Pharmacy chain 36.6 summed up its performance in 1H 2008 on Friday. The report says revenue increased by 46.4% in dollar terms to USD 563.8 million. Sales in the retail sector shot up by about 50% and those by Veropharm surged by 48.6% y-o-y.
Table. Pharmacy chain 36.6: basic financials for 1H 2008, in USD mn
| Indicator | 1H2007 | 1H2008 | Change 1H2008/1H2007 |
|---|
| Revenue | 385 | 563.8 | 46.44% |
| including: | | | |
| retail trade | 300 | 449.7 | 49.90% |
| Veropharm | 58.2 | 86.5 | 48.63% |
| ЕМС | 12.9 | 11.4 | -11.63% |
Source: company data, Finam estimates
On the whole, we regard the results posted as neutral, while at the same time pointing to a certain slowdown in the pace of new pharmacy openings. In 1H 2008, the company opened 38 pharmacies, while shutting down another 71 outlets, rebranding seven pharmacies and transforming one pharmacy. As a result, its chain of pharmacies shrank to 1,192 from 1,224 at the end of 2007.
According to our estimates, the company's shares are now markedly undervalued. However, we believe that the shares have a limited upside potential in the mid term. Our target price for pharmacy network 36.6 is USD 45.4 per share, which implies an upside potential of more than 55% to the current stock valuations.
0.569
0.073
