Hyphens Pharma International - SAC Capital 2023-08-17: Navigating Challenges Amidst Ongoing Improvements

• Hyphens Pharma International (SGX:1J5)'s 1H23 revenue/net profit is in line with our projections, coming in at 51%/42% of our full-year forecast.
  • Specialty Pharma Principals (SPP) 1H23 revenue experienced a drop of 12.9% y-o-y (- 27% y-o-y in 1Q23, 0% y-o-y in 2Q23) to S$42.0m on the back of
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    2. shipping delays for specific products; and
    3. the absence of one-off tender awarded to Novem in 1H2022.
  • Proprietary Brands (PB) 1H23 revenue rose 9.1% y-o-y to S$11.8m (+16% y-o-y in 1Q23, 3% y-o-y in 2Q23) fuelled by greater demand for Ceradan dermatological products and Ocean Health supplements.
  • Medical Hypermart and Digital 1H23 revenue declined 3.5% y-o-y to S$20.9m.
• Despite the challenges Hyphens Pharma faced which caused 1Q23 revenue to plunge by 15.2%, 2Q23 revenue came in at S$41.5m (+0% y-o-y, +24.8% q-o-q) buoyed by more tenders won by Novem and higher sales coming from SPP and P/B. 2Q23 gross margins dipped 2.7pp y-o-y/3.5pp q-o-q to 35.9% and net profit stood at S$2.2m (-28.1% y-o-y, +55.6% q-o-q).

Special dividend

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Richer portfolio.

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Yeo Peng Joon SAC Capital Research | Matthias Chan SAC Capital | https://www.saccapital.com.sg/ 2023-08-17 SGinvestors.io

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