Outbreak may have potential spill-overs to pharma players

​Pharmaceutical players could potentially benefit from a surge in demand for products related to the prevention of seasonal viral diseases with similar symptoms to the coronavirus, analysts observe, but also note that the impact to their respective bottom lines is likely to be minimal

Pharmaceutical players could potentially benefit from a surge in demand for products related to the prevention of seasonal viral diseases with similar symptoms to the coronavirus, analysts observe, but also note that the impact to their respective bottom lines is likely to be minimal.

Affin Hwang Investment Bank Bhd (AffinHwang Capital) noted that a lot of people have been rushing to stock up on face masks, hand sanitisers, consumer health products and herbal products.

“Given that the speed of contagion is nearly double that of its predecessor Severe Acute Respiratory Syndrome (SARS), we noticed there is an obvious trend of rising health awareness which has led to higher demand for products related to prevention of seasonal viral diseases with similar symptoms such as flu, cough and fever,” AffinHwang Capital said.

“A lot of people are rushing to pharmacies, convenience stores and Chinese medicine shops to stock up on face masks, hand sanitisers, consumer health products and herbal products, especially those that could help boost the immune system such as Vitamin C and liquorice.

“We think that this could potentially benefit the pharmaceutical players that are involved in the production, wholesale, distribution and/or retail of the abovementioned products.”

Based on the research firm’s channel checks, most of the pharmaceutical players have seen a strong surge in demand for these products.

That said, AffinHwang Capital noted that it is difficult to quantify these potential positives given the lack of available data, such as a breakdown of the revenue contributions from these products to the groups.

“Based on our estimates, the contributions from these products to the pharmaceutical players are not very significant, hence the impact to bottom line from the surge in demand for consumer health products is likely to be minimal relative to the group as a whole.”

Nevertheless, in the long term, the research firm believed the rising health consciousness should be positive to the healthcare sector as people are increasingly aware of the need to stay healthy and keep their immune system strong.

Source: The Borneo Post 

Posted on : 14 February 2020
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Last Updated : Thursday 21st May 2020