Fundamental Analysis on Islami Bank Bangladesh

PAMC Research

SQUARE PHARMACEUTICALS LIMITED
Recommendation: BUY KEY POINTS SUMMARY
Square Pharmaceuticals Ltd. (SPL), the flagship company of Square Group, is holding the strong leadership position in the pharmaceutical industry of Bangladesh and has been consistently in the 1st position among all national and multinational companies since 1985. The pharmaceutical industry is primarily a generics market, producing both patented and offpatent products. In 2007 the market was worth USD 600mn, registering an average growth rate of 12% over the last five years. The industry is dominated by local manufacturers who account for 86% market share. The top two domestic manufacturers, SPL and Beximco Pharma Ltd. have a combined market share of over 27%. The TRIPS agreement gave Bangladesh an advantage to legally reverse-engineer patented products and sell in the LDC until 2016. The gross margin increased in the HY’13 because of increase in price as well as favorable exchange rate movement. Foreign exchange reserve has hit record high in recent times due
Price in Tk

15 NOVEMBER 2012
Company Snapshot
Ticker Face value per share (Tk) Current stock price (Tk) Price target (Tk) Year of Listing Year End 52 weeks High/Low Average daily turnover (Tk mn) Number of Securities (in mn) Market capitalization (Tk bn) DSE Market Cap (Tk bn) % Market capitalization SQURPHARMA 10 172 200-220 1995 March 166/ 286 64 371 64 2,424 2.64%

Chart 1: Price / volume
290 270 250 230 210 190 170
1-Feb-12 1-Jan-12 1-May-12 1-Jun-12 1-Aug-12 1-Sep-12 1-Nov-12 1-Apr-12 1-Jul-12 1-Mar-12 1-Oct-12
Volume Price

12 10 8 6 4 2 0
Volume in Lakh

to surge in remittance and hence we expect the exchange rate to remain stable in the coming months. Given this scenario, we expect that SQURPHARMA will be able to retain the higher level of gross margin in the second half of the year. A check in operating expenditure in the second half may result into lower double digit growth in consolidated NPAT....