KUALA LUMPUR: RHB Research has upgraded Duopharma Biotech to Buy from Sell with a new discounted cashflow-derived target price of RM4 from RM3.30 on the clarity of its Covid-19 vaccine participation in Malaysia.
The research house said on Thursday Duopharma’s prospects of participation in the vaccine had increased significantly after the government’s announcement on Tuesday.
It also pointed out the company’s human insulin contract has also been extended.
RHB Research noted a news report Science, Technology and Innovation Minister Khairy Jamaluddin as saying: “the next could be Duopharma as the company is in talks with a Russian vaccine candidate”.
Pharmaniaga and Duopharma have been recognised by the government as potential companies to undertake the fill-and-finish process for vaccines. Note that the news was related to Pharmaniaga’s signing of a 1-year binding agreement with Sinovac Life Sciences Co Ltd to purchase ready-to-fill bulk product of the Covid-19 vaccine.
“As Duopharma has the fill-and-finish capacity of six million vials or 60 million doses per year, we believe there is a high chance of it participating in Malaysia’s Covid-19 vaccination programme, ” it said.
RHB Research added the Malaysian Government extended the company’s contract period for human insulin supply by one year to Dec 1 this year.
“We gather that there will be an additional contract value of RM19.6mil. Duopharma also disclosed that the remaining value of products, yet to be drawn down by the government, stood at RM69.1mil.
“We are positive on this due to the higher FY21 revenue visibility although we have already imputed this into our earnings forecasts previously, ” it said.
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