PETALING JAYA: Pharmaceutical outfit Duopharma Biotech Bhd
is expected to see earnings growth of 18.5% year-on-year for the financial year ending Dec 31, 2026 (FY26) supported by margin expansion, stronger sales across all segments and, in particular, the government, says TA Research.
It said the government segment remains the company’s largest revenue contributor, accounting for 53% of FY26 revenue, but noted that demand may peak in 2026, the final year of the current Approved Products Purchase List (APPL) contract.
Under the current APPL contract, the company supplies 100 pharmaceutical and non-pharmaceutical products worth approximately RM684.2mil to government healthcare facilities through to the end of this year.
“Beyond this, we expect the new three-year APPL contract to surpass the current contract value,” said the research house.
“Long-term growth prospects remain supported by initiatives such as Off-Take Plus, which guarantees Health Ministry procurement of locally manufactured products and the New Industrial Master Plan 2030.”
TA Research maintained its “buy” recommendation on the stock with an unchanged target price of RM1.69. The company’s FY26 earnings have been raised by 2.2% while earnings for FY27 and FY28 have been raised by 1.2%, respectively, after incorporating FY25 audited numbers.
The research house expects FY26 gross profit margin to remain resilient at 39%.
It pointed out that the Middle East conflict would have only a minimal and indirect impact on earnings, with the effect estimated at below 3%, mainly due to higher active pharmaceutical ingredients (APIs), packaging and diesel costs.
This would be based on the company’s APIs inventory buffer of three to six months and the strong ringgit but cautioned that it has limited ability to pass on higher input costs to the government segment should the conflict persist and API prices continue to rise.
