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CGS-CIMB Research retains Add for DPHARMA (7148) DUOPHARMA BIOTECH BHD, TP RM3.67

KUALA LUMPUR: CGS-CIMB Equities Research is retaining its Add call for Duopharma Biotech with an unchanged target price of RM3.67 due to the potential long-term earnings prospects from the development of vaccine manufacturing capabilities, which is a key rerating catalyst.

It said on Monday it was keeping its forecasts intact for now pending the details or further developments in the supply agreement for the Sinopharm vaccine, which it thinks could be signed by end of the month.

“We retain our Add call on the stock with an unchanged TP of RM3.67 based on a CY22F P/E of 28.8 times (+2 standard deviations from its five-year mean),” the research house said.

Duopharma received conditional registration approval from Malaysia’s Drug Control Authority (DCA) for the Covid-19 Sinopharm vaccine developed by China National Biotec Group Co Ltd.

This followed Duopharma’s application for product registration of the vaccine, which is an inactivated virus vaccine registered under the name COVILO Suspension for Injection Covid-19 Vaccine (Vero Cell).

“While conditional approval has been given, we are not privy to further details for now as the supply agreement with Sinopharm has yet to be announced.

“We gather from a press conference by the Coordinating Minister for the National Covid-19 Immunisation Programme (PICK) Khairy Jamaluddin that Sinopharm vaccines will be brought in for use by the private market for now and will only be included in PICK if supply issues arise for the existing vaccines in the PICK portfolio,” it said.

CGS-CIMB Research said based on announcements by the authorities, the current vaccine supply in the PICK portfolio includes those from Pfizer-BioNTech, Sinovac, AstraZeneca, Cansino and from the Covid-19 Vaccines Global Access (COVAX) facility.

To recap, Duopharma had previously announced it signed an agreement to supply the Malaysian government with 6.4 million doses of the Sputnik V vaccine produced by the Gamaleya Institute of Russia.

Although the agreement was signed in Jun 2021, the vaccine has yet to receive registration approval from Malaysa’s DCA.

The Sputnik V vaccine has also incidentally yet to receive approval from the World Health Organisation (WHO). If the Sputnik V vaccine receives approval, the procured doses could further pad the PICK portfolio as Duopharma’s supply agreement with the government is intact.


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