PETALING JAYA: Duopharma Biotech Bhd
’s earnings outlook remains resilient in spite of near-term uncertainties, underpinned by a solid growth strategy, earnings visibility and measures to mitigate rising input costs, analysts say.
While geopolitical tensions in the Middle East have driven up input costs such as active pharmaceutical ingredients (API), packaging and shipping, UOB Kay Hian (UOBKH) Research noted that Duopharma has not experienced material supply disruptions as raw material availability remains intact.
“To mitigate potential risks, the group has expanded inventory coverage for key APIs and packaging materials from three to four months previously to five to six months while actively qualifying second- and third-source suppliers.”
CIMB Research noted that the company currently imports most of its raw materials from India and China but intends to navigate cost pressures by increasing reliance on local suppliers and implementing price hikes via the private sector in the second half of financial year 2026.
Duopharma has secured a contract valued at RM52mil from the Health Ministry (MoH) to supply insulin aspart over a two-year period, following the expiry of its earlier RM65.1mil contract for recombinant human insulin (RHI), which ended in May 2026.
Although the contract has expired, it expects that procurement from MoH will continue on a purchase order basis and that Duopharma will announce the renewal of the RHI supply contract, valued at approximately RM151mil over a three-year period.
It added that the combined total annual revenue from MoH insulin aspart and RHI sales is estimated to be RM76.3mil, comprising 8% of its 2026 and 7% of its 2027 revenue forecasts.
However, RHB Research flagged uncertainty due to potential delays in the company’s approved products purchase list (APPL) tenders, given that APPL contract negotiations, which would have typically commenced six-to-eight months before contract expiry in December 2026, have yet to begin.
“As such, it is reasonable to expect delays in the new APPL contract cycle, which may result in an extension of the existing agreement. This could be a risk to financial year 2027 revenue estimates, as 20 to 30 additional products from upcoming APPL contracts may not be included in the extension.”
Nevertheless, it noted that private-sector pricing remains more flexible and could partly serve to offset this.
RHB Research said Duopharma’s consumer product sales are likely to stay robust on the back of sustained spending on healthcare consumables.
It maintained its “buy” call on the stock, while trimming its target price to RM1.56 to reflect uncertainty over future product pricing power.
CIMB Research kept both its “buy” rating on Duopharma and its target price of RM1.81. UOBKH Research similarly maintained its “buy” recommendation with an unchanged target price of RM1.62, citing defensive earnings and cheap valuations.
