We have realised our Pharmaniaga positions @ RM7.30/share each from the GROWTH and DIVIEND YIELD portfolios yesterday as it has exceeded our target price of RM6.95/share. With the disposal, we have made a superior profit of RM9,520 and RM8,160 within the 4.5-month investment horizon. Pharmaniaga’s share price had rallied 59.4% since we bought on 2-January at RM4.58/share.

At current market price, Pharmaniaga is trading at 18.3x and 16.8x FY15 and FY16 PER, which appears rich in contrast to its average net profit growth averaging of 7.5% per annum. Overall, we do not expect the group to receive a massive contribution from its newly awarded supply agreement with three teaching hospitals. Separately, we also concerned the group’s Pharmacy Information Systems, which expected to be rolled out nationwide somewhere between 2015 and 2016, could have a negative impact to its bottomline.

Source: Kenanga Research - 23 Apr 2015