Today, we feature a note on Kotra Industries Berhad (KOTRA) in our FundTech Radar – 11th June 2019. KOTRA is engaged in research and development, manufacturing and trading of pharmaceutical (e.g. generic drugs) and healthcare products. It offers tablets, capsules, creams, and ointments under the brand name Appeton, Axcel, and Vaxcel. In FY18, KOTRA’s exports constituted approximately 40.5% of its total revenue.
· A strong 3-year (FY16-18) sales and core PATAMI CAGR of 7.1% and 139.3% respectively.
· FY18 core PATAMI margin rose to 8.8% (vs. 7.5% in FY17).
· Net gearing ratio fell to 0.14x as at 31 March 2019 from 0.24x as at 30 June 2018.
· Its FY18 div. yield rose to approximately 2.1% (vs. 1.1% in FY17).
· KOTRA may see positive demand from all business segments given the increased allocation for health services to RM29bn in the Budget 2019 announcement.
· Strengthening of the US Dollar against Ringgit may have a positive impact on its business.
· Currently trading at a 12-month trailing P/E of 11.8x, which is a 22.8% discount to its domestic peers average P/E of 15.3x.
Uptrend remains intact but trading volume is fairly low.
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
11 June 2019
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