Topline Securities Limited - Searle (SEARL) Topline Flash Note: The Searle Company (SEARL): Corporate Briefing Notes

Report

Topline Securities Limited

Sunny Kummar

EUR 30.00 For Business Accounts Only

Topline Flash Note: The Searle Company (SEARL): Corporate Briefing Notes

The Searle Company (SEARL) is the second largest pharmaceutical company in Pakistan. It is No.1 in Cardiovascular, Pain Management, Gynae and Obs and Cough Suppressant segments. The company has 4 over Rs1bn and 7 over Rs500mn brands in its portfolio. There are over 650,000 prescriptions with SEARL products prescribed by doctors every day.
The company is ranked second in terms of volume with a market share of 7.04% and fourth in terms of value with a market share of 5.79%.
The company has 11% contribution from exports in its overall sales. The company has presence in 15 export markets, with 7 future markets.
The company has a toll arrangement with AstraZeneca and no marketing arrangement. There is no link as such for SEARL to be able sell AstraZeneca vaccine in Pakistan. SEARL has no plans to launch a vaccine at the moment.
Sales of Decadron has increased due to COVID-19 with sales again increasing because of the recent hike in COVID-19 cases.
Sales has not had a major impact because of COIVD-19, while some of the advertising costs have come down due to lockdown/restrictions. There has been no disruption in sourcing API due to COVID-19.
The company has taken price increase as per the policy from Oct-2020, and the products with new prices have gone into production. Pricing of Hydryllin, Peditral and two other products are in court, and the company cannot take a price increase like other products.
The acquisition of OBS was completed in Aug-2020, and the complete impact of OBS will reflect from next quarter.
Approval of manufacturing facility at Port Qasim has been received.
OBS sales at the time of acquisition was around Rs5bn and it had a loss of Rs500mn. OBS average gross margins are at 43%.

The company has booked a Rs9bn intangible goodwill on OBS transaction, which will help the company to get tax benefits in the future.

25/11/2020 2 EN

Underlying

Searle

The Searle Company Limited is a holding company, which is principally engaged in the manufacture of pharmaceutical products and other consumer products. In addition, the Company is engaged in sale of food and consumer products, and manufacture of pharmaceutical products for other companies. The Company operates through three segments: Pharma, Consumer and Investment property. The Company's geographical segments include Pakistan, South Asia, East Africa, South-East Asia and Middle East. The Company's portfolio includes three divisions: Pharma, Consumer Health and Nutrition. Its products include Selanz SR, Levoxin, Lomotil, Xaroban, Vitrum, Rhulef, Canderel, Peditral, Ezium, Hydryllin, Xadine, Zenbar, Extor, Adronil, Nuberol/Nuberol Forte and Byscard. The Company has pharmaceutical range across therapeutic areas, such as cardiovascular, respiratory care, gastroenterology, pain management, orthocare, neuropsychiatry, probiotics, antibiotics and nutritional care.

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PK0061701014 Pakistan Stock Exchange Pakistan

Provider

Topline Securities Limited

Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.

Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.

Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.

JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).

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Analysts

Sunny Kummar

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