Nova Wellness Group Berhad

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research Report by MALACCA SECURITIES

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Malacca Securities

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Kenanga

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Kenanga
OUTPERFORM – TP RM0.63

" New SKUs to Drive Growth ”

NOVA’s FY24 results disappointed. Its FY24 core net profit declined 25% on reduced sales and lower-than-expected margin. However, we remain upbeat on its prospects driven by higher production at its new plant and the recovery in consumer spending. We cut our FY25F net profit forecasts by 24%, reduce our TP by 10% to RM0.63 (from RM0.70) but reiterate our OUTPERFORM call.

Analyst:
Raymond Choo Ping Khoon
pkchoo@kenanga.com.my

Change of Company Secretary - WONG YOUN KIM

Quarterly rpt on consolidated results for the financial period ended 31/03/2024 (Amended Announcement)

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Kenanga
Outperform – TP of MYR 0.70

“A Soft Patch, New SKUs to Drive Growth”

NOVA’s 9MFY24 results disappointed. Its 9MFY24 core net profit declined 18% on reduced sales and the resulting deterioration of operating scale. However, we remain upbeat on its prospects driven by higher production at its new plant and the recovery in consumer spending. We cut our FY24-25F net profit forecasts by 16% and 15%, respectively, reduce our TP by 5% to RM0.70 (from RM0.74) but reiterate our OUTPERFORM call.

Analyst(s):
Raymond Choo Ping Khoon
pkchoo@kenanga.com.my

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Mplus
Sell – TP of MYR 0.54

“Softer 3Q Due To Higher Overall Expenses”

Nova Wellness Group Berhad (NOVA) 3QFY24 recorded a core PAT of RM1.8m (-39.8% QoQ, -37.3% YoY), which bring the sum to RM7.5m for 9MFY24 (-30.7% YoY). The core earnings came in below expectations, amounting to 58% and 49% of ours and consensus estimates of RM RM13.0m and RM15.4m. Key deviations was mainly due to (i) lower-than-expected revenue and (ii) higher-than-expected selling and distribution expenses.

Analyst(s):
Loui Low
louilow@msec.com.my

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Malacca Securities
Hold (from Sell) - TP of RM0.57

"Within Expectation And Gradual Pick Up In House Brand"

Nova Wellness Group Berhad (NOVA) 2QFY24 core PATMI came in at RM3.1m (+17.8% QoQ, -62% YoY), which bring the sum to RM5.7m for 1FY24 (-28.2% YoY). The core earnings came in within expectations, despite only amounting to 44% and 33% of ours and consensus estimates of RM13.0m and RM17.7m, respectively as we believe demand should pick up in 2H24.

Analyst(s):
Loui Low
louilow@msec.com.my

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Kenanga
Outperform - TP of RM0.74

"A Soft Patch, Fundamentals Intact"

NOVA’s 1HFY24 results disappointed, we believe, as consumers temporarily held back purchases on weak spending sentiment. However, we are still upbeat on its prospects driven by a gradual production ramp-up at its new plant. We cut our FY24-25F net profit forecasts by 12% and 14%, respectively, reduce our TP by 12% to RM0.74 (from RM0.84) but reiterate our OUTPERFORM call.

Analyst(s):
Raymond Choo Ping Khoon
pkchoo@kenanga.com.my

Quarterly rpt on consolidated results for the financial period ended 31/12/2023

Nova Wellness Group Bhd has missed earnings expectations in the recently concluded quarter as weaker-than-expected sales dragged the pharmaceutical company into a soft patch.

Quarterly rpt on consolidated results for the financial period ended 30/09/2023 (Amended Announcement)

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Malacca Securities
Sell (from Hold) – Target Price RM0.57

“Started FY24 on a weaker note”

Downgrade to SELL, TP: RM0.57. With the downward revision in our earnings forecast, we downgrade NOVA to SELL (from Hold), with a target price of RM0.57 (from RM0.73) pegged to FY24f forecasted earnings. The target price is derived by ascribing a P/E of 14.0x to FY24f EPS of 4.07 sen. Meanwhile, NOVA has a dividend policy of distributing not less than 30.0% of its annual net profit after tax.

Analyst:
Loui Low Ley Yee
louilow@msec.com.my

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Kenanga
Outperform – Target Price RM0.84

“A Soft Patch, Production Ramp-up Ahead”

NOVA’s 1QFY24 results missed our expectation, we believe, as consumers held back purchases after having overstocked right upon the economy reopening. However, we are still upbeat on its prospects driven by the gradual production ramp-up at its new plant. We cut our FY24-25F net profit by 13-12%, respectively, reduce our TP by 13% to RM0.84 (from RM0.96) but reiterate our OUTPERFORM call.

Analyst:
Raymond Choo Ping Khoon
pkchoo@kenanga.com.my

General Meetings: Outcome of Meeting

Quarterly rpt on consolidated results for the financial period ended 30/09/2023

Annual Report & CG Report - 2023

NOVA - Notice of Book Closure

Final Dividend

General Meetings: Notice of Meeting

OTHERSDECLARATION OF A FINAL SINGLE TIER DIVIDEND IN RESPECT OF THE FINANCIAL YEAR ENDED 30 JUNE 2023

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Malacca Securities
Hold – Target Price RM0.72

“Ended FY23 Within Expectations”

Maintain HOLD, TP: RM0.73. Given the forecast is unchanged; we maintain our HOLD recommendation on NOVA, with a target price of RM0.73 pegged to FY24f forecasted earnings. The target price is derived by ascribing a P/E of 14.0x to FY24f EPS of 5.2 sen. Do note that, NOVA has a dividend policy of distributing not less than 30.0% of its annual net profit after tax.

Analyst:
Loui Low Ley Yee
louilow@msec.com.my

Quarterly rpt on consolidated results for the financial period ended 30/06/2023

Change of Company Secretary - LIM LI HEONG

Change of Company Secretary - WONG MEE KIAT

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Malacca Securities
Hold - Target Price RM0.73

"Still a challenging landscape for a recovery"

• In our previous report, we have revised our core net earnings to RM14.8m, RM16.6m, and RM17.8m for FY23f, FY24f, and FY25f respectively. The forecasted earnings take into account the slower-than-expected growth on the contribution from House Brand segment, as well as the higher contribution from OEM segment.
• Given the share price has fell near 20% since the previous report, we upgrade our recommendation on NOVA to HOLD (from SELL), with a target price of RM0.73 pegged to FY24f forecasted earnings (in the previous report). The target price is derived by ascribing a P/E of 14.0x to FY24f EPS of 5.2 sen. Do note that, NOVA has a dividend policy of distributing not less than 30.0% of its annual net profit after tax.
• Risks to our recommendation include the possibility of supply chain disruptions, both domestically and internationally, which may impact the availability of raw materials. Besides, the group is exposed to foreign currency risk relating to USD as a significant portion of its raw material purchases from abroad are denominated in USD. Any depreciation in ringgit against USD will result in increased costs for raw materials and packaging materials, potentially affecting the group’s margin.

Analyst:
Loui Low Ley Yee
louilow@msec.com.my

5 Pharmaceutical Companies in Bursa Malaysia

Malaysia's Pharmaceutical sector has experienced steady growth over the years as population, expected lifespan, and healthcare expenditure has continued to increase.

Malaysia has always been actively promoting itself as a hub for clinical research and development (R&D). The country offers a favorable environment for conducting clinical trials, including a large patient pool, well-developed healthcare infrastructure, and internationally recognized research institutions.

Could the pharmaceutical and healthcare sector make good investments for you? Let’s take a look at 5 prominent pharmaceutical companies listed in Bursa Malaysia. If you had to pick one of them, which would you choose?

$AHEALTH / 7090 (APEX HEALTHCARE BERHAD) $NOVA / 0201 (NOVA WELLNESS GROUP BERHAD) $DPHARMA / 7148 (DUOPHARMA BIOTECH BERHAD) $KOTRA / 0002 (KOTRA INDUSTRIES BERHAD) $YSPSAH / 7178 (Y.S.P.SOUTHEAST ASIA HOLDING BERHAD)

Let us know in the comment section below!

$NOVA / 0201 (NOVA WELLNESS GROUP BERHAD)
Research by Malacca Securities
Sell - Target Price RM0.73

"Declined sales order and increased expenses dragged margin"

• As the reported earnings came in below our expectations, we slashed the earnings forecast by 12.9%, 11.2%, and 15.2% to RM14.8m, RM16.6m, and RM17.8m for FY23f, FY24f, and FY25f respectively. The forecasted earnings take into account the slower than expected growth on the contribution from House Brand segment, as well as the higher contribution from OEM segment.

• We remained our SELL recommendation on NOVA, with a revised target price of RM0.73 (previous TP: RM0.75) as we rolled over to FY24f forecasted earnings. The target price is derived by ascribing a P/E of 14.0x to FY24f EPS of 5.2 sen. Meanwhile, NOVA remained committed to deliver its dividend policy of distributing not less than 30.0% of its annual net profit after tax.

• Risks to our recommendation include the possibility of supply chain disruptions, both domestically and internationally, which may impact the availability of raw materials. Besides, the group is exposed to foreign currency risk relating to USD as a significant portion of its raw material purchases from abroad are denominated in USD. Any depreciation in ringgit against USD will result in increased costs

Analyst:
Ng Hui Yee
hyng@msec.com.my