RHB sees healthy prospects for Caring Pharmacy

Business & Markets 2013
Written by Jonathan Gan of theedgemalaysia.com
Friday, 06 December 2013 15:17
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KUALA LUMPUR (Dec 6): RHB Research Institute Sdn Bhd has initiated
coverage on Caring Pharmacy Group Bhd with a "buy" call and fair value of
RM2.28.
In a note today, RHB analyst Chong Ooi Ming said Caring offers investors
exposure in the healthcare and retail sectors.
"Its earnings are non-cyclical and organic growth is strong.
“With over 50% of sales derived from health supplements and personal care
products, we see Caring benefiting from spending by increasingly healthconscious
consumers,” said Chong.
At 3.03pm Caring shares rose two sen to RM2.01.
Chong said "Caring is a growth stock". The analyst said the firm is well
positioned to address secular trends of an aging but affluent population, the
prevalence of lifestyle diseases and the rise in multi-vitamin consumption.
While Caring is seen taking an organic route to grow its business, Chong said
there is also a possibilty of Caring opting for mergers and acquistions (M&A).
"We are projecting for 30 new outlets and MYR24.8m/29.8m/33.8m in net profit
for FY14/15/16 respectively under our base case scenario.
"As we also do not discount the possibility of the group taking an inorganic
growth path, we think the prospects of M&As may add
excitement to the stock," Chong said.
Caring's financial year ends on May 31.