Egypt is the MEA region’s largest producer and second largest consumer of pharmaceuticals, growing at a CAGR of 17% over 2013a-2020a, surpassing the region’s CAGR of 8%. Despite pressure during the past couple of years because of the pandemic, we forecast total pharma market to grow at a 6-year CAGR of 13.2% between 2021e -26f. During 2022f, we expect the retail pharma market to record sales of EGP95.2 billion (+10.1% YoY), while non-retail pharma sales record EGP48.0 billion (+13.4% YoY), br...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Egypt is the MEA region’s largest producer and second-largest consumer of pharmaceuticals, growing by a CAGR (2013-2019) of 19%, surpassing the region’s CAGR of 8%. Market growth is predominantly driven by out of the pocket expenditure (61% of total health expenditure), alongside a heavily growing population by c.2% per annum. Yet, Egypt still exhibits one of the lowest pharma expenditure per capita figures in the MENA region, implying vast room for future growth. We forecast the total pharma...
Healthcare coverage 3Q20e earnings set to rebound; Pharma players to lag. We look for a q-o-q rebound in revenues and earnings for our healthcare coverage, chiefly underpinned by a hike in traffic, following the ease of mobility restrictions, and a slowdown in COVID-19 cases in 3Q20. Pent-up demand is seen as coming more in favour of healthcare services providers, with earnings growing on average by 11% (excluding SPMD). Conversely, pharma players are seen delivering muted earnings growth (exclu...
AXPH recorded EGP159 million in revenues in 4Q18/19, +31% YoY, but 25% down QoQ. With no recent price-hike announcements by the Ministry of Health (MoH) in the last quarter, QoQ topline drop is attributable to lack of volume growth. We reported earlier that management planned to introduce 5 new drugs in FY18/19 to its current portfolio. Therefore, we believe annual topline improvement came on the back of increased volumes.
Alexandria Pharma (AXPH) recorded EGP213 mn in revenues in 3Q18/19, +3% YoY, but 12% down QoQ. With no recent price-hike announcements by the Ministry of Health (MoH), we believe topline performance is attributable to volumes. On the back of 46 drugs sold at a loss in FY18/19, we believe management could have curbed production volumes for these drugs to limit their impact on margins; hence the sequential drop in volumes. On the other hand, YoY volume growth is assumed to be a result of the intro...
Volume-driven growth drives topline performance: Alexandria Pharma (AXPH) witnessed revenue increase by 14% YoY and 12% QoQ in 2Q18/19. We note that topline growth is volume-driven, whether from existing SKU or through the introduction of new SKU’s since the Ministry of Health (MoH) has not initiated any price changes in the past quarter. We believe AXPH’s revenues would be significantly boosted if the Ministry of Public Enterprises’ enacted the agreement with the Ministry of Health to rep...
Global pressures pose risk to short-term outlook. Higher oil prices and global financial pressures encourage a conservative shift in fiscal and monetary policies. Our base case assumes an average 55% fuel subsidy cut in July, along with a 1% hike in policy rates in 3Q18. Based on the government’s budget for an oil price of USD67/bbl (vs. USD76 spot), and the USD:EGP rate of 17.25 for FY18/19, we calculate a combined EGP5bn increase in costs for each USD1 increase in Brent and 1% depreciation in ...
Cheap plays in a high growth market. Generics control c33% of Egypt’s pharma market, and due to the country’s low drug purchasing power (cUSD30 per capita in 2017), we expect this segment to outpace broader market growth (at a 2017-2021 CAGR of 23%, reaching 43% of the market by 2021). Expectations that the Ministry of Health will opt for gradual price deregulation also allow for superior growth. The MoH most recently approved price hikes in May 2016 (20% for all drugs priced less than EGP30/uni...
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