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Hong Leong IB starts coverage on Caring, target price RM2.40

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Hong Leong IB starts coverage on Caring, target price RM2.40 Empty Hong Leong IB starts coverage on Caring, target price RM2.40

Post by Cals Wed 14 May 2014, 17:33

Hong Leong IB starts coverage on Caring, target price RM2.40
Business & Markets 2014
Written by theedgemalaysia.com   
Wednesday, 14 May 2014 08:36

KUALA LUMPUR (May 14): Hong Leong IB Research has initiated coverage on Caring Pharmacy Group Bhd with a Buy rating and target price of RM2.40, and said the operator of a chain of community pharmacies was ranked third after Cosway and Guardian with an estimated market share of 4%.
In a note Wednesday, the research house said that as part of the group’s expansion plan, Caring was targeting to have a total of up to 120 outlets by 2016, from the current 97 outlets.
It said Caring's competitive advantage include being the only pharmacy chain providing full-time registered pharmacists at all outlets during retail hours. Caring is also the only pure retail pharmacy chain listed locally.
“Downside risks include delays in expansion plans and keen competition from other pharmacy chains.
“Based on our earnings estimates, Caring is currently trading at prospective PE ratings of 13-14x. Assuming an FY2015F PER of 17x (on par with other domestic market-oriented retail pharmacy chain operators in the region) we arrive at a price target of RM2.40 per share. We therefore initiate coverage on the stock with a Buy recommendation,” it said.
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