Health Care: Dechra Pharmaceuticals, J.B. Chemicals & Pharmaceuticals, Kossan Rubber Industries and more

• Dechra Pharmaceuticals (DPH LN) shares corrected around 25% from its recent peak of GBX5,150 in late December, due to general market apathy toward high multiple stocks.
• Despite the extraordinary levels experienced in the prior year, Dechra maintained its double-digit revenue growth and reported constant currency revenue growth of 15% y/y for H1FY22.
• Long-Term fundamental growth story remains intact for Dechra. The company has also forayed into a new and niche therapy area through acquisition of one drug this year.

• JB Chemicals & Pharmaceuticals’ (JBCPL) Q3FY22 performance was better than our estimates on operational fronts.
• Excluding revenue deferred to Q3FY21 from Q2FY21, consolidated revenue grew 23% YoY to Rs6bn (I-Sec est: 5.8bn).
• EBITDA margin stood at 21.3%, higher than our estimate of 19.8%.

• Negatives largely priced in; U/G to HOLD
• Results in line
• More details on 4Q21 results
• Earnings adjustments; Upgrade to HOLD.

Kossan’s 4Q21 net profit of MYR218.7m (-56% YoY, -59% QoQ) was in line. The QoQ decline in 4Q21 earnings performance was mainly dragged by lower ASP. We lower our FY22-23 earnings forecasts by -41%/-8% to factor in lower ASP and utilisation rate assumptions as well as the Prosperity tax. Our TP is lowered to MYR1.71 (-16 sen; on an unchanged 17.7x CY23 PER or -1SD of historical mean). After the selloff, risk-reward in the stock appears evenly balanced. U/G to HOLD.