Earnings boost from vaccine sales


CGS-CIMB Research has raised its financial year 2021 (FY21) forecast on Pharmaniaga earnings by 4% and another 3% in FY22.

PETALING JAYA: Sinovac Covid-19 vaccines (SV) are expected to boost Pharmaniaga Bhd’s earnings in the coming quarters mainly from the private sector and exports.

CGS-CIMB Research has raised its financial year 2021 (FY21) forecast on Pharmaniaga earnings by 4% and another 3% in FY22.

“We assume slightly higher gross margins for filled-and-finished SV (higher-margin private sector sales in the second half of 2021).

“We expect about five million filled-and-finished doses held in stock to be depleted in the first half of 2022 and project two million doses to be supplied in the fourth quarter of 2021,” the research house said in a report yesterday.

It expects an additional supply of about three million filled-and-finished doses in the first half of 2022 largely for the private sector and export market.

CGS-CIMB noted that the SV supply contributed about 70% or RM70mil of the total third quarter 2021 pre-tax profit for Pharmaniaga.

“We believe this suggests about 6% pre-tax profit margin based on third quarter 2021 external manufacturing revenue of RM1.27bil, which is in line with our expectation,” it said.The pharmaceutical group’s net profit surged more than 33 times to RM49.84mil for the third quarter of 2021 from RM1.44mil a year ago, on the back of higher revenue.

In a filing with Bursa Malaysia yesterday, Pharmaniaga said its revenue for the quarter jumped to RM2.13bil from RM624.80mil a year ago, driven by growth across its concession, non-concession and Indonesian businesses.

The research house says that Pharmaniaga has 10 million doses of SV left in stock as at end of the third quarter this year, about half are in bulk unfinished form (to be filled and finished).

In the coming months, the company hopes to utilise its vaccines stockpile by supplying it as booster doses to the private sector and potentially Health Ministry and potentially supplying it as primary series doses for children aged six to 11 years pending regulatory approval.

Pharmaniaga could also potentially export its SV to other Asian and African markets, CGS-CIMB added.

It pointed out that there have been 11 million Sinovac vaccine recipients, majority of whom were vaccinated during the peak of the national vaccination drive in from July to September, and thus may opt for a booster dose in December this year through February next year.

“Private sector SV sales (higher margin) have already been gaining pace on a weekly basis. Pharmaniaga is optimistic that export sales of the vaccine will pick up in the coming months, as it is in negotiations with several countries,” CGS-CIMB said.

On Wednesday, Pharmaniaga group managing director Datuk Zulkarnain Md Eusope said the future earnings growth for the pharmaceutical group would stem from the manufacturing of halal vaccines and halal insulin.

For halal insulin manufacturing, he added that the group would produce three insulin products locally at its high-technology plant in Pharmaniaga Lifesciences in Puchong, allocating a capex of RM60mil for equipment and facility renovation.

It plans to start commercial production of the halal insulin products by 2025.

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