Author Topic: AGP -- AGP Limited  (Read 69382 times)

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Offline Farzooq

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Re: AGP -- AGP Limited
« Reply #459 on: August 10, 2018, 03:26:58 PM »
AGP Limited : Earnings grow amid healthy topline; margins trimmed

Despite below expected earnings print in 2Q/1H18 (PKR1.02/2.42, +5/12% YoY) and not-so-encouraging margins, AGP Pakistan Ltd (AGP) has delivered on earnings growth.
The company’s product rollout plans look encouraging given planned product launches.
Meanwhile, new drug policy under National Essential Medicine List (NEML) addresses anomalies in the earlier classification and improves pricing formula for AGP as company’s ~70% of sales fall under the segment with better pricing.
Devaluation of the currency (17% since Dec’17) coupled with rise in API prices may, however, remain key challenges for the company, in our view.
Following a stellar price performance of 13% in 1-mth compared to sector performance of 7.3%, we believe below expected results and likely drag on margin may weigh on stock price. AGP trades at P/E of 19.3x on projected CY18E earnings or 18% premium to peers.
Below expected results delivered in 2Q: For 2Q18 AGP Limited (AGP) reported PAT of PKR284mn (EPS: PKR1.02) or +5%/-27% YoY/QoQ, taking 1H18 earnings to PKR676mn (EPS: PKR2.42), a 12% YoY rise. The rise in profitability has been a function of topline growth of 22% YoY to PKR 2.87bn as generics, exports and Mylan portfolio grew by 15%, 24% and 121%, respectively. Generics product portfolio reported the highest margins at 62% followed by exports with 58% GMs. Sequentially GMs improved by 759bps to 59.3% translating into 1H18 margins of 55.2% compared to 60.0% in the same period last year. The management attributed margin depression during the period to higher contribution of government orders in sales mix carrying margins as low as 17% (topline contribution: 13% in 1H18 vs 5% in 1H17). Moreover, selling & distribution expenses have risen by 33% during the quarter to form 23.5% of sales as the company prepares for push on Oncology drugs. With new drug launches in the pipeline, we expect distribution expenses to remain on the higher side. Effective tax rate may remain around 16% for the year as AGP benefits from listing and adjusts prior year losses from merger. 

New product launch ahead of plans: To recall, AGP had brought Mylan on board in 2017 as a partner to market Mylan products in Pakistan and Afghanistan. Having launched MyHep, a generic of Sovaldi, the company plans to enter into oncology segment where currently Roche enjoys monopoly. Targeting about six launches per year going forward, AGP has already launched seven products during the current calendar year including the breast cancer drug Hetrax from Mylan. Affordable cure from Mylan oncology portfolio shall help reach the untreated segment as reportedly 24k cases emerge every year of which 1k patients attain expensive treatment. On the other hand, investment to set up nutraceutical plant is under way, where land has been purchased for setting up the facility after getting rejected for plant erection at existing site. Currently under planning phase, the facility shall be operational within a time frame of 12-18mths.

Favorable changes drug pricing policy: The apex body, Drug Regulatory Authority of Pakistan (DRAP), had unveiled Drug Policy 2018 in Jun’18 that amended the prior policy mainly streamlining the classification of drugs along with revision of annual adjustments. The previous scheduled and unscheduled drug list has been revised as National Essential Medicine List (NEML) and all other drugs, respectively addressing anomalies in the earlier classification. Moreover, annual increments now stand at 70% of CPI (with a cap of 7%) for NEML drugs and 100% of CPI (with a cap 10%) for all other drugs from previous slabs of 50% of CPI (with a cap of 4%) and 70% of CPI (with a cap of 6%), respectively. AGP stands to benefit positively from the new policy whereby ~70% of its portfolio classifies as other drugs while remaining ~30% are NEML classified drugs enabling price increments equal to 100% of CPI on larger portion of the portfolio. To note, the new pricing can be implemented without prior approval of DRAP (a 30 day notice is however required), alleviating previous concerns on delays in implementation. Hardship cases have also been dealt with to revise the earlier fixed rate mechanism (at 8%) to a relatively flexible mechanism linked to various dosage forms incorporating factors of prime cost.

Cost escalation and depreciation remain our main concern: Drastic devaluation of the currency by 17% since Dec’17 coupled with rise in API prices for top products, due to rise in prices of intermediaries (APIs make up 46% of costs, Cefaclor and Cephalexin rose by 30%/10% during CY18TD), for top products shall compress margins further, in our view. While increase in prices as per policy can help partially offset cost increments, it may remain inadequate tapering off margins by up to 200bps on leading drugs from escalation in API prices alone. Moreover, our in-house expectation of further deval and margin stress on emerging oncology portfolio underpin the margin outlook for the company.

Valuation outlook: While we do not have active coverage on the scrip, AGP currently trades at a P/E of 19.3x on projected CY18E earnings, which is at 18% premium to sector average, amid above par margins relative to the sector average of 40% (ex-AGP). Following stellar price performance of 12.6% in the past one month compared to sector performance of 7.3%, we eye margin suppression to play out on the profitability to ultimately reflect on the price performance, in our view.

Key risks include: (i) rupee depreciation, (ii) larger quantum of low margin institutional orders, (iii) delay in planned product launches, and (iv) unprecedented rise in API prices.

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Re: AGP -- AGP Limited
« Reply #459 on: August 10, 2018, 03:26:58 PM »

Offline tariq54

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Re: AGP -- AGP Limited
« Reply #460 on: August 11, 2018, 11:43:15 AM »
AGP & FEROZ upper lock yesterday, all pharma sector in bullish trend any good news ?

Offline Aahaf

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Re: AGP -- AGP Limited
« Reply #461 on: August 27, 2018, 01:28:45 AM »
Maal hi ghayab hai :o

Offline Aahaf

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Re: AGP -- AGP Limited
« Reply #462 on: August 27, 2018, 01:34:37 AM »
Last -500 ki mkt main bhi 95 nahi tora :skeptic:

Offline tariq54

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Re: AGP -- AGP Limited
« Reply #463 on: September 04, 2018, 08:05:48 PM »
Looks attractive at current level

Offline hizohaib3

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Re: AGP -- AGP Limited
« Reply #464 on: February 02, 2019, 02:03:16 PM »
bought agp at 90

Offline omermalik

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Re: AGP -- AGP Limited
« Reply #465 on: February 03, 2019, 08:10:00 PM »
Yar pharmaceutical itnya benifits dya government nay pher bhe agp 85 say 90 pa stuck ha :(

Offline optimistic

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Re: AGP -- AGP Limited
« Reply #466 on: February 03, 2019, 09:53:03 PM »
Yar pharmaceutical itnya benifits dya government nay pher bhe agp 85 say 90 pa stuck ha :(

Pharma sub chalay ha boom boom close to 3Qtr Results March end.
TOP Scripts as below: Updated (28th Sept, 2019)
1. Feroz, 2. Hinoon, 3. Akzo, 4. Mughal, 5. DCR, 6. APL, 7. CPPL, 8. Engro Corp, 9. Hubco, 10. Searl. 11. TRIPF. 12. Sanofi Aventis.

I am not perfect. Please do your own research my comments / or views may not prove accurate, nor i advise anyone to act upon on my recommendations, nor i accept any responsibility on me. Your money, your gain / or loss, before investing into any script better you gain sufficient knowledge of business and calculate risk accordingly as per your risk appetite.

Offline tariq54

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Re: AGP -- AGP Limited
« Reply #467 on: March 01, 2019, 07:18:25 PM »
Board Meeting will be held on March, 05, 2019 for Annual Result.
Any expectation for dividend or bonus ?

https://formerweb.psx.com.pk/newsattachment/126408.pdf

Offline optimistic

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Re: AGP -- AGP Limited
« Reply #468 on: August 07, 2019, 01:28:47 AM »
Good result AGP with interim cash dividend
Sale are up
GP are up
TOP Scripts as below: Updated (28th Sept, 2019)
1. Feroz, 2. Hinoon, 3. Akzo, 4. Mughal, 5. DCR, 6. APL, 7. CPPL, 8. Engro Corp, 9. Hubco, 10. Searl. 11. TRIPF. 12. Sanofi Aventis.

I am not perfect. Please do your own research my comments / or views may not prove accurate, nor i advise anyone to act upon on my recommendations, nor i accept any responsibility on me. Your money, your gain / or loss, before investing into any script better you gain sufficient knowledge of business and calculate risk accordingly as per your risk appetite.

Offline aatradekhi

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Re: AGP -- AGP Limited
« Reply #469 on: October 30, 2019, 11:33:45 AM »
Financial Announcements
AGP Limited. Nine Month Results Sep 2019
EPS 3Q = Rs 1.15
EPS Uptill 9M = Rs 3.80
9M Growth(SCS) = 12%
Last 9M EPS = Rs 3.40

Offline aatradekhi

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Re: AGP -- AGP Limited
« Reply #470 on: October 30, 2019, 12:49:24 PM »

Offline tariq54

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Re: AGP -- AGP Limited
« Reply #471 on: November 14, 2019, 01:44:52 AM »
saray pharma bhag rahay hai, yeh wahey ruka hai ?  :@ :@ :@

Offline Aahaf

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Re: AGP -- AGP Limited
« Reply #472 on: November 14, 2019, 02:19:32 AM »
Rallied from 51

Offline tariq54

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Re: AGP -- AGP Limited
« Reply #473 on: November 14, 2019, 02:41:06 AM »
Rallied from 51
means in overbought zone, thanks Aahaf Bhai

Offline Aahaf

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Re: AGP -- AGP Limited
« Reply #474 on: November 14, 2019, 02:44:04 AM »
My pleasure, in comparison i prefer tgl at these rates

Offline Aahaf

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Re: AGP -- AGP Limited
« Reply #475 on: November 14, 2019, 02:53:47 AM »
For tomorrow shell can also perform intra day support 162