Yesterday, CCMD announced that Leonard Ariff, the group’s Chief Executive Officer, has been elected to continue leading the group as Group Managing Director post demerger of CCMD from CCM, which is expected to be completed by the end of 2017. We are positive on the announcement as it finally answers qualms surrounding CCMD’s leadership in the lead up to its demerger from CCM. Equally important, with Leonard Ariff remaining at the helm of the group, it instils comfort in the group’s strategic direction towards its ambitions to evolve into ASEAN’s top 5 generic pharmaceutical company by 2022 with a focus on high value products in niche therapeutic areas. Maintain BUY with a TP of RM2.70/share based on 18.0x CY18 EPS.
Yesterday, CCMD Duopharma Biotech Bhd (CCMD) announced that Leonard Ariff bin Abdul Shatar, the group’s Chief Executive Officer, has been elected by the Board of Directors to continue leading the group as Group Managing Director post demerger of CCMD from Chemical Company of Malaysia Bhd (CCM) which is expected to be completed by the end of 2017. Concurrently, he will relinquish his role as CCM’s Group Managing Director to Nik Fazila binti Nik Mohamed Shihabuddin, CCM’s Chief Operating Officer cum Chief Financial Officer.
We are positive on the announcement as it finally answers qualms surrounding CCMD’s leadership in the lead up to its demerger from CCM. Equally important, with Leonard Ariff remaining at the helm of the group, it instils comfort in the group’s strategic direction towards its ambitions to evolve into ASEAN’s top 5 generic pharmaceutical company by 2022 with a focus on high value products in niche therapeutic areas such as cardiology, diabetes, renal and oncology.
Since assuming his current position in 2008, Leonard Ariff has been instrumental in carrying the group to greater heights. Of note, under his leadership CCMD forged strategic partnerships with global pharmaceuticals, PanGen Biotech Inc, Korea and Biocon Ltd, India, which today has resulted in the group possessing 2 of the largest biosimilars in Malaysia, erythropoietin and insulin, under its belt. On another note, apart from his current position, Leonard Ariff also holds directorship in PanGen Biotech Inc, Korea, acts in advisory capacity at the Industrial and Community Advisory panel of Institute for Research in Molecular Medicine at University Sains Malaysia and is a member of the Malaysian National Biotech Advisory Board.
Our TP for CCMD is maintained at RM2.70/share based on a target PE of 18.0x against CY18 EPS. Beyond potential for earnings growth and decent dividend yields, we like the group for the prospects from its venture into high value niche therapeutic products. Reiterate BUY.
Source: TA Research - 5 Dec 2017
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