Luye Pharma   

AsiaPharm Group

Mark Mobius... the great man behind Templeton..

 

Fund manager Templeton Asset Management said yesterday that it will sell its 4% stake
in drug company AsiaPharm only for a 24% higher price than the current offer made by
private equity firm MBK Partners. 'If they are going to buy us out, we would want 90
(Singapore) cents a share - that's what we think is fair value,' Mark Mobius, Templeton's
top fund manager for emerging markets, told Reuters. MBK made an offer to buy
[ 5 ] CIMB-GK Research Pte Ltd 28 March 2008
AsiaPharm for $0.725 a share, valuing the firm at S$357 million. MBK, which wants to
privatise the China-based firm, has received 73.8% of shares so far, and the private
equity firm has said it does not intend to revise its offer price unless 'a competitive
situation arises', said a statement issued by adviser ABN Amro. (BT)

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So 24% of 0.725 will bring the reasonable price to S$0.89 - S$0.9 !!!! 

 

 

DJ MBK, Management Say Buyout Price For AsiaPharm Is Final

SINGAPORE (Dow Jones)--The offer price in a S$357 million (US$259 million) management buyout proposal for AsiaPharm Group Ltd. (A61.SG) won't be revised from the current S$0.725 a share unless a competing bid emerges.

According to a filing with the Singapore Exchange, the offer by company management and private equity firm MBK Partners LP has received acceptances giving them control of a 69.05% stake in the China-based drugmaker.

At the time the offer was announced, the bidders had already secured acceptances reflecting 44% of AsiaPharm shares.

The offer, which will be open until March 31, is conditional upon the bidders gaining 90% control of AsiaPharm shares.

 

 

Templeton rejects AsiaPharm offer

The bid at 72.5 cents a share was considered too low and disadvantageous to minority shareholders.


Mar 04, 2008
The Business Times

 

TEMPLETON Asset Management has dismissed a private equity bid at 72.5 cents a share for AsiaPharm as too low and disadvantageous to minority shareholders, Reuters reported. It owns about 4 per cent of AsiaPharm. The offeror is LuYe Pharmaceutical, a unit of MBK Partners.



Any advice what minority shareholders like us should do?

 

It's no big deal... 

 

ahhh............almost went in before their trading halt....ALMOST...their technical charts tell us something is going on le...darnz

 

too late to go in liao

 

 

Game over on the board?

 

Asiapharm is being taken over and then privatised:

Feb. 5 (Bloomberg) -- MBK Partners LP, a Cayman Islands-
based private equity company, is offering S$357.3 million ($253
million) to take Singapore-listed Asiapharm Group Ltd. private
to lower costs and increase the company's efficiency.
    LuYe Pharmaceutical Investment Co., a subsidiary of MBK, is
offering 72.5 Singapore cents a share for the Shandong, China-
based maker of pharmaceuticals, according to a statement
released to the Singapore stock exchange today. That's 14
percent higher than the stock's last traded price.
    MBK, which manages $1.56 billion of assets, is forming a
group with some of Asiapharm's management, including Chairman
Liu Dian Bo, to take over the drugmaker. Shareholders owning
about 44 percent of the company, including Liu, have already
agreed to accept the offer, according to the statement.
   Asiapharm jumped 4 Singapore cents, or 6.7 percent, to 63.5
cents when it last traded in the city-state on Jan. 31. The
shares have been suspended for the release of the announcement.
    ABN Amro Bank NV is advising MBK and LuYe Pharmaceutical on
the bid.

 

look like some gd news..

 

Does anyone know why there is a trading halt this afternoon?

 

why pharmatical industry is not earning money at china? like starpharm as well, why?

 

My goodness, this sucker got hit by another negative brokerage report. Luckily i sold out long ago... seems like its still not time to relook

 

DBS Vickers - Feeling the effects of margins drag

Hold S$0.535; Price Target : S$ 0.56 (Prev S$ 0.67)

AsiaPharm performed below expectations.

Topline grew 67% y-o-y to S$130.5m. This was mostly due to the increase in sales of its new drugs CMNa, Lipusu, Tiandixin, which offset the decline in sales of its core drugs, Lutingnuo and Nuosen.

Margin pressure from Integration costs; pretax margins down to 18.6% in 3Q07. Selling, distribution and administrative expenses increased 97.4% and 100% respectively due to increased sales of its drugs and costs related to the integration of the newly acquired entities.

Slight margin pressure q-o-q Administrative expenses due to integrating its newly acquired companies continue to drag pretax margins in 3Q07 as we see further margins squeeze from 2Q07.

 

fm bs, staggering goodwill of 309.808m rmb, total assets = 1180.923m rmb. this goodwill will sooner or later be amortised. 

 
They have been saying this since last few quarters.... 

Goodwill increased by RMB 265.4 million as a result of the acquisition of SSL group of
companies. We are in the process of doing the purchase price allocation exercise and the
actual goodwill amount may differ.

 

CIMB - Asiapharm Group (S$0.54) - 3QFY07 results - New drugs to drive growth

Below expectations. 3Q07 net profit of Rmb21.7m (+8% yoy) is 50% below our expectation and forms 16% of consensus full-year estimate. The shortfall can be attributed to a fall in Lutingnuo and Nuosen sales as a result of price cuts by the PRC government, higher SG&A expenses from the integration of newly-acquired entities and higher finance costs. 9M07 net profit accounts for 41% of our full-year forecast and 53% of consensus.

Revenue growth led by new products. Revenue grew 68% yoy to Rmb130.5m on the back of higher sales of its pharmaceutical drugs. Main contributors to the 92% yoy increase in pharmaceutical drug sales to Rmb61.7m were CMNa, Lipusu and Tiandixin, which offset a fall in revenue from Lutingnuo and Nuosen. Maitongna sales slightly improved. Distribution sales of other companies? drugs grew 104% yoy to Rmb1.6m, mainly led by higher sales of Lipusu and Tiandixin through its trading subsidiary. Sales of R&D results fell 92% yoy as the group devoted most of its resources to the research of its own products. Export sales of active ingredients also slipped 89% yoy to Rmb0.4m as the group continued to downplay this business on account of its low margins and high credit risks.

Gross margins expanded 8% pts yoy to 86%, thanks to a focus on the sale of pharmaceutical drugs, which command higher gross margins. In addition, drugs from recent acquisitions such as CMNa, Lipusu and Tiandixin have higher margins.

International collaboration. While the group continues to focus on the domestic sale of pharmaceutical drugs and unlocking synergies from its acquisitions, it is also exploring collaborative opportunities with international partners to expand its product portfolio and enhance its international status.

Maintain Outperform; target price reduced to S$0.75 from S$0.98. We have cut our FY07-09 earnings estimates by 4-37% on lower revenue and higher operating cost assumptions. We have also rolled forward our target basis from end-CY07 to end-CY08. Following the above, our target price has been shaved to S$0.75 from S$0.98, still based on peer average (7.3x CY09 P/E). With the integration of acquired companies expected to be completed in the next 6-12 months and a recovery of the pharmaceutical industry, earnings should gather momentum, led by higher-margin oncological and new products. Maintain Outperform.

 

OCBC - Costs mauls bottomline

Costs structure still a concern. AsiaPharm Group Ltd (APHM) reported its 3Q07 results last evening. Revenue grew at an encouraging 67% YoY to RMB130.5m. Gross profit rose 84.1% YoY to RMB111.5m and gross profit margin improved to 85% (vs 76% in 3Q06), indicating better product mix. However, net profit attributable to shareholders rose a meagre 8.4% YoY to RMB21.7m primarily due to elevated costs related to its recent acquisitions.

Bitter sweet acquisitions. AsiaPharm's acquisitions are finally starting to deliver substantially, evident from the rising gross profit margins as its sales force sold greater amounts of higher valued drugs. The newly acquired drugs spurred AsiaPharm's pharma sales to grow by 92.4% YoY. However, expenses relating to its acquisitions have continued to be a bugbear, rising 100% YoY for AsiaPharm and depressing its net profits. Although management has indicated that this was one-off in 2Q07, it appears to have sustained into 3Q07 and we see this affecting AsiaPharm until they relook the group's costs structure.

Recovery still in place. We are encouraged by the growth in drug sales as well the improving margins. After a tumultuous year of regulatory changes, bribery charges and wide spread drug price cuts in 2006, the regulatory authorities have pledged RMB8.8b to improve food and drug safety. Stricter Good Manufacturing Practice (GMP) inspection standards to be implemented on 1 Jan 08 will reward AsiaPharm for closely adhering to strong safety standards all these years.

Revised valuation. We introduce FY09 figures and revise our top and bottomline to cater for the expected drag that its new cost structure will impose on AsiaPharm. Rolling forward to FY08, we derive a fair value estimate of S$0.63 (previously: S$0.84) but at a lower multiple of 12x PER (vs 14x) as we wait to see how effectively management will restructure the group to be more cost efficient. Recent market volatility has depressed the share price and we see an apt opportunity to get into the recovering pharma sector with AsiaPharm. Maintain BUY with a potential 17% upside to our fair value.