Hyphens Pharma International*Official* (SGX: 1J5)

Shion

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Extract from Lim & Tan Daily Review dd 12/05/2020

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Hot stock: Hyphens Pharma up 39% after successful UK patent, product launches

Hot stock: Hyphens Pharma up 39% after successful UK patent, product launches

https://www.businesstimes.com.sg/co...9-after-successful-uk-patent-product-launches

SHARES of Catalist-listed Hyphens Pharma International made gains amid active trading on Tuesday, following an announcement that its patent for Ceradan Advanced has been granted in the UK.

Shares of the pharmaceutical and consumer healthcare group were trading at 33.5 cents as at 11.12am, up 4.7 per cent or 1.5 cents from Monday's closing price of 32 cents.

They then climbed to 44.5 cents by 3.40pm, up 39 per cent or 12.5 cents from the previous close, after almost 33.2 million shares traded.

Hyphens Pharma on Monday evening said its patent for Ceradan Advanced is also pending approval in 13 countries/regions, including Singapore, Malaysia, Vietnam, China, Europe and the US.

Ceradan Advanced is a next‐generation emollient therapy scientifically formulated for eczema‐prone skin conditions.

Hyphens Pharma chief executive Lim See Wah said patenting the company's intellectual property was "strategic", as it contributes towards the expansion of Ceradan Advanced's branding.

The company on Monday also announced the launch of two new products, Ceradan Gentle Cleanser and Ceradan Hand Lotion Sanitiser. They are available in retail pharmacies such as Guardian and Watsons in Singapore.

The two new products are expected to contribute positively to the revenue and profitability of the group, Hyphens Pharma said. However, there will not be a material effect on the net tangible assets or earnings per share of the group for the financial year ending Dec 31, 2020.
 

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Hyphens Pharma posts 2QFY20 earnings of $2.2 mil

Hyphens Pharma posts 2QFY20 earnings of $2.2 mil

https://www.theedgesingapore.com/news/results/hyphens-pharma-posts-2qfy20-earnings-22-mil

Hyphens Pharma International Limited has earnings of $2.2 million for 2QFY20, up 32% y-o-y, on the back of a 4.1% y-o-y growth in revenue to $30.2 million.

The company’s main business lines all enjoyed higher turnover, with growth especially strong from its proprietary brands of products.

“Despite the good result achieved in 1H2020, we are cognisant of the very challenging and unpredictable business environment due to COVID-19,” said Lim See Wah, executive chairman and CEO.

“Thus, we will remain diligent and agile as we navigate our path forward,” he added.

While the company is seeing mixed performance across its various distribution channels: retail’s growing but there’s a slowdown from the medical channels.

“The recovery of market demand in the regions had been inconsistent and unpredictable, and any further lockdown measures implemented will have a negative impact on the Group’s business.”
 

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Hyphens Pharma awarded e-pharmacy licence for WellAway Pharmacy

https://www.theedgesingapore.com/ne...-awarded-e-pharmacy-licence-wellaway-pharmacy

Hyphens Pharma announced on Jan 7, that its subsidiary, Pan-Malayan Pharmaceuticals has been awarded with an e-pharmacy licence for WellAway Pharmacy by the Health Sciences Authority (HSA).

WellAway Pharmacy aims to leverage on Pan-Malayan’s medical and logistical expertise, to work closely with medical clinics in Singapore in providing reliable and convenient medication delivery services to residential homes.

"With the rise of telemedicine redefining healthcare systems all over the world, e-pharmacy and home delivery services have become increasingly important to ensure that patients receive essential medications on time. We hope WellAway will contribute to the evolving development of telemedicine in Singapore,” says Lim See Wah, executive officer and CEO of Hyphens Pharma.

Shares in Hyphens Pharma closed 1 cent higher or 3.2% up at 32.5 cents on Jan 7.
 

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this stock almost didn't move in 5 years... 0.28 to now 0.29.
Heng got dividends.
 

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Hyphens Pharma's growth mindset catches the eye of CGS-CIMB​


https://www.theedgesingapore.com/ca...s-pharmas-growth-mindset-catches-eye-cgs-cimb
CGS-CIMB is initiating coverage on Hyphens Pharma with an ‘add’ call and target price of 36 cents.

This is expected to give the counter a 22% upside from its current 29.5 cent price, analyst Tay Wee Kuang writes in a Jan 6 report.

“We like Hyphens Pharma for its resilient business model and growing product portfolio as well as sales and distribution channels that will drive future earnings growth,” he quips.

Tay notes that the target price represents 13.5x FY2022 F/E and is 1 standard deviation point above the company’s historical mean since its listing in 2018.

Presently, the pharmaceutical distributor is trading at 11.1x FY2022 P/E and close to 1 standard deviation points below its historical mean.

“We believe that Hyphens Pharma’s share price has yet to reflect the value of its business acquisition of Novem, the first since its listing,” adds Tay.

Hyphens Pharma had proposed the acquisition of Novem – a Singapore-based pharmaceutical distribution business – on Nov 9 2021.

Valued at around $16.3 million, the acquisition is priced at 3.6x P/B, relative to that of Hyphens Pharma’s P/B of 1.8x. The acquisition is also seen to offer quality earnings with historically superior margins of around 18%, compared to Hyphens Pharma’s historical average of around 5%, flags Tay.

The analyst believes that the acquisition could reap Hyphens Pharma further synergies through cross-selling opportunities given the different sales channel exposure between the two companies.

It will also bring Novem’s portfolio to markets such as Vietnam, Malaysia and Indonesia, where Hyphens Pharma has a presence in.

Meanwhile, Tay reckons that Hyphens Pharma could benefit from the long runway for growth that the pharmaceutical allows.

For instance, it can reap inorganic growth opportunities such as: business acquisitions, brand acquisitions and partnerships with brand principals, he explains.

The company has demonstrated a penchant for growth via strategic acquisitions of brands like Ocean Health (health supplements) and TDF (dermatology) in 2016, and CG 210 (scalp care) in 2020.

The acquisition of Novem will see Hyphens Pharma adding over 40 brand principals and 150 products to its portfolio.

Following the acquisition, Hyphens Pharma has been maintaining a strong net cash position of $22 million as of 9M2021 (Sep 30), which allows it to “remain nimble in the face of future expansion opportunities,” says Tay.

As at 3.05pm, shares in Hyphens Pharma were up 1.5 cents or 5.09% at 31 cents.
 

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Analysts positive on Hyphens Pharma with Novem acquisition to boost growth​


https://www.theedgesingapore.com/ca...hyphens-pharma-novem-acquisition-boost-growth
Analysts are positive on Hyphens Pharma in light of a good set of FY2021 ended December 2021 results, its latest Novem acquisition, as well as the group obtaining Singapore’s first HSA-registered e-pharmacy license.

KGI Group Research analyst Megan Choo has kept an “outperform” rating but with a lowered target price of 38 cents from 48 cents previously.

Hyphens Pharmas’ results were strong for FY2021, where revenue was up 4.1% y-o-y to $125.9 million, while gross profit rose 10.2% y-o-y to $48.1 million. This was mainly due to the improvement of gross profit margin to 38.2% in FY2021, compared to 36.1% in the previous period. Net profit after tax rose 11.1% y-o-y to $6.8 million, translating to a net profit margin of 5.4%.

Moreover, basic and diluted earnings per share (EPS) increased from 2.05 cents in FY2020 to 2.27 cents in FY2021.

Earlier in December 2021, Hyphens Pharma acquired Novem, a Singapore-based leading healthcare-focused distributor of pharmaceutical products, nutraceutical products and medical services, for a consideration of $16.3 million. Thus far, the acquisition has already added close to $1 million revenue within a month of operations in December 2021.

Novem has more than 40 brand principals mainly across Europe and Asia and serves more than 1000 active customers including hospitals, polyclinics, specialists and general practitioners.

Considering how Novem has over 150 products in its portfolio, including proprietary brands of generics and in-house developed nutraceutical products, the acquisition of Novem is expected to bring further earnings accretion to Hyphens Pharmas’ FY2022 results and beyond, according to Choo.

Moreover, the group in January launched its e-pharmacy business WellAway. This new venture seems to be opening up opportunities for the group. Most recently, the group’s subsidiary Docmed announced a partnership with SATA CommHealth to deliver a new primary healthcare system for migrant workers from April onwards. Under this partnership, WellAway will be providing its e-pharmacy services and medication delivery to the migrant worker patients following teleconsultation done by SATA CommHealth.

The way Choo sees it, Docmed’s collaboration with WellAway eliminates the need to manage a large inventory of medications and e-prescriptions are conveniently delivered to the masses.

Additionally, Pharmaceutical group Servier Singapore, is working closely with WellAway to explore possibilities of healthcare digitalisation. “With this golden ticket of being Singapore’s first HSA-registered e-pharmacy, more collaboration and deals are expected to occur moving forward,” says Choo.

On the other hand, SAC Capital analyst Lam Wang Kwan is also upbeat on the stock as he has kept a “buy” rating on Hyphens Pharma with an unchanged target price of 40 cents.

Lam is impressed with the group’s FY2021 results, as its revenue saw growth thanks to better sales and the contribution from the group’s latest acquisition of Novem. Moving forward, the analyst expects that Novem will contribute about $13 million in sales and approximately $1.5 million to the bottom line for FY2022. “The amortisation of goodwill is expected to kick in from FY2023 onwards, offsetting the gain by approximately $1.2 million annually over the next 10 years,” the analyst writes.


Lam forecasts an 18.3% and 8.0% topline growth in FY2022 and FY2023. This translates to a 24.4% bottom line growth in FY2022 in the absence of costs associated with acquisition of Novem before growth moderating to 1.8% in FY2023 due to amortisation of goodwill.

Novem is entrenched in the public sector with 60% of sales going to government hospitals and polyclinics. Lam also points out that the return of elective surgeries as restrictions eased could further lift business sales.

Moreover, Hyphens Pharma’s Vietnam operation is also expected to improve as the country returns to normalcy, though the gross margin is likely to dip as a result. For Indonesia, it saw approximately $1 million revenue growth last year despite facing product shortage. E-commerce efforts only began in 2HFY2021 in Indonesia as well, as the group noted that there is still room for growth in the market.

“We believe the Indonesian market could provide the group with significant room for growth going forward,” says the analyst.

As for Novem, the analyst is upbeat on its future prospects following it obtaining its e-pharmacy license. “One distinct advantage for Hyphens in the e-pharmacy business is that they do not require additional working capital to build up inventory as they can tap into the existing inventory in pan-Malayan,” says Lam.

While Lam feels that the partnership with WellAway is not going contribute significantly to the group immediately, the first mover advantage could see Hyphens Pharma gaining an edge over its potential competitors when telemedicine takes off.

As at 11.34am, shares in Hyphens Pharma are trading at 1 cent up or 3.45% higher at 30 cents at a FY2022 P/B ratio of 1.4x and dividend yield of 2.9%, according to SAC Capital’s estimates.
 
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