High COVID-19 cases pushing down pharmaceutical, surgical demand - AmInvestment

KUALA LUMPUR: The resurgence in COVID-19 cases globally is pushing down global clinical pharmaceutical and surgical demand, said AmInvestment Bank.

In a research note today, AmInvestment said the current scenario has impacted local pharma players, including Apex Healthcare Bhd, noting that the company's net profit for the first quarter of financial year 2021 ended March 31, 2021 (Q1 FY21) of RM11.9 million came in below expectations.

"This was attributed to poor local pharmaceutical demand and export sales.

"Additionally, weaker demand for prosthetics and surgical equipment has likewise impacted STRAITS, the group's contract-manufacturing arm," it said.

As such, the research house had lowered its estimated earnings forecast for the company by 17 per cent for FY21.

"Going forward, recovery prospects in the second half of 2021 are dampened, as the high number of COVID-19 cases are pushing down global clinical pharmaceutical and surgical demand.

"However, we are still optimistic of a solid FY22 earnings forecast, predicated on a more stable recovery in patient volumes as the effects of the vaccination process finally begin to take place," it said.

As such, AmInvestment Bank has maintained its "buy" call on Apex's shares with a fair value of RM3.33 per share.

At noon, Apex Healthcare's shares price fell six sen to RM2.84, with 51,600 shares transacted.

-- BERNAMA