Hovid benefits from dollar gain

STRONG EXPORT GROWTH: It remains CIMB Research’s top pick for its exposure to local healthcare sector

HOVID Bhd is a beneficiary of the weak ringgit because half of its revenue is derived from export sales, which are predominantly quoted in US dollar, CIMB Research said in a report.
As such, the research house said, Hovid remains its top pick for the company's exposure to the Malaysian healthcare sector.
CIMB advised investors to add Hovid shares, and the research firm has set a 43 sen price target for the stock.
"Potential re-rating catalysts are increased product registrations in its export markets and stronger second-half earnings," CIMB Research said in the report.
It said increased registrations of Hovid's drugs in its export markets will spur demand and this will help widen its profit margin and lead to higher profitability.
CIMB Research said Hovid's strong long-term earnings growth prospects are good in the pharmaceutical market in Malaysia.
Its key export destinations are set to grow at double-digit rates, driven by ageing populations and greater access to healthcare services and medicines.

 

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