Growing middle class = Growing health-conscious consumers By: William Kaharudin As health-conscious middle class rises, demand of healthcare products and medicines from reputable pharmaceutical companies are expected to increase. Since sickness and disease are inevitable, people will need to purchases medicines in order to recover. Given the backdrop, we see high opportunities for healthcare & pharmaceutical companies to grow. One of the healthcare & pharmaceutical-related stocks that should benefit from the changing environment is Tempo Scan Pacific (TSPC IJ). Established in 1953, TSPC is a company that manufactures and distributes healthcare, pharmaceutical, cosmetic, and consumer products. It has strong footprints operating in Indonesia for over 60 years. TSPC has become one of the market leaders in healthcare & pharmaceutical sector. There several award-winning flagship brands that are produced by TSPC such as Hemaviton, Bodrex, NEO Rheumacyl, Revlon, and Marina to name a few. Going forward, we think TSPC could improve its financial performance by strengthening its business portfolio through product innovation, production efficiency, and active sales & marketing strategies. We consider TSPC’s valuations to be highly compelling compared to its peers, such as Kalbe Farma (KLBF IJ), Industri Jamu dan Farmasi Sido Muncul (SIDO IJ), Kimia Farma (KAEF IJ), and Indofarma (INAF IJ). Currently, TSPC is trading at a forward P/E of 18.9x, which is relatively lower than its peer average (26.2x). Moreover, the company is also trading at a forward P/B of 3.1x, which is also lower than that of its peers (5.3x). It’s Return on Equity (ROE) also remained quite stable as it was stably range bound at 15-20% for the last 5 years. In our view, we would suggest investors to look into TSPC if they are looking for pharmaceutical exposures in Indonesia. owl.li/yITp1 #DailyFocus #Daewoo
Posted on: Thu, 03 Jul 2014 01:33:55 +0000
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