Hovi

It posted a rm48.1 million and rm6 million for its 2QFY2015’s (second quarter ended Dec 2014) revenue and pre tax profit mainly due driven by higher sales and foreign exchange gain arising from the favorable USD against the USD.

This brings year to date (YTD) first half FY2015 revenue to rm97.1 million and pre tax profit to rm13.7 million.

Its prospects are predicated on new products launches, rising demand for pharmaceutical products and the increased registrations of new products in its export markets. Amplifying the positive outlook and prospects for Hovid are the growing world pharmaceutical market, underlying demographic and age trends coupled with a rise in chronic diseases which is supportive of long term industry growth.

Secondly in the next several years, which will be an exciting for generic drug makers as patented drugs worth USD133 billion in annual sales currently (May 2015) will expire, commonly referred to as the patent cliff.

This enables Hovid to launch the generic versions of these drugs and expand sales. In addition, growing healthcare spending in key markets – Malaysia and other lower middle income economies – will provide further growth prospects as healthcare bills in these countries are low by international standards and the rising affluence and improved access to healthcare services will fuel greater demand for drugs.

It is building a new plant to ease capacity constraints for its tablets and capsules. The first phase of the new plant is expected to be ready and operational by mid calendar year 2015 to produce tablets and capsules and boost capacity by 30%. The capsules and tablets make up approximately 65% of its revenue, syrups and softgels make up 15% and the balance is contributed by other products. The second phase of the new plant is slated for commercial population in 1HCY2016.

The total capex incurred of rm40 million to be spread over FY2015 till FY2017 and will be only a small dent in Hovid’s net cash of rm15.6 million as at Dec 31 2014. The first phase of expansion is expected to increase its capacity and revenue by 30% or approximately rm30 million.