KUALA LUMPUR (Aug 13): Shares in Pharmaniaga Bhd advanced in early trade today after it secured a letter of acceptance (LoA) from the Ministry of Health to supply an additional six million doses of the Sinovac Covid-19 vaccine.
At 9.18am, Pharmaniaga added 1.65% or 1.5 sen to 92.5 sen, valuing it at RM1.21 billion.
Pharmaniaga said the LoA requires the group to start supplying the vaccines immediately and complete by the end of August.
"This LoA will increase the total accumulated supply of the Sinovac Covid-19 vaccine for the National Covid-19 Immunisation Programme (NIP) to 20.4 million doses," it said.
Meanwhile, MIDF Research upgraded Pharmaniaga to “trading buy” at 91 sen with a higher target (TP) price of 98 sen (from 95 sen) and said the additional vaccine supply will have material impact on Pharmaniaga’s future earnings.
In a note today, the research house said the additional procurement will positively impact Pharmaniaga’s FY21 forecasted earnings, under the condition that the new vaccine supply is from its fill-finish operation, as it holds more weight to the group’s earnings.
It said based on the current purchase price of Sinovac vaccines in Indonesia (approximately RM60 per dose at Indonesia’s vaccine ceiling price), the additional six million fill-finish vaccines produced by Pharmaniaga Lifescience Sdn Bhd could add about RM300 million in future revenue.
“We reinstate our 2HFY21 outlook that the group will be expecting a better financial performance in FY21, with the continuous boost of Sinovac vaccine supply to NIP and future sales of vaccines to private sector, GLCs and state governments, consequently contributing to widespread vaccination on the national level and socio-economic recovery from the impact of Covid-19 pandemic.
“We are revising our target price to 98 sen per share as we roll over our valuation year. Our TP is now derived via pegging FY22F (forecasted) EPS of 6.5 sen to a target PER of 15 times which is the average of its historical five-year rolling PER,” it said.