Pharma price revisions raise TP by c30%, reiterate Overweight
MoH hikes pharma prices. 3k products (c15% of local products in the market, c20% of imported products) were re-priced upwards by the Ministry of Health (MoH) on 12 Jan-17 by 30%-50%, depending on the retail price point, with immediate effect on any new production. EIPICO’s portfolio saw 97 products, generating c80% of local revenue, all re-priced upwards by 50%. We raise our TP by c30% to EGP120/share on 40% and 43% higher EBITDA and earnings over 2017-21e, respectively. We expect the stock to rerate narrowing the valuation gap (2017e P/E of 10x vs. peers’ 20x). The decision signals government intention to encourage pharma sector investment, at the expense of price inflation.
Co. is principally engaged in the manufacture and distribution of pharmaceutical products locally and for export. Co. currently has 196 products including analgesic, anthelmintics, antibiotics, anticatarrhal, antidepressant, antidysentrics & enterostatics, antihistaminic, cardiasc and vascularetics, cathartics, dermatological, endocrine system drugs, gastrointestinal, general anaesthetic, glucocorticoid, ophthalmic, orodentals, parasympathomimetic, pulmonics, skeletal muscle relaxants, spasmolytics, treatment of grout, urologic, vaginetics, vitamins and miscellaneous.
CI Capital is a diversified financial services group and Egypt’s leading provider of leasing, microfinance, and investment banking products and services.
Through its headquarters in Cairo and presence in New York and Dubai, CI Capital offers a wide range of financial solutions to a diversified client base that include global and regional institutions and family offices, large corporates, SMEs, and high net worth and individual investors.
CI Capital leverages its full-fledged investment banking platform to provide market leading capital raising and M&A advisory, asset management, securities brokerage, custody and research. Through its subsidiary Corplease, CI Capital offers comprehensive leasing solutions, including finance and operating leases, and sale and leaseback, serving a wide range of corporate clients and SMEs. In addition, CI Capital offers microfinance lending through Egypt’s first licensed MFI, Reefy.
The Group has over 1,700 employees, led by a team of professionals who are among the most experienced in the industry, with complementary backgrounds and skill sets and a deep understanding of local market dynamics.
CI Capital has been recognized as the “Best Investment Bank in Egypt” by EMEA Finance for four years running from 2013-2016, and by Global Finance in 2014 and 2015.
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