Beximco Pharma Discussion Threads

[winnings1] 16/3/2021 08:59

Would it not be more likely that BXP makes a takeover move. BXP is
a very succesful enterprise, capaable of making a takeover bid for
even a larger fish.

[outsizeclothes.com] 15/3/2021 23:50

I honestly can't see an Indian Co. making a move: - too much historical cultural clash between the two countries.
Possibly Chinese, but again, would the Bangladeshi Govt. want such a move ?
Square definitely have the firepower for a takeover, but again, would the Govt. want this, or are they happy that the presence of BXP and Renata stops Square becoming a 'monopoly', esp. in the domestic market where BXP is so relatively strong?
I totally agree that Western firms wouldn't be interested. Sanofi proved the point.

[toadhall1] 12/3/2021 11:59

BXP is close to overtaking Renata, and is looking slightly cheaper based on P/E. Expecting £41mm PAT based on H1x2.

hxxps://www.dsebd.org/displayCompany.php?name=RENATA

Square is by far the market leader, but only growing at 8% a year. But expecting PAT of £130mm (H1x2) vs BXP £38MM (on my estimate) (excl vaccine impact).

hxxps://www.dhakatribune.com/business/2021/01/29/quietly-square-pharma-consolidates-its-position-as-bangladesh-s-no-1-drug-maker

[toadhall1] 12/3/2021 11:43

It’s a good point. BXP has very close links with the govt. Which of course has been to its advantage eg the vaccine deal, Sanofi Bangladesh acquisition (of which govt is a remaining 25% holder). There could still be a takeover from Square Pharmaceuticals worried about the competitive advance of BXP, or from Renata. There could be a merger between BXP and one of these companies.

Alternatively perhaps a Chinese takeover. I don’t see Western companies making a move. Perhaps India given the good relations over vaccine supply.

[toadhall1] 12/3/2021 09:38

Agree.

When I was discussing fundamentals over on LSE, it seems that the most popular game is trading the historic 40-45% discount to main listing. As a result, it remains relatively well pegged given so many people trade it that way, vs a lack of fundamentals investors.

So the point is, yes as main listing moves up with earnings, GDR will for sure follow. The discount automatically factors in the current FX.

Personally I’m after the value, the growth and the terminal value ie one day it may be taken over and the discount will eliminate.

[cb7] 12/3/2021 07:19

You are right, my eps in my notebook were based on taka rates at the time of rns. Sterling strength these past few months is a real issue and personally I think its way overdone. My thoughts were that growth of 20%+ pa as you highlight, will offset any sterling strength.
The main listing is Bangladesh and results in taka will clearly look very good. I do not know if our price simply follows their lead, if it does then all the better.

[toadhall1] 11/3/2021 15:27

Yep my EPS numbers are conservative, but based on H1 PAT x2, and using new share count for comparison purposes yoy.

Your Q1 looks a bit high. I saw BDT 1,084,341k for Q1, FX 117, shares 405,556,000 gives 2.3eps.

The share dilution is just annoying but is not real, given it was scrip rather than an equity issue. So I like what the company does where they restate the prior periods EPS for the new share count.

I don’t think we’ll see GBP strengthen too much more from here hopefully. But underlying business is clearly growing at least 20% earnings increase yoy.

[cb7] 11/3/2021 14:51

Yes the taka has weakened which will hit them in pound terms, almost 118 this morning. Q1 had 2.65 and q2 2.54p eps, hence my simplified 10 for the year -- H2 is usually a little stronger and also the share dilution only took place in mid jan, so will only impact 5.5 months rather than the whole year.

[toadhall1] 11/3/2021 11:51

Your numbers seem a bit high. I’m forecasting 9.98 Taka per share ~ 8.5p eps based on 117 FX and assuming 446.112mm shares for full year (rather than average).

Last year, PAT was BDT 3,544.5mm , giving adjusted EPS of 7.95 Taka per share and 6.7p per share ( assuming nee share count and 117 FX for comparison).

That would give the 26% EPS growth yoy (ignoring FX and share count increases).

That’s consistent with the 5% average growth in PAT per quarter (averaging back even as far as Q1 ending Sept 18).

Hence I see 20% earnings growth yoy as very achievable, and can be used as the growth number in PEG calculations.

And that is excluding any uplift from new vaccine revenue.

[cb7] 11/3/2021 10:49

My expectations for this year were around 10p eps excluding the uplift from vaccine distribution. Normally, my understanding of any "significant" or "material" alteration to earnings should mean at least a 10% variation to earnings. On that basis I was pencilling in 11.5 eps and of course hoping for a little bit more. Any thoughts anybody?

[toadhall1] 11/3/2021 09:26

What is interesting in the vice chairman interview is that the govt has paid for all the doses (half in Dec and remaining half on approval). So the revenue for those is secured. I’m just suggesting that it might be realised over a slightly longer timeframe than all in H2 of this year.

[toadhall1] 11/3/2021 09:14

This article suggests Bangladesh has 3 warehouses available for 10mm doses. So if they want to keep receiving 5mm doses a month they’re going to need to find more storage capacity given the slow rollout, or else delay delivery from SII.

hxxps://www.dhakatribune.com/bangladesh/2021/01/25/5m-covid-19-vaccine-doses-arrive

[winnings1] 11/3/2021 09:13

I would seem to me most likely that the 2 millian doses gifted by
the India Government would be gifted to the Bangladesh Government
rather than any private entity. Thus Beximco is in this case also
the likely national distributor. The vaccine made in Inda (by the
world's largest vaccine manufacturer)is the Oxford/AZvaccine -
produced under licence from AZ.

[toadhall1] 11/3/2021 09:04

The key point is that it is a fluid situation.

This is a good article to read which I posted on LSE a while back. Gives good insight into the process and BXP role is.

hxxps://www.dhakatribune.com/bangladesh/2021/01/25/how-did-bangladesh-get-covid-19-vaccine-so-quickly

[cb7] 11/3/2021 07:23

Are the free ones from the Indian Govt of the AZN type?
Unlikely to set up a different distributor just for those and also BXP are acting for the Bang. Govt not for SII.
I will trust the RNS from the company, rather than unfounded speculation.

[toadhall1] 11/3/2021 00:44

They will only be the intermediary for the Oxford vaccine bought from SII. They wouldn’t have intermediated for the 2mm doses from India govt for example. Nor any doses that are distributed by other organisations like Covax.

[toadhall1] 11/3/2021 00:44

They will only be the intermediary for the Oxford vaccine bought from SII. They wouldn’t have intermediated for the 2mm doses from India govt for example. Nor any doses that are distributed by other organisations like Covax.

[winnings1] 10/3/2021 18:13

Toadhall - Is it not the case that Beximco has been appointed by the
Bangladesh Government to be the sole distributor of the Oxford-AZ Covid
vaccine for the whole of Bangladesh, wherever the vaccine comes from?
P.S. I entirely agree that Beximco shares are cheap enough even without
the vaccine story.

[toadhall1] 10/3/2021 15:02

That is true. However I just think that due to the slower than expected pace of vaccines given, that it may impact on the volumes distributed by BXP. Bangladesh is at about 3mm vaccines given, whereas SII delivery to BXP was expected to be 5mm a month. Additionally India gave Bangladesh 2mm doses for free. Also Bangladesh can now also receive doses via the WHO programme.

This could mean the likelihood of getting batches for private market are higher.

Notwithstanding this, I’m looking forward to the Q3 results, hoping for another 5% increase in PAT qoq for a 20% annualised increase. Even without vaccine revenue, this is looking like a cheap share with PEG less than 1 if this growth can be maintained.

[cb7] 10/3/2021 14:00

the statement on 4/2 said that despite not getting the vaccine for private use, they still anticipated a material improvement to earnings...

[toadhall1] 10/3/2021 13:58

Yes Bangladesh rollout has been slow. However, i think this means it will spread out incremental earnings over a longer period, which is a good thing. In the future with additional strains, new vaccines will be required which I suspect will lead to more activity in the private market as things settle down. I assume we would still distribute variants of the Oxford vaccine which target new strains.

[winnings1] 10/3/2021 13:27

Outsize - Surely we can hold on till next quarter.

[outsizeclothes.com] 10/3/2021 11:03

Govt distribution of the vaccine isn't going to make any significant profits accordingly - it's the "private" sector, non-public vaccines that will be the profit kicker - IF we can get them.
Which, to be honest, looks unlikely this quarter.