KUALA LUMPUR (July 16): With the looming retirement of Duopharma Biotech Bhd’s (KL:DPHARMA) top official, CGS International expects current operations head Wan Amir-Jeffery Wan Abdul Majid to be promoted to chief executive.
Wan Amir-Jeffery, who has more than two decades of experience and has been with the company since 2016, would likely maintain the company’s mid-term plans, the research house said. Duopharma’s current managing director, Leonard Ariff Abdul Shatar, is set to retire by the end of 2025.
“Despite upcoming management changes, we do not expect major changes to its long-term growth plans on pipeline products and capacity expansion,” CGS International said.
Among others, Duopharma has to finalise the pipeline of products for its upcoming K5 plant, optimise its existing Bangi and Klang facilities, put in new production lines at its K2 sterile facility, and work out products for K1 when existing products are moved to K3.
Leonard Ariff, who turns 61 this year, told The Edge in the March 24-30, 2025 weekly issue that he will not pursue an extension of his term. Duopharma is also looking for a successor to chief financial officer Chek Wu Kong, who will retire at the end of January next year.
Duopharma's share price has gained more than 15% so far this year as investors cheered a strong first quarter. A 13% appreciation in the Malaysian ringgit against the US dollar since April lows and lower active pharmaceutical ingredients will also help to boost margins.
Despite the recent rally, the stock still offers value, trading at 13 times its forward earnings and below its historical mean, CGS International said. The house raised its target price to RM1.74 and reiterated its ‘add’ call.
At the new target price, Duopharma would be trading at 17 times its 2026 earnings, which “we believe is justifiable given its stronger-than-peers earnings growth and sticky public sector revenue”, the house added.
The consensus, meanwhile, is unanimously bullish, with all five analysts covering Duopharma rating the stock ‘buy’. The average 12-month target price is RM1.68, according to Bloomberg, implying a potential upside of up to 18% from the current price.
At the noon break, Duopharma shares settled at RM1.41, giving the company a market capitalisation of RM1.4 billion.