Analysts neutral on Malakoff’s disposal of MacArthur Wind Farm
“We will continue to intensify our focus on halal pharmaceuticals as we believe the demand for such products is growing, and it also provides Duopharma Biotech with a differentiated offering amongst generics manufacturers. Our collaboration with KPJ Healthcare Berhad signifies our intent towards this objective,” said Leonard Ariff Abdul Shatar, Group Managing Director of Duopharma Biotech.
“KPJ Healthcare Berhad is a well-known healthcare provider in Malaysia and the region, and we feel proud to collaborate with KPJ on this halal pharmaceuticals initiative. I believe that there are synergies that both parties can leverage on in the halal pharmaceuticals space,” he added.
The halal pharmaceutical industry globally is a multibillion-dollar industry with expenditures of US$75 billion in 2017. It is expected to grow to an estimated US$132 billion by 2021. Malaysia is fast becoming recognised as the leading global halal hub, as well as the global reference and trade centre for the mainstream halal industry.
Duopharma Biotech, which is majority owned by Permodalan Nasional Bhd (PNB), is the largest Malaysian pharmaceutical manufacturer and trading company.
“Duopharma Biotech has been in the market for many years, producing and supplying high quality prescription drugs for both the public and private markets in Malaysia. We also produce various consumer healthcare products which are household names such as Flavettes, Champs, Uphamol and Proviton, amongst others,” said Leonard.
“This rebranding initiative coincides with the implementation of a corporate growth strategy which includes focusing on building a biosimilar portfolio of products starting with erythropoietin (EPO), which was co-developed with our partner PanGen Biotech, successfully registered in Malaysia, as well as in South Korea,” he added.
As part of its growth strategy, Duopharma Biotech will soon commence operations of a High Potent Active Pharmaceutical Ingredient (HAPI) facility producing oncology drugs for the Malaysian as well as regional markets.
“One of our key strategies is to ensure accessibility to much needed cancer and other drugs. We have identified strong and proven technologies and partners to collaborate in delivering these products to the patients,” Leonard further elaborated.
KUCHING: Malakoff Corporation Bhd’s (Malakoff) disposal of its stake in the MacArthur Wind Farm in Australia garnered neutral views from analysts as the loss from the disposal is minimal as the reduction in the selling price is small.
In a filing on Bursa Malaysia, Skyfirst Power Sdn Bhd, an indirect wholly-owned subsidiary of Malakoff, announced that it has disposed its entire issued and paid-up share capital of Malakoff Australia Pty Ltd and Wind MacArthur Holdings (T) Pty Ltd and all ordinary units of Wind MacArthur Holdings Trust to Megawatt Financing Pty Ltd and AMPCI MacArthur Wind (T) Pty Ltd.
The purchase price has been adjusted on the completion date from A$356.85 million to A$344.67 million due to the recent steepening of the three-month bank bill swap rate curve which resulted in higher long term fixed rate in Australia.
AmInvestment Bank Bhd’s research team (AmInvestment) commented: “We are neutral on the development as the reduction in the selling price is small. We estimate the gain on disposal to be RM511.4 million based on the revised selling price instead of RM546 million originally.
“Malakoff said that its cost of investment in MacArthur Wind Farm back in the financial year 2013 (FY13) was A$130.3 million.”
It opined: “We believe that Malakoff would be using the disposal proceeds of A$344.7 million (RM977.7 million) to repay borrowings. Malakoff’s gross borrowings stood at RM13.1 billion as at end-September 2019 compared with RM15.2 billion as at end-December 2018.”
It also believed that the loss of earnings from MacArthur Wind Farm would be fully covered by lower interest expense from the repayment of borrowings or higher interest income from the disposal proceeds and earnings contribution from the Shuaibah assets.
“Earnings shortfall would also be covered by the acquisition of a 97.4 per cent stake in Alam Flora Bhd,” it said.
It noted that Malakoff completed the acquisition of an additional 12 per cent stake in the Shuaibah assets in the Middle East in 3QFY19 while Malakoff completed the RM869 million acquisition of a 97.4 per cent stake in Alam Flora in early December 2019.
“Alam Flora is estimated to improve Malakoff’s net profit by 10 per cent on a full-year basis assuming everything else is the same,” it added.
All in, maintained its stock.
AmInvestment `buy’ call on the