Duopharma Biotech Bhd remains a BUY among RHB Investment Bank and CIMB Securities, with RHB raising its target price to RM1.57 from RM1.56 while CIMB retained its RM1.83 target, after stronger margins helped the pharmaceutical group deliver a solid first half.
RHB Research said Duopharma’s first-half 2026 core net profit rose 33% year-on-year to RM61.1 million, accounting for 62% of its full-year forecast and 60% of consensus estimates. It raised FY26-28 earnings forecasts by 4% after factoring in lower administrative costs.
The stronger performance was supported by a 3.2 percentage point sequential expansion in gross profit margin in the second quarter, helped by a stronger ringgit, lower active pharmaceutical ingredient costs and a more favourable product mix. CIMB noted that private sector sales were a key driver, with second-quarter revenue rising 6% year-on-year and core profit increasing 32% to RM30 million.
However, RHB expects earnings to soften in the second half following the expiry of a three-month human insulin supply contract worth around RM65.1 million. CIMB expects full-year core profit to decline 3.5% before recovering 3.6% in FY27 on stronger private sector sales.
The Approved Products Purchase List contract with the Health Ministry has also been extended to June 2027, providing revenue visibility but leaving 97 products subject to unchanged pricing for another six months.
RHB said Duopharma’s valuation remains attractive at 11.6 times 2027 earnings, while CIMB maintained its BUY call and RM1.83 target.
As of 10.31 am, the stock price gained 0.79% to RM1.27.
