Hyphens

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Hyphens Pharma was listed in SGX in May-2018 at a listed price of $0.26. Core business of the group comprise of:

• Specialty pharma

• Proprietary brands:

  • Ceradan: dermocosmetic products​

  • TDF: dermocosmetic products

  • Ocean Health: health supplements

  • CG 210: scalp care products

• Medical hypermart & digital

Served markets are: Singapore, Vietnam,Malaysia, Indonesia and Philippines. Other markets served via distribution networks are Hong Kong, Myanmar, Brunei, Cambodia and Oman. 

Singapore constitute 49% of revenue and Vietnam 38% in FY20. Malaysia was 6% with remaining 7% under Others. 

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Financial

Since IPO, revenue have declined 1% in FY19 and grew 4% in FY20. 

Specialty Pharma saw a dip of 6% sales in FY19.

Proprietary brands grew at a rate of 10% in FY19 and 26% in FY20. Mix have increased from 11% in FY16 to 15% in FY20. 

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Geographically, revenue in Singapore continue to trend up while Vietnam were largely range bound at around $47M per year.

 

Gross margin have trended up from 32.2% in FY15 to 35.4% in FY20. However, expenses increased at a sharper rate from 23.9% and 29.6% during these periods resulting in lower operating & net margins. 

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Risk

Balance sheet is healthy. However receivables have trended up from 70 days in FY15 to 86 days in FY20. Current ratio 2.1 and Z-score 4.1.

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Business Outlook

1Q21 revenue was up 7.5% due to Vietnam demand and offset by lower sales in proprietary brands and hypermarket & digital. Net profit was up 0.6%.

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The group was recently awarded an e-pharmacy licence for WellAway Pharmacy by Health Science Authority. The company have partnered with about 100 clinics in Singapore to provide this service.

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Opinion

Hyphens operates in a fragmented and highly competitive markets. Top line growth had been anaemic with growing expenses chipping away margins. 

Vietnam recovery will provide much needed top line growth but in FY17 & FY18 where mix was higher, the company GM declined by 2% points. If valid, then margin may suffer some pressure going forward. 

 

e-Pharmacy will be interesting to watch, if the channel will provide structural advantage in building a loyal customer base.