Richter Gedeon - Vraylar couldn’t save the day either - Instant Earnings Comment from Concorde Securities Ltd.
Gedeon Richter - Instant Earnings Comment
Rating: Accumulate (unch.)
Target price (12-month): HUF 6,264 (unch.)
Current share price: HUF 5,500
Key points for 2018 Q3 results:
- Total revenues were HUF 99.4 bln (-7% YoY in HUF) lower than cons. estimate of HUF 101 bn and our estimate of HUF 104.3 bln.
- Richter received a one-off income of HUF 2.2 bln from Allergan for the successful clinical trial of cariprazine in the indication of bipolar depression and the label extension of Vraylar submitted by Allergan to the FDA
- EBIT amounted HUF 13.7 bln, down 33% YoY. Consequently, clean EBIT margin came in at 13.7% in Q3/18 vs. 19.2% in Q3/17, and thus 100 bps below the median of analysts’ expectations of 14.7%.
Chemical Works of Richter Gedeon is a multinational pharmaceutical company that is engaged in the research, development, production and marketing and trade of pharmaceutical products. Co.'s activities are divided into two major business segments: Pharmaceutical, including research, development and manufacturing of pharmaceutical products; and Wholesale and Retail including wholesale and retail trade through the distribution chain as well as marketing of its products. Co. is primarily engaged in production of gynecological, cardiovascular and gastroenterological products, antibiotics, antimicotics, OTC and medicines for treatment of the central nervous system.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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