Quick take: Pharmaniaga at 3-month high after strong quarter

  • Stock on the Move
  • Wednesday, 20 May 2020

KUALA LUMPUR: Shares in Pharmaniaga Bhd rose to its highest in three months in early trade Wednesday after the company recorded a 14% increase in first quarter profit.

The pharmaceutical group added 9.57%, or 18 sen to RM2.06, its highest since February this year.

Pharmaniaga posted a 14.1% increase in net profit to RM22.40mil in the first quarter ended March 31 compared with RM19.62mil a year earlier.

Its revenue increased significantly to RM820mil for the first quarter against RM786.11mil a year ago.

The company has declared an interim dividend payout of 6 sen a share.

MIDF Research said Pharmaniaga’s first quarter earnings came in stronger at RM22.4mil, above its expectations.

“Pharmaniaga’s 1QFY20 earnings came in at RM22.4mil which was above ours and consensus’ FY20 earnings estimates at 49.4% and 51.2% respectively,” it said.

It added that the stronger earnings was attributable to higher sales orders from the Malaysian and Indonesian government hospitals during the quarter following the all-out fight to curb the spread of novel coronavirus (Covid19) in both countries.

MIDF said the dividend declared represented a payout ratio of 69.7% of its 1QFY20 EPS of 8.6 sen and translated to an annualised yield of 12.8% to yesterday's closing price of RM1.88.

MIDF has raised its FY20F and FY21F earnings forecast by +74.6% and +61.3% respectively after taking into account stronger sales momentum following the Cove 19 Pandemic situation; lower amortisation rate as PhIS costs has been fully amortised and; growing revenue contribution from the Indonesian division.

“We are revising our target price to RM3.16 (previously RM2.35) per share. This is derived via pegging our revised FY21F EPS of 31.6 sen to a target PER of 10.0x which is the average of its historical five-year rolling PER,” it said.

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Pharmaniaga , Covid-19 , dividend


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