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1、,267.60,310.00,1.3,Bangalore,Associate,Company report,Healthcare Pharmaceuticals Equity India,abc Global Research,Overweight Target price (INR) Share price (INR) Forecast dividend yield (%) Potential return (%) 17.1 Note: Potential return equals the percentage difference between the current share pr
2、ice and the target price, plus the forecast dividend yield,Biocon Limited (BIOS IN) OW: In-line 3QFY13, R TP remains unchanged at INR310,3QFY13 results largely in-line with our expectations: Biocon reported net profit of INR918m (8.1% yoy), c2.7% lower than HSBCe INR944m (but beat consensus by c8%).
3、 Sales grew 22.6% yoy to INR6.3bn, biopharma up c29.2% and contract research 24.7% yoy. EBITDA margins at 23.7% were c200bp lower than HSBCe essentially due to lower licensing income (INR88m vs. INR250m estimated). Net profit was benefitted by higher other income and marginal forex gain though offse
4、t by higher tax rate in 3Q. Sales remain robust along all segments: Biopharma sales ex India formulations and ex licensing income at INR4bn grew 31.6% yoy largely led by growth in insulin in emerging,25 January 2013 Girish Bakhru*, CFA Analyst HSBC Securities and Capital Markets (India) Private Limi
5、ted +91 22 22681638 girishbakhruhsbc.co.in Damayanti Kerai* View HSBC Global Research at: *Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulations Issuer of report: HSBC Securities and Capital Markets (India) Private Limited Disclaim
6、er lower licensing income booked during the quarter Overall sales largely in-line; EBITDA margins hit by higher than expected other expenses including R Remain OW with a TP of INR310,abc,3QFY13 highlights USD1bn outlook by 2018: Biocon aims to achieve sales of USD1bn by 2018 of which small molecules
7、 will contribute cUSD300m, India formulations USD200m, Contract research USD250m and biosimilar insulins another USD200m. By 2015, the company aims to be a USD700m turnover company with USD280m from small molecules, USD140m India formulations, USD175m from contract research and USD70mn from biosimil
8、ar insulins (mainly emerging markets). Biopharmaceuticals business: The biopharma business (excluding licensing income, India formulations business) delivered a strong growth of 32% during 3QFY13. This growth is largely driven by improved product mix and robust sales in small molecules (fidaxomicin,
9、 tacrolimus) including strong insulin and immunosuppressant sales in emerging markets. Statins: Biocon expects simvastatin growth to continue and has not seen any erosion yet post entry of atorvastatin generics. As per IMS, simvastatin continues to be a leading molecule with 40% share in statins cat
10、egory, followed by,30% atorvastatin, 15% pravastatin, 10% rosuvastatin and 5% lovastatin. India branded formulations: This segment grew c19% yoy during the quarter with strong focus on growth segments like diabetes, oncology, cardiac, critical care and immunosuppressant. NPPA new pricing policy impa
11、ct will be not material for Biocon. Sales force strength is c1,700 people. Fidaxomicin: Fidaxomicin supplies to Optimer are steady and increasing as the innovator has launched product in EU and many other countries. Biosimilar insulins: Biocon expects next 3-5 years growth to be led by emerging mark
12、ets essentially. The company has approvals for insulin in 44 countries with another 30 under registration. EU entry through Rh insulin will be most critical event in 2015 and the company expects opportunity to be large despite shift towards analogues in regulated markets. Itolizumab (Alzumab): Itoli
13、zumab recently got approval in India. The company expects to launch this product by mid-2013 and expects sales of INR1bn within first four years, which will recoup R and 2) from time to time to identify short-term investment opportunities that are derived from fundamental, quantitative, technical or
14、 event-driven techniques on a 0-3 month time horizon and which may differ from our long-term investment rating. HSBC has assigned ratings for its long-term investment opportunities as described below. This report addresses only the long-term investment opportunities of the companies referred to in t
15、he report. As and when HSBC publishes a short-term trading idea the stocks to which these relate are identified on the website at Details of these short-term investment opportunities can be found under the Reports section of this website. HSBC believes an investors decision to buy or sell a stock sh
16、ould depend on individual circumstances such as the investors existing holdings and other considerations. Different securities firms use a variety of ratings terms as well as different rating systems to describe their recommendations. Investors should carefully read the definitions of the ratings us
17、ed in each research report. In addition, because research reports contain more complete information concerning the analysts views, investors should carefully read the entire research report and should not infer its contents from the rating. In any case, ratings should not be used or relied on in iso
18、lation as investment advice. Rating definitions for long-term investment opportunities Stock ratings HSBC assigns ratings to its stocks in this sector on the following basis: For each stock we set a required rate of return calculated from the cost of equity for that stocks domestic or, as appropriat
19、e, regional market established by our strategy team. The price target for a stock represents the value the analyst expects the stock to reach over our performance horizon. The performance horizon is 12 months. For a stock to be classified as Overweight, the potential return, which equals the percent
20、age difference between the current share price and the target price, including the forecast dividend yield when indicated, must exceed the required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classifi
21、ed as Underweight, the stock must be expected to underperform its required return by at least 5 percentage points over the next 12 months (or 10 percentage points for a stock classified as Volatile*). Stocks between these bands are classified as Neutral. Our ratings are re-calibrated against these b
22、ands at the time of any material change (initiation of coverage, change of volatility status or change in price target). Notwithstanding this, and although ratings are subject to ongoing management review, expected returns will be permitted to move outside the bands as a result of normal share price
23、 fluctuations without necessarily triggering a rating change. 7,Jan-08,Jan-09,Jan-10,Jan-11,Jan-12,Jan-13,45%,18%,Biocon Limited (BIOS IN) Pharmaceuticals,abc,25 January 2013 *A stock will be classified as volatile if its historical volatility has exceeded 40%, if the stock has been listed for less
24、than 12 months (unless it is in an industry or sector where volatility is low) or if the analyst expects significant volatility. However, stocks which we do not consider volatile may in fact also behave in such a way. Historical volatility is defined as the past months average of the daily 365-day m
25、oving average volatilities. In order to avoid misleadingly frequent changes in rating, however, volatility has to move 2.5 percentage points past the 40% benchmark in either direction for a stocks status to change. Rating distribution for long-term investment opportunities As of 25 January 2013, the
26、 distribution of all ratings published is as follows:,Overweight (Buy),(28% of these provided with Investment Banking Services),Neutral (Hold) Underweight (Sell),37%,(27% of these provided with Investment Banking Services) (22% of these provided with Investment Banking Services),Share price and rati
27、ng changes for long-term investment opportunities,Biocon Limited (BION.BO) Share Price performance INR Vs HSBC rating,Recommendation HK The Hongkong and Shanghai Banking Corporation Limited, Hong Kong; TW HSBC Securities (Taiwan) Corporation Limited; CA HSBC Bank Canada, Toronto; HSBC Bank, Paris Br
28、anch; HSBC France; DE HSBC Trinkaus HSBC Bank,abc Issuer of report HSBC Securities and Capital Markets (India) Private Limited Registered Office 52/60 Mahatma Gandhi Road Fort, Mumbai 400 001, India Telephone: +91 22 2267 4921 Fax: +91 22 2263 1983 Website: ,Brasil SA Banco Mltiplo; HSBC Bank Austra
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