FIGURE 1: DUOPHARMA
BIOTECH BERHAD LAST 5 YEAR SHARE PRICE TREND
**analysis
based on 2020 annual report.
1. GENERAL
INTRO: DUOPHARMA manufactures, distributes, and imports pharmaceutical
products and medicines in Malaysia
2.
NOTABLE
POINTS:
a. DUOPHARMA is the first in Malaysia to
commercially produce a cancer drug, Lebreta, it is also investing in a US-based
company of novel treatments for neurodegenerative diseases such as Alzheimer’s
and Amyotrophic Lateral Sclerosis.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (RM million): 569.9 million as
reported in 2020 annual report, this is a medium range revenue company. Between
year 2012-2020, the counter’s revenue has been on an overall rising trend. Likewise,
both of the Profit Before Tax (PBT) and Profit After Tax (PAT) are also on a gradual
rising trend.
b.
SHARE PRICE: in the last 5 year share price
range between RM1 to RM4.
c. EARNING PER SHARE (EPS): earning per share in
last 5 years was overall rising, whereby it ranged from 4.12 to 8.46 sen. DUOPHARMA
has achieved a very good track record of EPS rising year by year, in the last
five years.
d. PRICE TO EARNINGS (P/E) RATIO: current P/E ratio
is 32.1, which shows that the share price is quite expensive to invest in.
e.
FUTURE POTENTIAL/PROSPECTS: share price expect
to be stable in the next few years.
f. CAPITAL EXPENDITURE (CAPEX): spending on
purchase of new fixed assets and other investments amount to about RM 56.1
million, which is around 5% of total assets. This shows that the management is making
a major investment in the future growth and expansion of the business.
4.
IS
THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2020 financial year, DUOPHARMA
declared a dividend payout of 6.5 sen to its shareholders, which amounts to a
dividend yield of 2.8%.
b.
DIVIDEND PAYOUT RATIO: The dividend-to-earnings
payout ratio is about 76%.
c. CONSISTENCY: This counter’s dividend payout has
been very consistent (dividend paid to shareholders in 5 years out of 5 years)
in the last five years, whereby dividends paid to shareholders ranged from 2.8
to 6.5 sen per share.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2020 financial year, DUOPHARMA
reported a moderate return of shareholders’ equity, at 9.87%.
b. COST-TO-INCOME RATIO: In FY2020, the report
cost-to-income ratio is 648%. This shows that the cost of doing business is high.
c. DEBT-TO-EQUITY (GEARING) RATIO: Its gearing
ratio is at 64%, whereby its debt level is lower than its equity, resulting in
a healthy balance sheet.
d.
CASH FLOW: cash flow is positive, at around RM 158
million, equivalent to RM 0.22 per share.
6.
OTHER
INDICATORS:
a. SUPPORT BY INSTITUTIONAL INVESTORS: This counter
is very well supported by institutional investors, there are 27 institutional
investors at top 30 major shareholders list, including EPF (9.12%), KUMPULAN
WANG PERSARAAN (0.25%), SKIM AMANAH SAHAM BUMIPUTERA (4.75%), a few investment
funds, as well as insurance funds and retirement funds. Its major shareholder
is PERMODALAN NASIONAL BERHAD (46.85%).
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