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Transformation in the making
Pharmaniaga is one the largest integrated pharmaceutical companies
in Malaysia. Due to high reliance on its concession agreement
income, earnings were bumpy over the past 2 years as the
government reduced orders for pharmaceutical products. Going
forward, the earnings should improve as Pharmaniaga is increasing
the contribution of non-concession agreement through
manufacturing of in-house generic products, which enjoy better
margins than the logistics and distribution division. Expansion in
Indonesia also provides long term growth opportunities.
Largest integrated pharmaceutical group in Malaysia
Pharmaniaga is the largest listed pharmaceutical company in Malaysia by
market cap that is involved mainly in the distribution of pharmaceutical,
medical products and hospital equipment. 70% of its revenue is derived
from Malaysia and the Ministry of Health (MoH) is its largest client (67% of
total revenue). It has exclusive rights to supply 600 types of medical
products under the Approved Product Purchase List (APPL) to
Government-owned hospitals through a concession agreement, which
amounts for 50% of MoH’s total expenditure in pharmaceutical products
(RM2.1bn). This has provided a stable revenue stream of RM0.9-1.1bn
from the government over the past 6 years.
Reduce reliance on concession agreement
Pharmaniaga has a manufacturing division producing more than 480
pharmaceutical products with a total of 210 approved registrations in 14
countries worldwide. Going forward, the division is expected to be a major
earnings growth driver as it seeks to expand its non-concession revenue
by supplying more in-house generic drugs to government hospitals, private
hospitals and clinics. Non-concession revenue contribution has risen to
49% in 2016 and management expects further growth for this segment.
Indonesia, a new market to provide additional growth Pharmaniaga’s first foray into the Indonesian pharmaceutical industry was
in 2004, through 55% owned PT Millennium Pharmacon International, a
listed distributor that provides L&D services. Subsequently, Pharmaniaga
acquired a 75% stake in PT Errita Pharma, a manufacturing facility of
generics and OTC products in 2014. Indonesian operations now account
for 30% of Pharmaniaga’s total revenue and it has grown at 21% and 27%
yoy for 2015 and 2016 respectively. Given the large population size
(300m) and a relatively lower healthcare expenditure/capita of USD99 (vs
Malaysia’s USD456), longer term growth prospects should be favourable.
Earnings & Valuation Summary FYE 31 Dec 2013A 2014A 2015A 2016A Revenue (RMm) 1,946.6 2,122.9 2,189.3 2,189.0 EBITDA (RMm) 164.4 199.0 192.9 160.4 Pretax profit (RMm) 93.0 125.6 112.7 72.0 Net profit (RMm) 56.8 94.2 84.6 45.9 EPS (sen) 21.3 36.2 32.5 17.6 EPS growth (%) -11% 70% -10% -46% PER (x) 19.8 11.6 13.0 24.0 Core net profit (RMm) 112.2 115.4 85.9 53.9 Core EPS (sen) 43.3 44.6 33.2 20.8 Core EPS growth (%) 12% 3% -26% -37% Core PER (x) 9.7 9.5 12.7 20.3 Net DPS (sen) 16.0 28.0 30.0 16.0 Dividend Yield (%) 4% 7% 7% 4% EV/EBITDA (x) 7.8 6.5 7.8 10.4
Source: Company, Bloomberg, Affin Hwang
Company Update
Pharmaniaga PHRM MK Sector: Healthcare & Pharmaceuticals
RM4.20 @ 7 Sept 2017
Not rated Upside: N.A.
Price Target: N.A. Previous Target: N.A.
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
7.00
Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17
(RM)
Price Performance
1M 3M 12M Absolute -5.9% -9.1% -26.5% Rel to KLCI -6.2% -9.5% -30.5%
Stock Data
Issued shares (m) 259.8
Mkt cap (RMm)/(US$m) 1086.1/254.2
Avg daily vol - 6mth (m) 0.0
52-wk range (RM) 4.18-5.7
Est free float 15.0%
BV per share (RM) 2.08
P/BV (x) 2.01
Net cash/(debt) (RMm) (528.45)
ROE (2016) 10% Derivatives Nil Shariah Compliant Yes
Key Shareholders
BOUSTEAD HOLDINGS BH 56.2% LEMBAGA TABUNG ANGKA 10.2% KAMARUDDIN LODIN BIN 4.8% Source: Affin Hwang, Bloomberg
Tan Jun Zhang
(603) 2146 7487 [email protected]
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Largest listed integrated Pharmaceutical group in
Malaysia In 1998, Pharmaniaga was an investment holding company formed
through the merger of 3 entities (Remedi Pharmaceutical Sdn Bhd, Raza
Manufacturing Berhad, and Strand Pharmaceutical (M) Sdn Bhd) which
were involved in the manufacturing, marketing, supply and distribution of
pharmaceutical products. Pharmaniaga was subsequently listed in 1999
and is now the largest listed pharmaceutical company in Malaysia by
market capitalisation. Currently its 2 major pharmaceutical operations are
i) logistics and distribution and ii) manufacturing.
i) Logistics and distribution
This is Pharmaniaga’s core business that mainly distributes
pharmaceutical, medical products and hospital equipment, accounting for
98% of its total revenue. While it has growing global presence, we
estimate that approximately 70% is derived from the Malaysian market
and the remaining from Indonesia. Currently it has 4 warehouses located
in Selangor, Penang, Sabah and Sarawak with an approximate total
capacity of 21,000 pallets.
Fig 1: Warehouse locations and capacities
Source: Company, Affin Hwang
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Fig 2: L&D's RM2.15bil revenue breakdown in 2016
Source: Company, Affin Hwang
Malaysia’s Ministry of Health (MoH) remains the biggest client that
accounts for approximately 67% of L&D’s revenue, whereby Pharmaniaga
supplies drugs and medical items to over 148 government hospitals and
1,700 clinics nationwide. Most of the sales to the MoH are under a
concession agreement (CA), in which Pharmaniaga distributes third-party
products and its own in-house pharmaceutical products to MoH.
Fig 3: Overview of Malaysia pharmaceutical industry
Source: Company, IMS, Affin Hwang Note: Market size is derived from IMS MAT 2016/4
According to IMS Health, the market size of Malaysia pharmaceutical was
estimated at RM6.5bn in 2016; RM2.1bn of it was contributed by MoH
while the remaining RM4.4bn was generated from private sector mostly
through out-of-pocket expenditure, private health insurance expenditure,
and corporation health expenditure. Approximately half of the public
sector’s pharmaceutical purchases were procured through concession
agreement managed exclusively by Pharmaniaga.
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Concession Agreement (CA)
The concession agreement with the Health Ministry grants Pharmaniaga
the exclusive rights to supply medical products to Government-owned
hospitals. Before 1994, the logistics and distributions of pharmaceutical
and medical products were handled by the government. The concession
agreement started back in 1994 when Pharmaniaga (formerly known as
Remedi Pharmaceutical) signed a 15 years’ concession agreement with
the MoH for the privatisation of the Ministry’s pharmaceutical laboratories
and stores. In the beginning of December 2009, Pharmaniaga renewed a
10-year concession agreement with the Health Ministry until end of 2019.
Under the CA, Pharmaniaga will receive tender submissions from various
potential pharmaceutical and non-pharmaceutical vendors for more than
600 products listed under the Approved Product Purchase List (APPL)
required by the MoH. The government will then evaluate and select
vendors from the list in every 3 years based on tender pricing. As a
distributor, Pharmaniaga procures, stores, and distributes pharmaceutical
and non-pharmaceutical products to government hospitals or clinics at a
certain percentage of mark-up as its profit.
For the non-concession segment, there are more than one distributor such
as Pharmaniaga, DKSH and Zuellig Pharma that handles distribution of
pharmaceutical products which do not fall under the APPL supplied to
MoH. Non-concession revenue to MoH contributes to around 16% of its
total L&D revenue.
Temporary revenue slowdown
Driven by the growing public healthcare segment, Pharmaniaga’s revenue
has been steadily rising since 2010. However, sales from Malaysia slowed
down in 2015 and declined by 9% yoy in 2016 because of a reduction in
government orders. The main reason behind this was due to the MoH
trying to improve its distribution efficiency and reduce inventory levels of
pharmaceutical products stocked up at medical institutions.
The government also announced that the national budget allocated for
pharmaceuticals would be reduced to RM4.0bn in 2017 from RM4.6bn in
2016, which is expected to negatively impact Pharmaniaga’s revenue.
Although the adjustment of inventory levels at public hospitals/clinics
caused the reduced orders, underlying pharmaceutical demand remains
stable as more patients seek treatment. Therefore, any revenue
contraction should be temporary.
Fig 4: Revenue affected by government's reduced order
Source: Company, Affin Hwang
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Updates on concession agreement extension
The concession agreement will be ending in November 2019 and the
company is in discussion for an extension. Management is fairly confident
of securing an extension not only because of Pharmaniaga’s proven track
record but for its logistics and distribution infrastructure. Pharmaniaga has
invested more than RM200m on the implementation of the Pharmacy
Information System (PhIS) at over 1,100 facilities around the country. This
real-time central database system manages and tracks the inventory level
and minimizes medication prescription errors. Pharmaniaga has achieved
consistently 99.8% of orders being delivered successfully to hospital or
clinics nationwide in a timely manner. Moreover, MoH still needs to rely on
a sizeable distributor to manage inventory and delivery of drugs
nationwide without supply disruptions. The extension of concession
agreement is positive for Pharmaniaga as it provides stable revenue
stream from the government.
Reduce reliance on concession agreement
ii) Manufacturing
Pharmaniaga’s manufacturing division produces generic drugs which
comprises of oral solid dosages, liquid, cream and small volume
injectable, totalling over more than 480 products. Of this, there are 210
approved registrations to date to sell its products to 14 countries
worldwide. Approximately 80% of Pharmaniaga’s manufacturing sales are
generated from pharmaceutical products sold to the MoH while the rest
are derived from the private sector.
Figure 5: Manufacturing capacity in Malaysia
Dosage form Capacity per annum
Solid 5.0bn tablets and capsules
Liquid 950m litres
Cream 600 metric tons
Vials 15m units
Ampoules 20m units Source: Company, Affin Hwang
Fig 6: Pharmaniaga's manufacturing plants
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Source: Company, Affin Hwang
Going forward, the manufacturing division is expected to be a major
earnings growth driver for the company. As the sales from concession
agreement is subject to the government’s budget for pharmaceuticals,
Pharmaniaga is thus seeking to expand non concession agreement by
supplying more in-house generic drugs to government hospitals, private
hospitals and clinics. The non-concession business’ revenue contribution
rose from 38% in 2012 to 49% in 2016 and management expects this
segment to outgrow sales from the concession agreement.
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Fig 7: Non-concession agreement's contribution increases due to manufacturing and export sales
Source: Company, Affin Hwang
More importantly, the manufacturing division enjoys much higher EBIT
margin of 20% compared to 1% EBIT margin for the L&D division. Its
revenue of RM420m only contributed 20% to 2016’s total revenue of
RM2.189bn. However, its contribution to EBIT level was approximately
92% in the same year. This is because the L&D division only earns a small
percentage of mark-up for warehousing and distribution services whereas
the manufacturing division develops its own in-house products and has
higher value-add.
Fig 8: EBIT margin comparison
Source: Company, Affin Hwang
Fig 9: EBIT breakdown by division
Source: Company, Affin Hwang
By 2024, Pharmaniaga expects to develop more than 250 new products
for various therapeutic segments, such as cardiovascular, central nervous
system, anti-infective, anti-diabetics, gastro-intestinal, respiratory and
others. These products are at various stages of product development and
will be launched to the market upon expiry of the equivalent branded
drugs’ patent. The increased product portfolio should help to drive its
manufacturing growth.
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In terms of pharmaceutical manufacturing by revenue size, Pharmaniaga
is the largest among the listed local generic manufacturers. Against the
other companies, its manufacturing division’s PBT margin was fairly
attractive at 23% in 2016, only behind Apex Healthcare’s 28% PBT
margin.
Fig 10: Peer comparison for PBT margin (2016)
Source: Company, Affin Hwang
Fig 11: Peer comparison for revenue (2016)
Source: Company, Affin Hwang
Indonesia: additional growth driver Indonesia is one of the main markets for Pharmaniaga’s foray into the
regional pharmaceutical market. In 2004, Pharmaniaga acquired 55%
equity interest in PT Millennium Pharmacon International (MPI), a listed
distributor in Indonesia that provides warehousing and distribution services
for pharmaceutical products, food supplements, and diagnostic products.
Its 5 main principals are Lapi, Guardian, Dipa, Meprofarm, and Meiji.
In 2014, Pharmaniaga successfully acquired 75% PT Errita Pharma, a
manufacturing facility in Bandung, Indonesia for RM74m and has now
increased its stake to 85%. It has more than 45 products, including generic
and branded generics under Ethical segment and Over-The-Counter
segment. Its products are distributed by PT Millenium Pharmacon
International (MPI) and PT Global to government hospitals.
(RM mil)
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Fig 12: Pharmaniaga's manufacturing plant and warehouse in Indonesia
Source: Company, Affin Hwang
Indonesian operations contributed around 30% of Pharmaniaga’s total
sales. Sales growth was stronger in 2015 and 2016 after the acquisition of
PT Errita Pharma. However, profit contribution has been immaterial as PT
Errita is still loss making. The management guided that the utilization rate
of PT Errita is still low at around 40%, but looking at operations to
breakeven this year as production ramps up.
Fig 13: Acquisition of Errita boosted Indonesian operation's growth in 2015
Source: Company, Affin Hwang
Fig 14: Indonesian operation's PBT dragged by Errita
Source: Company, Affin Hwang
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Financial highlights
Revenue growth underpinned by healthcare demand
Pharmaniaga’s revenue has increased from RM1.38bn in 2010 to
RM2.19bn in 2016, growing at a CAGR of 8%. The growth was mainly
driven by an 8-9% CAGR of pharmaceutical sales in Malaysia over the
same period, underpinned by increasing healthcare demand. Also,
Pharmaniaga’s Indonesian operations helped to boost revenue growth.
Although revenue from Malaysian operations declined by 9% in 2016,
management guided that this was due to reduced inventory level among
public hospitals. As underlying healthcare demand is intact, management
believes that revenue should recover.
Figure 15: Pharmaniga's revenue growth since 2010
Source: Company, Affin Hwang
Figure 16: Net profit has been volatile
Source: Company, Affin Hwang
Volatile earnings impacted by one-offs However, Pharmaniga’s earnings growth has been volatile over the past
few years. Note that net profit was affected by a RM28m amortisation
charges on Novation Agreement and RM18m on provision for receivables
impairment in 2013.
Higher PhIS amortization cost
In 2015, net profit dipped to RM84m mainly due to lower government order
and higher amortisation of RM30m mainly for its Pharmacy Information
System (PhIS). According to management, Pharmaniaga is required by the
terms of its concession agreement to spend RM30m each year until 2019
to design, develop, supply, install, configure, test and commission,
maintain and operate the Pharmacy Information System (“PhIS”) and Clinic
Pharmacy System (“CPS”). The amortization period of the PhIS is over the
period of the concession agreement until end of 2019. However, the
management is fairly confident that the agreement will be extended by a
further 10 to 15 years. As a result, the amortization cost for PhIS is
expected to be lower at around RM10-15m annually in the coming years
after extending the amortisation period.
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Higher finance cost in 2016
Net profit declined from RM84.6m in 2015 to RM45.9m in 2016, mainly
caused by a reduction in government orders and higher operating cost.
Pharmaniaga increased borrowing to finance working capital, increasing
finance cost from RM15m in 2015 to RM34m in 2016. Pharmaniaga is
mandated by the government to maintain a consistent level of inventory at
its warehouse to avoid penalty charges for late delivery. Pharmaniaga
places orders to the suppliers 6 months ahead to fulfil these orders. When
the government reduced orders in 2016, Pharmaniaga was stuck with
higher inventory level as it needed to honour the order commitment with its
suppliers. As a result, Pharmaniaga had to increase borrowing to pay its
suppliers. Nevertheless, management is undertaking an inventory
optimization process and has reduced orders to its suppliers. With lower
inventory level, Pharmaniaga expects to reduce borrowings and finance
costs.
Figure 17: Increase in inventory due to slower sales
Source: Company, Affin Hwang
Fig 18: The management intends to reduce debt by 10-20% to lower net gearing to 80% level
Source: Company, Affin Hwang
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Figure 19: Peer comparison Bloomberg Rating Sh Pr TP Mkt Cap Year EV/EBITDA P/B
Code LC (RMm) end CY16 CY17E CY16 CY17E CY16 CY16 CY16 CY17E CY16 CY17E
Y.S.P.SOUTHEAST ASIA* HOLDINGBDMS TB BUY 2.68 3.24 366 Dec 14.1 14.8 -5.8 4.9 7.4 1.3 10.4 9.0 2.8 2.7
PHARMANIAGA BERHAD BH TB N/R 4.19 N/R 1,089 Dec 23.9 17.8 -46.0 34.0 10.4 2.0 10.0 10.3 3.8 4.0
APEX HEALTHCARE BHD APHS IN N/R 4.94 N/R 579 Mar 15.3 14.3 8.5 7.1 7.6 7.4 11.5 11.3 0.3 0.0
KOTRA INDUSTRIES BHD RFMD SP N/R 1.94 N/R 259 Dec 34.5 nm nm nm 8.2 2.0 6.1 0.0 0.0 0.0
HOVID BHD SILO IJ N/R 0.31 N/R 254 Dec 17.2 13.5 -16.3 27.8 13.9 1.3 9.3 9.0 1.6 3.2
CCM DUOPHARMA MIKA IJ N/R 2.10 N/R 586 Dec 21.8 nm -46.7 nm 9.6 1.3 5.9 0.0 3.1 0.0
Average 3,133 21.1 15.0 -21.2 18.4 9.5 2.7 8.9 6.6 1.9 1.7
PE (x) EPS growth (%) ROE (%) Div. Yield (%)
Source: Affin estimates*, Bloomberg Note: Pricing as of 7/09/2017
Note: Kotra has no analyst coverage.
Shareholding structure
In 2010, Boustead Holdings acquired Pharmaniaga from UEM for
RM534m, becoming the holding company of Pharmaniaga. Boustead
Holdings and LTAT (Armed Forces Fund Board, Boustead’s parent
company) hold 56% and 10% equity interest in Pharmaniaga respectively.
Boustead Holdings has a 20.7% equity interest in Affin Holdings Berhad
(AHB), the ultimate holding company of Affin Hwang investment Bank.
Key risks
Key downside risks include: i) termination of concession agreement, ii)
product recall, iii) price competition among generic pharmaceutical
competitors, iv) production line maintenance
Meanwhile, key upside risks include: i) higher government budget for
pharmaceutical products, ii) earlier-than-expected ramp up of PT Errita
plant, iii) faster-than-expected penetration of generic drugs in private
sectors.
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Pharmaniaga – FINANCIAL SUMMARY Profit & Loss Statement Key Financial Ratios and Margins
FYE 31 Dec (RMm) 2013 2014 2015 2016 FYE 31 Dec (RMm) 2013 2014 2015 2016
Revenue 1,946.6 2,122.9 2,189.3 2,189.0 Growth
Operating expenses 1,775.6 1,932.2 2,005.5 2,038.4 Revenue (%) 7% 9% 3% 0%
EBITDA 171.0 190.8 183.9 150.6 EBITDA (%) -20% 21% -3% -17%
Depreciation (64.6) (49.7) (57.0) (45.9) Core net profit (%) 12% 3% -26% -37%
EBIT 106.4 141.1 126.8 104.7
Net int income/(expense) (13.4) (15.5) (14.1) (32.7) Profitability
Associates' contribution - - - - EBITDA margin (%) 8% 9% 9% 7%
EI 55.5 21.2 1.3 8.0 PBT margin (%) 5% 6% 5% 3%
Pretax profit 93.0 125.6 112.7 72.0 Net profit margin (%) 3% 4% 4% 2%
Tax (36.2) (31.4) (28.1) (26.2) Effective tax rate (%) 39% 25% 25% 36%
Minority interest 1.6 0.4 0.5 0.3 ROA (%) 5% 8% 6% 3%
Core net profit 112.2 115.4 85.9 53.9 Core ROE (%) 23% 22% 15% 10%
Net profit 56.8 94.2 84.6 45.9 ROCE (%) 7% 13% 10% 4%
Balance Sheet Statement Dividend payout ratio (%) 75% 77% 92% 91%
FYE 31 Dec (RMm) 2013 2014 2015 2016
Fixed assets 353.4 369.8 406.2 420.5 Liquidity
Other long term assets 132.2 268.7 320.6 385.9 Current ratio (x) 1.1 0.9 0.9 0.8
Total non-current assets 485.6 638.5 726.8 806.4 Op. cash f low (RMm) 250 213 7 35
Free cashflow (RMm) 207 182 (54) (8)
Cash and equivalents 32.9 32.0 22.5 70.5 FCF/share (sen) 0.80 0.70 (0.21) (0.03)
Stocks 410.5 427.0 539.9 532.2
Debtors 168.8 142.9 195.3 256.3 Asset managenment
Other current assets 13.2 2.3 11.2 17.7 Debtors turnover (days) 36 27 28 38
Total current assets 625.5 604.3 768.9 876.7 Stock turnover (days) 97 86 96 106
Creditors turnover (days) 71 76 83 80
Creditors 385.5 447.4 487.1 441.9
Short term borrow ings 199.6 200.1 399.6 616.7 Capital structure
Other current liabilities 4.8 7.7 7.4 3.5 Net gearing (%) 33% 31% 67% 98%
Total current liabilities 589.9 655.1 894.2 1,062.0 Interest cover (x) 7.9 9.1 9.0 3.2
Long term borrow ings 0.3 1.1 0.6 0.2
Other long term liabilities 17.6 34.5 40.9 61.4 Quarterly Profit & Loss
Total long term liabilities 17.9 35.6 41.5 61.7 FYE 31 Dec (RMm) 3Q16 4Q16 1Q17 2Q17
Shareholders' Funds 487.6 526.5 529.4 530.6 Revenue 515.2 582.8 618.3 518.0
Minority interests 15.6 25.5 30.6 28.8 Operating expenses 484.7 556.9 571.8 490.3
EBITDA 30.5 25.9 46.5 27.6
Cash Flow Statement Depreciation 2.0 12.6 12.5 11.1
FYE 31 Dec (RMm) 2013 2014 2015 2016 EBIT 28.5 13.3 34.1 16.5
EBIT 106.4 141.1 126.8 104.7 Net int income/(expense) (8.6) (9.2) (6.3) (6.4)
Depreciation & amortisation 64.6 49.7 57.0 45.9 Associates' contribution - - - -
Working capital changes 141.7 68.9 (104.1) (63.7) Exceptional Items 2.0 4.3 0.7 1.4
Cash tax paid (33.6) (21.3) (36.0) (26.2) Pretax profit 19.9 4.1 27.8 10.2
Others (28.8) (24.9) (36.5) (25.2) Tax (7.2) (5.0) (8.5) (0.4)
Cashflow from operation 250.4 213.5 7.3 35.4 Minority interest (413.0) (0.1) 0.3 0.2
Capex (43.5) (31.4) (61.3) (43.6) Net profit 12.7 (0.9) 19.3 9.8
Disposal/(purchases) 0.3 0.6 0.2 0.2 Core net profit 14.7 3.4 19.9 11.2
Others (36.3) (123.7) (57.8) (102.7)
Cash flow from investing (79.5) (154.5) (118.8) (146.2) Margins (%)
Debt raised/(repaid) (134.1) (2.6) 191.5 208.6 EBITDA 5.9% 4.4% 7.5% 5.3%
Equity raised/(repaid) - - - - PBT 3.9% 0.7% 4.5% 2.0%
Dividends paid (37.2) (57.5) (90.6) (52.2) Net profit 2.5% -0.2% 3.1% 1.9%
Others - - - 1.0
Cash flow from financing (171.3) (60.1) 100.8 157.4
Free Cash Flow 206.9 182.0 (54.0) (8.2)
Source: Company, Affin Hwang
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Equity Rating Structure and Definitions
BUY Total return is expected to exceed +10% over a 12-month period
HOLD Total return is expected to be between -5% and +10% over a 12-month period
SELL Total return is expected to be below -5% over a 12-month period
NOT RATED Affin Hwang Investment Bank Berhad does not provide research coverage or rating for this company. Report is intended as information
only and not as a recommendation
The total expected return is defined as the percentage upside/downside to our target price plus the net dividend yield over the next 12 months.
OVERWEIGHT Industry, as defined by the analyst’s coverage universe, is expected to outperform the KLCI benchmark over the next 12 months
NEUTRAL Industry, as defined by the analyst’s coverage universe, is expected to perform inline with the KLCI benchmark over the next 12 months
UNDERWEIGHT Industry, as defined by the analyst’s coverage universe is expected to under-perform the KLCI benchmark over the next 12 months
This report is intended for information purposes only and has been prepared by Affin Hwang Investment Bank Berhad (14389-U) (“the Company”) based on sources believed to be reliable. However, such sources have not been independently verified by the Company, and as such the Company does not give any guarantee, representation or warranty (express or implied) as to the adequacy, accuracy, reliability or completeness of the information and/or opinion provided or rendered in this report. Facts, information, views and/or opinion presented in this report have not been reviewed by, may not reflect information known to, and may present a differing view expressed by other business units within the Company, including investment banking personnel. Reports issued by the Company, are prepared in accordance with the Company’s policies for managing conflicts of interest arising as a result of publication and distribution of investment research reports. Under no circumstances shall the Company, its associates and/or any person related to it be liable in any manner whatsoever for any consequences (including but are not limited to any direct, indirect or consequential losses, loss of profit and damages) arising from the use of or reliance on the information and/or opinion provided or rendered in this report. Any opinions or estimates in this report are that of the Company, as of this date and subject to change without prior notice. Under no circumstances shall this report be construed as an offer to sell or a solicitation of an offer to buy any securities. The Company and/or any of its directors and/or employees may have an interest in the securities mentioned therein. The Company may also make investment decisions or take proprietary positions that are inconsistent with the recommendations or views in this report. Comments and recommendations stated here rely on the individual opinions of the ones providing these comments and recommendations. These opinions may not fit to your financial status, risk and return preferences and hence an independent evaluation is essential. Investors are advised to independently evaluate particular investments and strategies and to seek independent financial, legal and other advice on the information and/or opinion contained in this report before investing or participating in any of the securities or investment strategies or transactions discussed in this report. Third-party data providers make no warranties or representations of any kind relating to the accuracy, completeness, or timeliness of the data they provide and shall not have liability for any damages of any kind relating to such data. The Company’s research, or any portion thereof may not be reprinted, sold or redistributed without the consent of the Company . The Company, is a participant of the Capital Market Development Fund-Bursa Research Scheme, and will receive compensation for the participation. This report is printed and published by: Affin Hwang Investment Bank Berhad (14389-U) A Participating Organisation of Bursa Malaysia Securities Berhad 22nd Floor, Menara Boustead, 69, Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia. T : + 603 2146 3700 F : + 603 2146 7630 [email protected] www.affinhwang.com