KUALA LUMPUR: Public Investment Bank has increased Apex Healthcare Bhd’s target price to RM5.92 after the healthcare products manufacturer’s earnings in the third quarter of its financial year 2017 beat its expectations.
The research house has also adjusted the earnings estimates higher by nine per cent to 16 per cent for financial year 2017 and 2019 following the improved performance.
Apex’s net profit for the third quarter increased in tandem with revenue growth.
Operating, pretax and net margins were better at eight per cent, 8.4 per cent and 7.1 per cent respectively compared to 7.5 per cent, 8.1 per cent and 6.1 per cent in the same quarter last year, as Apex received higher interest income from bank deposits and gain on disposal.
Reinvestment Allowance tax received by Apex also contributed to its stronger earnings.
PublicInvest expects the positive performance to sustain in the coming quarters.
PublicInvest has an “outperform” call on Apex due to the company’s additional capacity from its new Oral Solid Dosage manufacturing facility which will be ready in 2018 and strong balance sheet with net cash position.
Others include synergistic relationship with a number of multinational drug companies and wide distribution network for pharmaceuticals, over-the-counter (OTC) and consumer products in Malaysia.