PETALING JAYA: Duopharma Biotech Bhd
is on track for a record-breaking profit year, with earnings anticipated to increase by over 40%.
TA Research expected its earnings to increase by 41.2% to RM88.4mil driven by higher sales of 9.8%, lower active pharmaceutical ingredients (API) which have dropped by at least 10% and cost efficiencies.
“We expect Duopharma to begin realising the benefits of lower API prices from the first quarter of 2025 (1Q25) onwards as its old raw material inventory has depleted,” it said in a report.
TA Research said Duopharma’s financial year ended Dec 31, 2024 (FY24) net profit surged by 19% to RM62.6mil, in tandem with a 15.5% increase in revenue to RM813.7mil.
This robust performance can be attributed to higher sales across all three segments – public, private and export.
The strong growth primarily came from the public sector, driven by the new contract secured in 2Q24. As a result, the public sector’s revenue contribution rose to 50% in FY24, compared with 44% in FY23, said the research house.
“For 2025, we expect the public sector’s revenue contribution to increase to 53% in FY25 on the back of a first full-year earnings contribution from the new contract,” it said.
It reckoned that insulin sales contributed about 8% to 10% of FY24 revenue.
“This was lower than the value of its three-year contract, worth RM375mil, to supply the insugen-insulin human formulation, which will expire on April 28. The lower insulin sales can be attributed to a global shortage of insulin.
“Looking forward, we expect the insulin contribution to rise to RM110mil in FY25 due to increased supply from Duopharma’s Indian principal, Biocon,” said TA Research.
“We are confident that Duopharma would be able to renew the contract to supply insulin to the government, and the contract value is expected to be similar to the current three-year contract, if not higher,” the research house added.
