With limited opportunities for market expansion in their very own country, multinationals based in developed markets (EFA) (VEA) are directing resources towards expansion in emerging markets. If we glance specifically on the pharmaceutical space, revenues from emerging markets (in line with BMI research) are expected to double inside a decade. Even as Big Pharma moves into rapidly growing international markets, a select variety of long-established local drugmakers in these markets are uniquely positioned to capture much of this growth.
Moreover, rising per capita incomes coupled with increased access to formalized healthcare should make sure that the pharmaceutical industry in emerging markets delivers growth and returns to investors. We filtered the universe of emerging market firms operating within the pharmaceutical industry to seek out the 7 largest firms.
1. PT Kalbe Farma Tbk – INDONESIA
PT Kalbe Farma Tbk, headquartered in Indonesia, is the most important listed pharmaceutical company in Southeast Asia. Kalbe Farma’s core business is predicated on 4 divisions: prescription pharmaceuticals, consumer health products, dietary products, and distribution and logistics. The company derives 95% of its revenue from Indonesia. ROCE for the corporate’s shares for 2016 was 20.56%.
With a market capitalization of over $6.15 billion as of August 18, the corporate is the most important drug manufacturer in emerging markets. The company’s shares are listed on the Jakarta Stock Exchange under the symbol KLBF and on the American OTC market under the symbols PTKFF and PTKFY. KLBF is up 15.18% 12 months to this point and is trading at a P/E ratio of 34.52. The company’s shares offer a dividend yield of 1.26%. From a buy perspective, analysts covering the stock have a advice of three.5/5.
2. Samsung Biologics Co., Ltd. – SOUTH KOREA
South Korea-based Samsung Biologics, a healthcare division of Samsung C&T Corporation (028260.KS), engages within the research, development and commercialization of biopharmaceutical products worldwide. Samsung Biologics is currently in charge over $19 billion market capitalization, making it the second largest drug manufacturer in emerging markets. The company’s shares are listed on the Korea Stock Exchange under the symbol 207940 and have increased by 80.79% because the starting of the 12 months. From a buy perspective, analysts covering the stock have a advice of 4.25/5.
3. DHG Pharmaceutical Joint Stock Company – VIETNAM
DHG Pharmaceutical Joint Stock Company, along with its subsidiaries, produces and sells pharmaceuticals in Vietnam. The company’s ROCE for FY 2016 was 22.70%.
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WITH $1.1 billion by way of market capitalization, the corporate’s shares are listed on the Ho Chi Minh City Stock Exchange under the symbol DHG. The company’s shares are up 69.9% 12 months to this point and are trading at a current P/E ratio of twenty-two.1. According to Bloomberg data, the forward P/E ratio for the stock is estimated to drop to 18.87 in December 2017. The company has a gross dividend yield of two.10%. From a buy perspective, analysts covering the stock currently have a rating of two/5.
4. Celltrion, Inc. – SOUTH KOREA
Celltrion, Inc. based in South Korea, is a world biopharmaceutical leader with strong research and development (R&D) capabilities in biosimilar monoclonal antibodies (mAbs) and latest therapeutics for various therapeutic areas, including oncology and autoimmune diseases. The company’s ROCE for 2016 was 9.5%. WITH $15 billion by way of market capitalization, the corporate’s shares are listed on the Korea Stock Exchange under the symbol 068270.
As of August 18, 2017, the stock price was up 1.96% year-to-date. Trading at a current P/E of 45.77, the stock’s forward P/E is currently 40.71 (December 2017 estimate). From a buy perspective, analysts covering the stock currently have a rating of 4.4/5.
5. PT Indofarma (Persero) Tbk – INDONESIA
Indofarma Persero Tbk PT operates as a state-owned enterprise producing pharmaceuticals and health products in Indonesia. The company’s product offering includes generic, branded, licensed and over-the-counter medicines, in addition to traditional herbs, health foods, cosmetics and complementary foods for youngsters. Additionally, the corporate produces packaging materials, machines and equipment, in addition to infrastructure related to the pharmaceutical industry. 99% of the corporate’s revenue comes from Indonesia.
Shares listed under the symbol INAF on the Jakarta Stock Exchange include: $628.73 million in market capitalization. The stock is down 43.16% 12 months to this point.
6. Traphaco Joint Stock Company – VIETNAM
Another Vietnamese pharmaceutical company has been included within the list of the highest 7 drug producers in emerging markets. Traphaco JSC is engaged within the production and trading of pharmaceutical products, chemicals and medical supplies and equipment in Vietnam. In fiscal 12 months 2016, the corporate observed an ROCE of 23.26%.
Approximately $373.33 million by market capitalization, the corporate is the sixth largest drugmaker in emerging markets. The shares are listed on the Ho Chi Minh Stock Exchange under the symbol TRA. The company’s shares have increased by 25.79% because the starting of the 12 months and are currently trading at a P/E ratio of twenty-two.66.
7. Hanmi Science Co., Ltd. – SOUTH KOREA
South Korea-based Hanmi Science produces pharmaceutical products including antibiotics, vitamins and intestinal tonics. The company also supplies beverages and processes soft capsules for other pharmaceutical firms. 99.2% of the corporate’s revenue comes from South Korea alone. The company’s shares are listed on the Korea Stock Exchange under the symbol 008930 and dominate $3.5 billion currently in market capitalization. The stock is up 49.73% 12 months to this point.
Source: Frontera.net | Bloomberg
