Hyphens Pharma International

Analysts are positive on Hyphens Pharma International given its good set of FY2021 earnings ended December 2021, its latest Novem acquisition, as well as the company obtaining Singapore’s first HSA-registered e-pharmacy licence.

The company reported earnings of $6.8 million for FY2021, up 11.1% y-o-y. Revenue in the same period was up 4.1% y-o-y to $125.9 million, with part of the growth from Novem, a distribution business acquired in December 2021 for $16.3 million.

SAC Capital analyst Lam Wang Kwan is upbeat on the stock as he has kept a “buy” rating with an unchanged target price of 40 cents.

Lam is impressed with its FY2021 results. For FY2022, Lam expects Novem to contribute about $13 million in sales and approximately $1.5 million to the bottom line for FY2022. “The amortisation of goodwill is expected to kick in from FY2023 onwards, offsetting the gain by approximately $1.2 million annually over the next 10 years,” writes Lam.

Elsewhere, in January, the company launched its e-pharmacy business WellAway, which opens up new business opportunities. Most recently, Hyphen Pharma’s subsidiary Docmed announced a partnership with SATA CommHealth to deliver a new primary healthcare system for migrant workers from April onwards. Under this partnership, WellAway will be providing its e-pharmacy services and medication delivery to the migrant worker patients following teleconsultation done by SATA CommHealth.

According to KGI Group Research analyst Megan Choo, Docmed’s collaboration with WellAway eliminates the need to manage a large inventory of medications and e-prescriptions are conveniently delivered to the masses.

Additionally, pharmaceutical group Servier Singapore, is working closely with WellAway to explore possibilities of healthcare digitalisation. “With this golden ticket of being Singapore’s first HSA-registered e-pharmacy, more collaboration and deals are expected to occur moving forward,” says Choo, who has an outperform call and 38 cents target price.

On the whole, Lam of SAC Capital expects Hyphens Pharma as a whole to grow its earnings for FY2022 by 24.4% on the back of revenue growth of 18.3% and 8% for FY2022 and FY2023 respectively. The return of elective surgeries as restrictions eased could further lift business sales, adds Lam. —

Price target:

KGI Group Research “outperform” 48 cents SAC Capital “buy” 40 cents

Novem acquisition to boost growth