Global Investment House – Kuwait – Jordanian Pharmaceutical Manufacturing Company (JPMC) – Results Update Report- JPMC’s total revenue was JD21.1mn in 2007, up by 30.4% over the JD16.2mn recorded in the previous year. Net profit for the year 2007 was JD1.6mn, down by 22.6% from the JD2.1mn reported in 2006. The net profit margin declined to 7.8% in 2007 down from 13.2% in 2006.
Based on its current market price of JD1.75, JPMC stock is trading at 21.2x of its 2007 earnings and 1.0x its 2007 book value. On a one year forward basis, the stock is trading at 18.2x of 2008 forecasted earnings and 1.0x of 2008 forecasted book value. Based on a WACC of 11.3%, the DCF value of JPMC is JD1.87.
On the basis of the weighted average P/E for the industry and the JPMC’s projected 2008 earnings, the company’s stock value is JD1.93. Assigning an 80.0% weight to the DCF value, and a 20.0% to the relative value, the weighted average share value of JPMC came out to be JD1.88, which is 7.7% more than the current trading price of JD1.75. Hence we recommend a “HOLD” on the company’s stock.
Financial Performance
The company’s total revenue was JD21.1mn in 2007, up by 30.4% over the JD16.2mn recorded in the previous year. The company’s sales have been growing at a three year CAGR of 26.4%. In 2007, exports constituted 76.1% of the company’s total revenue.
Chart 1: Sales Growth of JPMC
Source: Company Reports & Global Research
Cost of goods sold for the year 2007 were JD9.9mn, up by 24.9% from the JD7.9mn reported in the previous year. The company reported a gross profit of JD11.2mn in 2007, an increase of 35.7% from the JD8.3mn recorded in 2006. This resulted in a rise in the gross profit margin to reach 53.2% in 2007 vis-à-vis 51.1% in 2006. Net profit for the year 2007 was JD1.6mn, down by 22.6% from the JD2.1mn reported in 2006. The net profit margin declined to 7.8% in 2007 down from 13.2% in 2006.
The company’s balance sheet size grew by 5.4% in 2007 to reach JD54.5mn from JD51.8mn in 2006. Accounts receivables, which constituted 31.9% of total assets in 2007, increased by 28.6% to reach JD17.4mn in 2007 from JD13.5mn in 2006. The receivables days increased to 267 days in 2007 from 258 days in 2006.
On the liabilities side, the total current liabilities were JD10.7mn in 2007, up by 38.1% over the JD7.7mn reported in the previous year, whereas the long term liabilities decreased by 15.9% in 2007 to reach JD9.6mn vis-à-vis JD11.4mn reported in the previous year. Total shareholder’s equity increased to JD34.3mn in 2007, up by 5.1% from the JD32.6mn reported in the previous year.
Jordan's pharmaceutical market is considered small due to the country’s small population estimated at just around 5.7mn people. Therefore much of the Jordanian companies derive their growth from penetration into new markets and increasing their exports. In 2007, the pharmaceutical sector contributed to 9.4% of Jordan’s total exports.
Like other Jordanian pharmaceutical companies, JPMC derives a significant portion of its sales from exports. However, the company differs from its peers in a sense that it develops new patents and technologies and transfers them to other pharmaceutical companies in addition to manufacturing pharmaceutical products. We believe that the company’s focus on improving that aspect of its business in addition to entering new markets will ensure its sustainability and growth.
DSS 2008 ‘The Collectors’ exhibition officially opens
14 local, regional, and international collections go on display till July 22
The Collectors, a DSS 2008 Signature Event and a platform for collectors to display rare and unique artifacts, was officially inaugurated by His Excellency Mohammed Al Murr, Deputy President of Dubai Culture and Arts Authority on July 16 at Wafi, a key sponsor of DSS 2008.
His Excellency, Al Murr, was accompanied by HE Sultan Saqr Al Suwaidi, member of the Federal National Council; Saeed Al Nabouda, Project Manager of Dubai Culture and Arts Authority, in addition to Ibrahim Saleh, General Coordinator of DSF Office, and Yousif Mubarak, COO of DSF Office.
HE Al Murr was shown around the unique exhibits and displays in an evening that also witnessed a host of dignitaries and media. A total of 14 local, regional, and international collectors are participating in the exhibition that runs till July 22.
HE Mohammed Al Murr said, “The collections displayed here represent not just hobbies of individuals but also carry with them traditions and history. Events like The Collectors are ideal for the exchange of cultures and ideas and these are essential elements of our wider initiatives for understanding people around us and for other cultures to understand us.”
Ibrahim Saleh said, “The Collectors has undergone a drastic change in terms of the quality of displays to include local, regional, and international collections that have set world records in their respective categories.
The displays for this year include the world’s largest collection of snow globes, the world’s largest collection of licence plates and rosary beads, the world’s largest collection of bookmarks, antique cameras, brand collectibles, and paintings and photographs of Dubai’s Royal Family. The exhibition is open from 10am to 10pm.
