KUALA LUMPUR (April 7): Pharmaniaga Bhd (KL:PHARMA) has proposed to consolidate every five shares held by its shareholders into one share to strengthen its capital structure after completing its regularisation plan and exiting its financially distressed status.

Based on its closing price of 24.5 sen on March 31, the pharmaceutical company said the price could theoretically be adjusted to RM1.225 post-consolidation, according to its filing with Bursa Malaysia. 

Upon completion of the exercise, its share base will shrink from 6.56 billion shares to 1.31 billion shares (for a share capital of RM243.43 million) under the minimum scenario, or to 1.32 billion shares (for a share capital of RM267.47 million) under the maximum scenario.

The proposed exercise comes after the group exited Practice Note 17 (PN17) status in mid-March, following the completion of a RM520 million capital reduction and fundraising exercises comprising a rights issue and private placement. 

The proposal is subject to Bursa Securities’ approval and shareholders’ consent at an upcoming extraordinary general meeting, with completion targeted by the second quarter of 2026. Affin Hwang Investment Bank is the principal adviser for the exercise.

Pharmaniaga has remained profitable for two consecutive years, with a net profit of RM48.51 million for the financial year ended Dec 31, 2025 (FY2025), though 63% lower against RM131.8 million in FY2024, which was lifted by a one-off RM124.9 million waiver relating to penalties on late deliveries during the pandemic. 

Revenue for FY2025, however, rose 8.1% to RM3.93 billion from RM3.76 billion in FY2024, driven by stronger demand in the concession segment, supported by the inclusion of new products in the approved purchase list.

Having risen more than 116% over the past 12 months, Pharmaniaga’s shares were last traded at 26 sen at Tuesday’s noon break, valuing the company at RM1.67 billion.

Pharmaniaga is trading at a trailing price-earnings ratio of 35.1 times, a premium to its closest peer Duopharma Biotech Bhd (KL:DPHARMA), which is valued at 13.9 times, according to AskEdge data.