1.Pharmaceuticals |
NEUTRAL - Downgrade
Author(s): Irenne ACHMAD,
The impact of the new universal healthcare plan or SJSN (Sistem Jaminan Sosial Nasional) has been the subject of intense discussion over the past few years. Our research on the existing system reveals that an effective implementation by 2014 could prove challenging. We downgrade the pharmaceutical sector from Overweight to Neutral and stay Neutral on Kalbe, our top pick. Despite the potential pick-up in healthcare expenditure growth from SJSN over the longer term, effective implementation in the near term is a risk. Our discussions with administrators and healthcare providers give us the impression that challenges abound. Thus, growth may not come as early as expected.
Exciting but not cheap
Kalbe is trading at 36x FY13 P/E and 29.4x FY14 P/E, which translates into 1.84x PEG. This compares to an average 1.29x PEG for large-cap pharmaceutical companies in China and India, where the markets are projected to grow 21% and 19%, respectively. Arguably, Kalbe‟s expensive valuation prices in the scarcity factor as it remains the only sizeable harmaceutical company in Indonesia with enough liquidity.
2.ASEAN Strategy: Weekly Key Calls | Yen weakening on track
Author(s): Chiou Yi CHANG,
3.Australia/Hong Kong/India/Indonesia/Korea/
Strategy Note
Alpha Navigator | Uncovering the opportunities in global infrastructure
Author(s): Shane LEE,
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