CIMB Investment Bank Bhd (CIMB Securities) has maintained its BUY call on Duopharma Biotech Bhd with a higher target price of RM1.83, saying the group’s RM225 million insulin supply contracts from the Ministry of Health will support earnings growth and improve longer-term visibility, while also raising FY26 to FY28 earnings estimates by 0.4%, 0.8% and 0.5%, respectively.
The research house said Duopharma has secured multiple insulin supply agreements covering recombinant human insulin, insulin aspart and insulin glargine, with the total value standing at RM225 million. It noted that the insulin glargine contract marks a new growth avenue for the group as it was not previously included in forecasts, although contributions in the near term are expected to remain modest.
CIMB Securities highlighted that the RM155 million contract for recombinant human insulin spans three years, while insulin aspart and insulin glargine contracts are valued at RM52.5 million and RM18 million respectively over two years. It added that the timing of the awards aligns with expectations following the expiry of a previous insulin contract in May 2026.
The research house said it is mildly positive on the inclusion of insulin glargine, noting that it was previously supplied on an ad hoc basis rather than through a formal contract. Insulin glargine typically requires fewer daily doses compared with recombinant human insulin and is more commonly used in Type 1 diabetes management.
CIMB Securities estimated that Duopharma’s total annual insulin revenue from the Ministry of Health will be around RM75 million to RM80 million, accounting for about 7% to 8% of forecast revenue in financial year 2027.
While near-term earnings impact is limited, the research house said the formalisation of the insulin glargine contract could support future renewals as adoption gradually expands within the public healthcare system.
It maintained that Duopharma’s longer-term outlook remains supported by healthcare reforms, broader generic drug adoption and an expected pipeline of new product listings under government procurement programmes.
As of 11.19 am, the stock price rose 1.65% to RM1.23.
