KUALA LUMPUR: RHB Investment Bank Bhd has maintained ‘buy’ call on Duopharma Biotech Bhd with an unchanged target price of RM1.91 per share after registering a sturdy numbers for financial year 2021.

       The research house said Duopharma reported a core net profit of RM67 million, at 97 per cent of its full-year estimates with topline growing 12 per cent year-on-year (yoy), sustained by the continued robust demand for consumer healthcare products and recovery in the public health sector.

       In a research note today, RHB said despite the depreciation of the ringgit against the US dollar, the company continued to record resilient gross margins for the fourth quarter 2022 (4Q22).

       "We believe its long-term earnings growth prospects remain bright, on the back of its efforts to improve product offerings while venturing into high-value therapies,” it shared.

       Meanwhile, CGS-CIMB reiterated ‘hold’ call on Duopharma with an unchanged TP of RM1.60.

       The research house said Duopharma’s FY21 results were in line with its expectation but 4Q21 core earnings per share (EPS) fell 10 per cent yoy due to lower margins.

       CGS-CIMB said yoy local sales grew a healthy 8.1 per cent yoy, thanks to continued good take-up of its consumer healthcare (CHC) products, such as immunity-boosting products which is 20 to 25 per cent of total sales and recovery in public sector sales.

       Nonetheless, it said local revenue eased 14.0 per cent quarter on quarter (qoq), mainly due to seasonally weaker public sector demand while 4Q21 export revenue, which is 5.0 per cent of total, remained tepid at RM8 million due to COVID-19-led logistical challenges.

       However, CGS-CIMB said it forecast a better FY22 performance for Duopharma and raised FY22 core EPS by 11 per cent to factor in potential one-off RM10 million tax savings of reinvestment allowance upon the commissioning of its K3 plant targeted for FY22.

       "We now see core EPS growing a strong 19 per cent in FY22 from private/public sector sales growth and tax savings, before moderating to 4.0 per cent in FY23 due to some softening in CHC sales growth post-COVID-19 and lack of tax savings, and then resuming to 10 per cent in FY24,” it added. - Bernama