weaker earnings for 2QFY21 due to a weaker sales volume because of the implementation of the movement control order (MCO 3.0).
“Furthermore, our FY21 core PATMI forecast is already 16.4% above the consensus estimate,” he said.
He maintained his "buy" call on the stock, and revised up his target price (TP) for Pharmaniaga to RM5.52 from RM5.27 previously.