印度医药行业分析报告.pdf
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1、Deutsche Bank Markets Research Asia India Health Care Industry India Pharmaceuticals Date 16 January 2012 Industry Update 2012 Outlook: Prospects continue to deteriorate; retain contrarian U/P Pipeline is monetised but not being renewed reducing future growth potential _ Deutsche Bank AG/Hong Kong A
2、ll prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche Bank does and seeks to do business with companies co
3、vered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE
4、 LOCATED IN APPENDIX 1. MICA(P) 146/04/2011. Abhay Shanbhag Research Analyst (+91) 22 6658 4035 Mayank Kankaria Research Associate (+91) 22 6658 4358 Top Picks Ranbaxy (RANB.BO),INR464.15 Sell Biocon (BION.BO),INR266.50 Sell Dr Reddys Labs (REDY.BO),INR1,655.55 Sell Aurobindo Pharma (ARBN.BO),INR1
5、07.30 Buy Companies Featured Ranbaxy (RANB.BO),INR464.15 Sell 2010A 2011E 2012E P/E (x) 96.945.334.4 EV/EBITDA (x) 11.715.210.2 Price/book (x) 4.453.503.00 Dr Reddys Labs (REDY.BO),INR1,655.55 Sell 2011A 2012E 2013E P/E (x) 22.922.320.6 EV/EBITDA (x) 16.614.912.7 Price/book (x) 5.924.944.17 Lupin (L
6、UPN.BO),INR428.95 Hold 2011A 2012E 2013E P/E (x) 20.821.319.2 EV/EBITDA (x) 15.614.813.1 Price/book (x) 5.654.784.01 Sun Pharma (SUN.BO),INR512.95 Hold 2011A 2012E 2013E P/E (x) 28.424.921.5 EV/EBITDA (x) 19.117.615.4 Price/book (x) 5.255.084.39 Aurobindo Pharma (ARBN.BO),INR107.30 Buy 2011A 2012E 2
7、013E P/E (x) 11.58.35.2 EV/EBITDA (x) 11.910.06.6 Price/book (x) 2.321.371.11 Events in 2011 indicate deteriorating outlook for global generics. Pipeline of one-offs is getting monetised, driving near-term profits, but is not being renewed reducing future growth potential. Teva admits that even diff
8、erentiated generics, the only long-term driver, do not create sustainable value. India Pharma has to catch-up with peers on driving growth through M Risks Despite, 19% fall in INR against USD benefitting this export focused sector, the latter O/P Sensex by only 16% in CY11. Similarly, 35% fall in IN
9、R in last 4 years, partly drove the 116% O/P. Similarly, its outperformance to US peers over CY11 timely launches of other high-potential one-offs ? Risks:Risks: Upsides from large one-offs in US growth ? Risks:Risks: Performance in US generics, outcome of Tarka litigation there has been a steep dec
10、line in approvals of new molecules (especially in new chemical entities, NCE) by the US FDA (Figure 2). Under the unified patent laws globally, the patent life for a molecule is 20 years. With average approval times of 10 years, we believe that the commercial life of a molecule is 10 years. With app
11、rovals for new molecules declining, patent expirations would be seem to be peaking in 2011-12 (Figure 3). Significant number of drug withdrawals in late 90s reduced new drug approvals from late 1990s Hence, patent expiries to peak in 2011-12 Significant number of drug withdrawals in late 90s reduced
12、 new drug approvals from late 1990s Hence, patent expiries to peak in 2011-12 473 Deutsche Bank 16 January 2012 Health Care India Pharmaceuticals Markets Research Page 8 Deutsche Bank AG/Hong Kong Figure 1: Increased drug withdrawals in late 90s Figure 2: resulted in lower approvals of new molecules
13、 0 1 2 3 4 19771980198319861989199219951998200120042007 Drugs withdrawn 0 10 20 30 40 50 60 0 15 30 45 60 75 90 105 120 135 199619971998199920002001200220032004200520062007200820092010 (USD bn) R we are worried as ? it is impossible to predict such events ? debtors and inventory for exports are 100
14、days each against 45 days each in India. Hence such events will mean significant write-offs (of debtors and inventory), if it happens ? Following any such event, companies stop exports to such market till they stabilize. Hence risks of one-time write-offs and weaker revenue growth in future. Figure
15、7: Europe Note: India generics include Cipla, DRL, Lupin, Ranbaxy and Sun. FY11 is year-ending Dec10 or Mar11 as also Sensex ? As seen in Figure 20, CY03 recorded a bull run for generic companies globally. Figure 20 also indicates that the profits of DRL and Ranbaxy (at that point the only tier-1 In
16、dian generics) plummeted in CY04 and CY05 (shown in CY03 and CY04 in RHS chart, which is 1-year forward data) due to the impact of one-offs fading away. ? We believe that these factors culminated in the sector trading at a premium to the market in the period CY03-CY05. Otherwise, the sector seems to
17、 have traded in line with local markets. ? The recent outperformance by India Pharma has increased the premia. Figure 20: Sector has traded largely in line with the market (Sensex), except in 2003-05 50 150 250 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-0
18、5 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Indian GenericsTeva MylanWatson Spike in stock price of generics globally - 5,000 10,000 15,000 20,000 25,000 30,000 0 5 10 15 20 25 30 35 Apr-01 Nov-01 Jun-02 Jan-03 Aug-03 Mar-04 Oct-04 May-05 Dec-05 Jul-06 Feb-07 Sep-07 Apr-08 Nov-08 Jun-09 Jan-10 Aug-1
19、0 Mar-11 Oct-11 Sensex P/E Pharma P/E Profits (DRL + Rbxy, RHS) Source: Company, Bloomberg Finance LP, Deutsche Bank; Note: Chart for RHS indicates 1year forward data for PE as also profits With deteriorating outlook over medium-long term, this premium is unwarranted As indicated in earlier sections
20、, ? continual pricing pressure across markets ? patent cliff in regulated markets (US, Europe Note: PE is on base business and excludes one-time drivers Risks Upside risks to our Underperform rating includes: ? Timely launch and better than expected upsides from one-offs ? Continual INR depreciation
21、 ? Value accretive acquisitions by India Pharma ? Pricing pressure for generics across markets (US, Europe, etc.) becoming lower than previously anticipated 493 Deutsche Bank 16 January 2012 Health Care India Pharmaceuticals Markets Research Page 28 Deutsche Bank AG/Hong Kong Aurobindo Pharma Outloo
22、k Aurobindos substantial investment phase in capex and product filings since CY02 coincided with weak prices in major product categories, constraining profitability. However it is now in a growth phase with a large maturing pipeline of approvals across markets and robust growth in supplies to Pfizer
23、. Markets seem to have over-reacted to poor 1HFY12 financials, which were marred by multiple and significantly adverse one- off events. While political turbulence in Hyderabad (where almost all its plants are based) has stopped, we expect the 2 units impacted by US FDA issues to be re- approved in 1
24、HCY12e. We project a CAGR in revenue of 16% coupled with improvement in market mix and product mix together with substantial operating leverage that could drive 16% and 9% CAGRs respectively in EBITDA and EPS over the next 3 years. Hence we expected positive free cashflow in FY13e. Net gearing shoul
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