PETALING JAYA: Duopharma Biotech Bhd
is expected to remain resilient despite geopolitical uncertainties, supported by limited exposure to Middle East markets, a stronger Asean export outlook and its proactive inventory strategy.
In a report, UOB Kay Hian Research (UOBKH Research) said the pharmaceutical company has limited exposure to Middle East export markets, with overall export growth projected to be driven by the Philippines and Singapore.
“Export revenue contributed 6% of 2025 sales, with less than 5% attributed to Middle East markets,” it said, adding that these markets had already been affected by recent geopolitical tensions.
“For 2026, export sales are expected to grow. This is driven by sustained momentum in biosimilar Erythropoietin in the Philippines (40% of export sales) and a rebound in Singapore (36%) following 2025 destocking, more than offsetting a likely decline in Middle East contributions,” it said.
The research house said supply chain risks are manageable, as the company has taken steps to strengthen its inventory buffers.
“In response to rising uncertainty, management has proactively increased inventory buffers, lifting finished goods from two to three months to four to six months, and targeting up to seven to eight months from four to six months of active pharmaceutical ingredients (APIs) for key stock keeping units,” it said.
UOBKH Research added that the strategy focuses on high-volume and essential medicines, allowing Duopharma to secure supply ahead of potential disruptions.
“This extended inventory coverage provides a meaningful buffer, offering resilience against potential supply disruptions going forward,” it noted.
On cost pressures, UOBKH Research said the impact remains limited and concentrated in a small segment of Duopharma’s business.
“API supply remains largely stable, with only a small subset (less than 5% of revenue) experiencing price increases – most notably paracetamol APIs, which have risen by 30% to 50%,” it said.
The research house said the impact is cushioned by existing inventory, while stronger demand may offset any higher costs.
“The stockout of Panadol in 2024 drove record sales of Uphamol, suggesting that higher API costs may be partially offset by stronger demand and volume upside for the product,” it said.
On contracts, the research house said Duopharma recently secured two insulin-related letters of award on Feb 16, 2026.
These comprise RM52.5mil over two years via tender and RM65.1mil for human insulin over three months via direct negotiation as a bridging contract, with the group now awaiting a longer-term award.
“Management indicated that the Health Ministry is expected to award a three-year human insulin contract by the end of the month,” it said, adding that this follows its previous RM375mil three-year deal which expired in April 2025.
UOBKH Research has maintained a “buy” call on the stock with a target price of RM1.62 a share.
“Duopharma offers highly visible defensive earnings and bargain valuations,” it said.
It continues to favour the stock for its defensive domestically-driven earnings profile, as well as potential upside from foreign-exchange movements.
