Duopharma slumps to 13-month low ahead of EGM


Duopharma Biotech headquarters.

KUALA LUMPUR: Shares of Duopharma Biotech Bhd hit a near 13-month low of RM2.35 on Thursday ahead of its shareholders’ meeting the next day for the proposed bonus issue.

It closed down 12 sen to RM2.38. There were 3.14 million shares traded at prices ranging from RM2.35 to RM2.50.

At RM2.35, this was the lowest since July 22 last year.

According to traders there were no negative news about the company in recent days but the slump in the share price could impact investor sentiment at the EGM.

Its share price had risen to a high of RM4.28 on Nov 10 last year. It then slipped to a low of RM2.44 on March 10 and rebounded to RM3.60 on June 1.

Traders said the share price had run up ahead due to the Covid-19 vaccine interest.

A shareholders meeting will be held on Friday to approve its bonus issue of 235.44 million shares on the basis of one bonus share or every three existing shares held.

Recently, Duopharma received conditional registration approval from Malaysia’s Drug Control Authority (DCA) for the Covid-19 Sinopharm vaccine developed by China National Biotec Group Co Ltd.

This followed Duopharma’s application for product registration of the vaccine, which is an inactivated virus vaccine registered under the name COVILO Suspension for Injection Covid-19 Vaccine (Vero Cell).

Earlier on Thursday, Pharmaniaga Bhd said its unit had inked an agreement with the government to supply an additional six million doses of the Sinovac Covid-19 vaccine.

On July 19, CGS-CIMB Equities Research said it was retaining its Add call for Duopharma with an unchanged target price of RM3.67 due to the potential long-term earnings prospects from the development of vaccine manufacturing capabilities, which is a key rerating catalyst.

It said it was keeping its forecasts intact for now pending the details or further developments in the supply agreement for the Sinopharm vaccine, which it thinks could be signed by end of the month.

“We retain our Add call on the stock with an unchanged TP of RM3.67 based on a CY22F P/E of 28.8 times (+2 standard deviations from its five-year mean),” the research house said.

Meanwhile, TA Research said it was “mildly positive’’ on the Sinopharma vaccine supply news and expects the earnings contribution to be marginal in the short run. Although the Sinopharm vaccine will offer a new earnings stream for Duopharma, the demand from the private sector or Malaysian citizens is highly uncertain as the Malaysia Vaccination Programme provides free vaccination for Malaysians above 12 years old.

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