New product boost for Duopharma
24 May 2023
All of this is anticipated to help mitigate cost pressures from rising overnight policy rates, electricity tariffs and labour costs, said TA Research.
On the other hand, RHB Research stated in a report that it believes Duopharma’s financial performance will continue to be supported by robust drug procurement, in-elastic consumer demand towards healthcare products and potential synergies generated from its investee companies.
In the first quarter of 2023 (1Q23), Duopharma recorded a core profit of RM28.3mil quarter-on-quarter, aided by export sales pick-up that benefited from the reopening of borders as well as government purchase that boosted revenue by 31.9% to RM200.5mil.
In terms of sales, local sales remained as the key contributor to the group as it saw resilient growth which accounted for 94.1% of revenue, while exports accounted for 5.9%.
According to RHB Research, the local sales segment was 33% quarter-on-quarter better than in 4Q22 on seasonality effects in conjunction with the Health Ministry’s accounts closing period towards year’s end.
As for the group’s gross profit margin, it held up at 41.2%, which expanded 0.4 percentage points year-on-year.
This was driven by the group’s better product mix and timely average selling prices adjustments to counter the impact of the weakening ringgit against the dollar.
TA Research has upgraded to a “buy” call on Duopharma with a higher target price of RM1.65 per share.
RHB Research maintained a “buy” call with a target price of RM1.75 per share, based on its methodology as Duopharma’s environmental, social and governance score is below the country median.
Source: The Star