By Ying Xian Wong
Pharmaniaga Bhd.’s shares rose Thursday morning after news that it had secured a new medical supply contract from the Malaysian government.
Shares of the Malaysia-listed pharmaceutical company jumped as much as 7.7% and were recently 2.6% higher at 0.40 ringgit ($0.09), trimming 12-month losses to 34%.
Pharmaniaga said in a bourse filing late Wednesday that one of its units won a contract to provide medical-supply logistics services to the health ministry for seven years from July 1.
The company had already been supplying medicines and medical supplies to the ministry under a previous contract started in December 2019.
Pharmaniaga said it will continue to provide its services to the ministry based on agreed-upon terms, while the ministry and the company’s unit finalize the stipulations of the new agreement.
Kenanga Investment Bank said in a note that the development was expected, but should still be positive for Pharmaniaga, adding a stream of income as the company seeks to shed its financially-distressed status.
Pharmaniaga was classified as financially distressed in February last year after swinging to a net loss for the final quarter of 2022, mainly due to a big provision for slow-moving inventories of Covid vaccines. It has about eight months to submit a restructuring plan to Bursa Malaysia.
However, Kenanga IB analyst Raymond Choo Ping Khoon said the company may need to offer more competitive rates under the new contract as the government looks to get more value for its money.
Kenanga maintained an underperform rating on Pharmaniaga with a MYR0.33 target.
Write to Ying Xian Wong at [email protected]
Read the full article here
