PETALING JAYA: Pharmaniaga Bhd
is poised for a steadier expansion in 2026, underpinned by vaccine development, new product launches and sustained government healthcare spending, even as analysts pencil in more moderate earnings growth following its latest results.
The group is targeting stronger contributions from higher-margin manufacturing and regional logistics, with projections for 2026 anchored on improved operational efficiency and an anticipated exit from the Practice Note 17 (PN17) status by the end of the first quarter of financial year 2026 (1Q26).
In its recent note, Kenanga Research said Pharmaniaga’s latest quarterly numbers were encouraging, in line with its expectation, thanks to better contribution from the medical supply unit and demand for generic drugs on higher delivery volume to government hospitals, and the addition of new products in the Approved Products Purchase List list.
The research house reiterated its “underperform” call on Pharmaniaga, but raised its target price for the counter to 20 sen from 15 sen previously.
“We raise our target price to 20 sen based on 18 times 2027 forecast earnings per share (rolled forward from 2026), which is at a 20% premium to the peer average to account for Pharmaniaga moving up the value chain via focusing on high-margin manufacturing of biopharmaceuticals,” Kenanga Research explained.
Additionally, it noted that the counter is trading at 32 times and 29 times the 2026 and 2027 forecasts, respectively, versus a projected net profit growth of 21% per annum.
Kenanga Research highlighted that Budget 2026 allocations to the Health Ministry rose to RM46.5bil, with RM4.4bil earmarked for medical supplies and RM2.1bil for concession operations.
It highlighted that the biopharmaceutical segment registered RM13mil in full-year 2025 sales, driven by demand for EuvaxB and SkyCellFlu vaccines, with development of PCV13 and Hexavalent vaccines progressing well.
“Looking ahead, the group expects this positive momentum to continue in 2026, supported by an increasing number of planned corporate vaccination programmes.
“Specifically, development of the PCV13 and Hexavalent vaccines is progressing well, further reinforcing its biopharmaceutical capabilities and strengthening its long-term growth pipeline,” it added.
“In the pharmaceutical segment, the group plans to introduce six major new products, further strengthening its portfolio and positioning Pharmaniaga to capture growing demand, particularly within the private healthcare market.”
MBSB Research maintained a more constructive stance, despite trimming earnings forecasts for 2026 to 2028 by 29%, 35% and 26%, respectively.
“We expect that Pharmaniaga’s performance in 2026 will continue to improve based on continuous government support on concession for its drugs and logistics businesses, the anticipated PN17 exit, increased demand for insulin and vaccines regionally and globally, as well as an anticipated RM2.1bil budget for concession in financial year 2026,” the research house stated.
It raised its target price to 36 sen from 29 sen and maintained a “buy” recommendation, citing stronger long-term prospects in manufacturing, logistics and its role as a contract development and manufacturing organisation.
Pharmaniaga reported a profit after tax of RM8.7mil in 4Q25, up from RM2.4mil a year earlier, marking its eighth consecutive profitable quarter.
For the full year, its 2025 net profit stood at RM48.5mil on revenue of RM3.93bil, reinforcing its financial recovery as it advances towards exiting its PN17 status.
