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ℹ️ Ozone Pharmaceuticals | New IPO
The company has already announced the price range for the batch. Let's look at the business and its prospects.
▫️Price range: 30-35 rubles/promotion.
▫️Capital: from 30 to 35 billion rubles (before IPO)
▫️It is planned to invest up to 10% of capital
▫️Application deadline: October 11-16, 2024
▫️Format: cash-in
👉Ozon Pharmaceuticals Group is a leading Russian pharmaceutical company, ranking first in the generics sector. For those of you who don’t know, the company has nothing to do with OZON Markets.
The company operates two large generics manufacturing plants (Ozon and Ozon Pharm) with an annual production capacity of 378 million packages and 284 million packages, accounting for 51% and 29% respectively. The company has the widest pharmaceutical portfolio in the country and plans to increase it by 50% over the next five years.
Another plant (Mabscale) is focused on biotechnology and is currently producing batches for clinical trials with the aim of commercial production by 2027.
Ozon Medica, a plant for the production of drugs to combat cancer and severe autoimmune diseases with special production requirements, is being built with the goal of starting sales in 2027. Currently, anti-cancer drugs are produced on dedicated lines using existing capacities.
✅Sales growth in the first half of 2024 reached 63% compared to the same period last year. Pharmaceutical sales increased by 16% compared to the previous year, which is due to the launch of two new production lines at the end of 2023.
In the first half of 2024, it will also increase by 40% compared to the previous year. The cost of packaging has increased. It is important to note that net revenue in the report is reflected after paying bonuses to pharmacies and distributors. Therefore, the price per package may change regardless of price increases and inflation. For example, if the company pays pharmacies and distributors a smaller bonus per package. The company calls this "more efficient work to revive sales of the pharmacy chain."
👆The portfolio of drugs is diverse and consists of 508 drugs. No drug has a significant impact on sales, so you avoid the risk of relying on rapid fluctuations in demand and the cost of a particular drug.
✅The compound annual growth rate of the group's revenue under IFRS from 2021 to 2023. It reached 6%. The average annual growth rate of EBITDA from 2021 to 2023 was 8%.
But the company already has a growth strategy. Sales growth is expected to be 30% by the end of 2024, and growth is expected to be above the market by 2030 (18% for the generics segment). That is, the company can grow at a rate of more than 20% per year, develop and pay dividends. There are no problems with the business.
📈 We plan to start selling biosimilars (biotech) in 2027. This market has slightly higher expected growth rates. Ozon Pharmaceuticals now has an extensive biotech drug portfolio of 25 products already in various stages of research, some of which are expected to enter commercial sales by 2027.
✅ At current debt levels, you can distribute at least 35% of your emergency fund as dividends, but no more than 100% of your free cash flow. At a forward P/E ratio of around 6 in 2024, the year-end dividend could be around 5.8% of the parent companies' IPO price.
conclusion:
The company demonstrates a profitable business with growth prospects, low net debt, dividend policy and interesting coefficients. The placement is carried out with a good discount, so the share price after the IPO can grow to 45-50 rubles. It has several pleasant advantages.
✅ Telegram: t.me/+Sh-aXTTRdpMyYzky