Fast For­ward

Finweek English Edition - - INSIGHT - Blair Burmeis­ter

a lot of generic role­play­ers in the coun­try and a lot of new prod­ucts – and new treat­ment cat­e­gories – be­ing launched into the mar­ket.”

The gener­ics in­dus­try in SA is grow­ing fast (mar­ket value as at June 2013 was R6.64bn), mak­ing it a good in­dus­try to in­vest in. Con­sid­er­ing this, and the healthy per­for­mance of the phar­ma­ceu­ti­cal in­dus­try over the past few years, those who are not di­rectly in­volved in the sec­tor should con­sider the top­per­form­ing JSE-listed op­tions.

Aspen’s stock value con­tin­ues to grow due to its strict fo­cus on prof­itable growth mar­kets and lines, which de­liver pos­i­tive risk-ad­justed re­turns (made pos­si­ble by the de­mand for gener­ics).

Aspen al­ready counts for one in three of all generic med­i­ca­tions sold in SA, and con­sid­er­ing the generic mar­ket saw growth of 14.5% from June 2012 to June 2013, this com­pany is the ma­jor player in a fast­grow­ing mar­ket.

The Asia Pa­cific re­gion was the largest con­trib­u­tor to rev­enue in the group for the first time in 2013, ac­count­ing for 37% of to­tal gross rev­enue. In Aus­tralia, Aspen is the l ead­ing man­u­fac­turer by scripts writ­ten (one in five scripts gen­er­ated is for an Aspen distributed prod­uct), which means that Aspen is the big­gest player in Aus­tralia’s generic mar­ket. It’s a lead­ing player in a mar­ket that is set for growth go­ing for­ward.

A cur­rent re­pur­chase au­tho­ri­sa­tion of $500m (R4.95bn) also shows us that Aspen be­lieves that it is a win­ning in­vest­ment. Al­though a por­tion of this re­pur­chase has al­ready taken place, it’s not too late to jump on board.

Health­care is a re­silient sec­tor. What­ever the state of the eco­nomic cli­mate, peo­ple will al­ways re­quire pharmaceuticals, and higher generic pen­e­tra­tion in the lo­cal mar­ket will trans­late into fairly stable cash flows for a com­pany such as Aspen.


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