This article first appeared in The Edge Malaysia Weekly on August 16, 2021 - August 22, 2021

Despite a slow start to the vaccination process, Malaysia has picked up speed in its race to reach herd immunity. We are averaging more than 400,000 doses daily and are on track to achieving the herd immunity threshold at end-October.

The country has secured vaccine doses to cover 130% of the population, meaning that there should be more than enough to cover the population and undocumented workers as well.

The vaccines being administered so far are Pfizer, AstraZeneca and Sinovac. Others in the pipeline are Cansino, Johnson & Johnson and Moderna.

Sinovac and Cansino are being handled by local companies Pharmaniaga Bhd and Solution Group Bhd respectively.

Pharmaniaga delivered 12 million doses of the Sinovac vaccine in June and was awarded another contract to supply six million doses to the government last week. However, there is no value stated in the supply contract.

Similarly, in Solution Group’s announcement of its mandate to supply 3.5 million doses of the Cansino vaccine to the government, there is no value attached to the supply contract.

In all probability, the companies are not allowed to disclose the value of the contracts. The government must have its reasons for that.

But for investors, not knowing the value of the contracts means they do not know how much the mandate from the government will contribute to the companies’ bottom lines.

Pharmaniaga supplies the Sinovac vaccine after undertaking the fill and finish process at its facility, which means the margins are better. As for Solution Group, it is awaiting approvals to start undertaking the fill and finish process.

But what kind of margins the vaccine business brings to these companies is still unclear.

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