KUCHING: Analysts say the scarcity of deep freezers, especially in rural areas, makes Kelington Group Bhd’s (Kelington) dry ice a timelier and more efficient option for vaccine distribution.
The government, through the Health Ministry, recently signed a preliminary purchasing agreement with pharmaceutical company Pfizer to obtain 12.8 million doses of Covid-19 vaccines to meet the immunisation needs of 20 per cent or 6.4 million Malaysians.
“Subsequently, Kelington has been in touch with Pfizer and other pharma companies to understand the requirements of using dry ice to store the vaccines,” the research arm of Kenanga Investment Bank Bhd (Kenanga Research) said in its notes.
“We understand that the scarcity of medical deep freezer, especially in rural areas makes dry ice a timelier option for shipping and distribution.
“Apart from supplying their own dry ice, other dry ice manufacturer in Malaysia also have to source liquid CO2 (LCO2) from Kelington, as there are only two players locally, due to high barrier of entry.”
Looking ahead, Kenanga Research believed Kelington’s earnings potential in financial year 2021 (FY21) is being underestimated by market, which is only looking at RM22.2 million.
“Kelington already achieved profit after tax (PAT) of RM24.4 million in FY19 even with approximately RM1 million start-up losses for its LCO2 plant and approximately RM2 million idling losses at its Taiwan division.”
For FY21, the research arm forecast the LCO2 plant to start generating RM3 million to RM4 million profit, while Taiwan will also swing into profit of RM2 million.
“With its all-time high order-book, we believe our FY21E PAT of RM31.1 million is fair, representing merely a 27 per cent growth from FY19 level.”
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