Brokers' Take

AsiaPharm Group, Sept 22 close : 65.5 cents

23 September 2004
The Business Times

DBS Vickers Research, Sept 22

The group announced that one of its key drugs for treating gastric ailments, Nuosen, has been listed as one of the approved drugs under China's 'National Health Insurance List'. Following this latest inclusion, the group will have seven drugs on the list, including its flagship Maitongna and upcoming star drug Lutingnuo. The inclusion of Nuosen on the list will result in better marketability of the drug and wider usage in hospitals, boosting sales. Lutingnuo's sales took off in a big way in 2004 with its earlier inclusion and we believe the same will occur for Nuosen as well.

Growth in the current year will come from its key products - Maitongna, Lutingnuo, Nuosen and Olai. The latest news have further raised the group's growth visibility as besides Maitongna, the group now has a few other fast-growing drugs to replicate the success of the flagship product. While we have factored in aggressive growth for Nuosen in our forecasts, there is a possibility of further sales upside from this latest inclusion.

Separately, the group has also obtained a manufacturing licence and drug certification for a new product, Meglumine Adenosine Cyclophosphate for Injection, from the SFDA. The drug is used in the treatment of heart disease and would be launched towards year-end.

We are maintaining our forecasts and BUY recommendation for now. Our price target of 70 cents is under review.

Compiled by KENNETH LIM