PETALING JAYA: Earnings contribution for the potential supply of Sinopharm Covid-19 vaccine to the government by Duopharma Biotech Bhd is expected to be marginal.

       The company on Friday received a conditional registration approval for the vaccine and is likely to sign an agreement by month-end with more details to be announced then.

       Duopharma is also awaiting approval to supply Russia’s Sputnik V vaccine (pic below) to the Malaysian government. But for now, even the World Health Organisation has yet to approve the Sputnik vaccine for Covid-19.

       Sputnik vaccine

       TA Research said it was “mildly positive’’ on the Sinopharma vaccine supply news and expects the earnings contribution to be marginal in the short run. Although the Sinopharm vaccine will offer a new earnings stream for Duopharma, the demand from the private sector or Malaysian citizens is highly uncertain as the Malaysia Vaccination Programme provides free vaccination for Malaysians above 12 years old.

       TA Research believes individuals or companies would purchase Sinopharm vaccines from the private sector if small to medium enterprises register and pay for their employees, especially undocumented workers, or if fully vaccinated people require additional boosters. It noted that Sinopharm vaccines are safe for kids below 12 years old and the government does not provide free vaccines to this age group at the moment.

       “Assuming Duopharma sells one million doses to the private sector at RM150 each, this will boost our financial year 2021 revenue projection by RM150mil. In terms of profit, we expect the potential earnings contribution to be at about RM7.5mil for 2021, assuming a profit after tax margin of 5%,’’ it said.

       Under the Selangor Vaccination Programme (SelVAX), the cost is RM350 for two doses per person. No change was made to the company’s earnings estimates for now, but it raised the target price on the stock to RM2.82 per share from RM2.60.

       CGS-CIMB, however, has an “add’’ call with a target price of RM3.67 a share on the potential long-term earnings prospects from the development of vaccine manufacturing capabilities.