Otsuka Pakistan (KASE:OTSU) - Share price, News & Analysis

Q: What is the Fair Price of OTSU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

OTSU (PKR175.63) is trading below our estimate of [[fair value]] (PKR280.22)

OTSU fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	6/6
Financial Health	5/6
Dividends	0/6

OTSU Stock Overview

Otsuka Pakistan Limited manufactures, markets, and distributes intravenous infusions in Pakistan and Afghanistan.

Rewards

Trading at 37.3% below our estimate of its fair value

Earnings grew by 69.1% over the past year

Risk Analysis

Highly volatile share price over the past 3 months

Does not have a meaningful market cap (PKR2B)

Has a high level of debt

Otsuka Pakistan Competitors

Ferozsons Laboratories

KASE:FEROZ

PK₨10.5b

Citi Pharma

KASE:CPHL

PK₨7.7b

sanofi-aventis Pakistan

KASE:SAPL

PK₨14.9b

AGP

KASE:AGP

PK₨23.5b

Price History & Performance

Summary of all time highs, changes and price drops for Otsuka Pakistan
Historical stock prices
Current Share Price	PK₨175.63
52 Week High	PK₨330.00
52 Week Low	PK₨172.00
Beta	0.15
1 Month Change	-12.40%
3 Month Change	-23.64%
1 Year Change	-46.62%
3 Year Change	-13.37%
5 Year Change	-23.26%
Change since IPO	949.44%

Shareholder Returns

	OTSU	PK Pharmaceuticals	PK Market
7D	-13.0%	1.4%	2.3%
1Y	-46.6%	-22.9%	-13.4%

Return vs Industry: OTSU underperformed the PK Pharmaceuticals industry which returned -22.8% over the past year.

Return vs Market: OTSU underperformed the PK Market which returned -13.7% over the past year.

Price Volatility

Is OTSU's price volatile compared to industry and market?
OTSU volatility
OTSU Average Weekly Movement	10.8%
Pharmaceuticals Industry Average Movement	3.6%
Market Average Movement	5.4%
10% most volatile stocks in PK Market	8.0%
10% least volatile stocks in PK Market	3.2%

Stable Share Price: OTSU is more volatile than 90% of PK stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: OTSU's weekly volatility (11%) has been stable over the past year, but is still higher than 75% of PK stocks.

About the Company

Founded	Employees	CEO	Website
1988	375	Muhammad Sattar	https://www.otsuka.pk

Otsuka Pakistan Limited manufactures, markets, and distributes intravenous infusions in Pakistan and Afghanistan. The company’s products include electrolyte and standard solutions, ampoules, OTSUZOL, and ciprofloxacin and OTSUMOL infusion products; medical devices, such as cardiac stents, urea breath test systems, plasline, and knee joints solutions; clinical nutrition products; and therapeutic drugs. It also engages in the trading of pharmaceutical products, nutritional foods, and medical equipment.

Otsuka Pakistan Fundamentals Summary

How do Otsuka Pakistan's earnings and revenue compare to its market cap?
OTSU fundamental statistics
Market Cap	PK₨2.13b
Earnings (TTM)	PK₨397.08m
Revenue (TTM)	PK₨2.89b

5.4x

P/E Ratio

0.7x

P/S Ratio

Is OTSU overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
OTSU income statement (TTM)
Revenue	PK₨2.89b
Cost of Revenue	PK₨1.90b
Gross Profit	PK₨992.99m
Other Expenses	PK₨595.91m
Earnings	PK₨397.08m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	32.82
Gross Margin	34.31%
Net Profit Margin	13.72%
Debt/Equity Ratio	63.6%

How did OTSU perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

5%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is OTSU undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for OTSU?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for OTSU. This is calculated by dividing OTSU's market cap by their current preferred multiple.
What is OTSU's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	PK₨2.13b

OTSU key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.9x
Enterprise Value/EBITDA	3.9x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does OTSU's PE Ratio compare to its peers?

OTSU PE Ratio vs Peers

The above table shows the PE ratio for OTSU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	13.1x
FEROZ Ferozsons Laboratories	8.3x	n/a	PK₨10.5b
CPHL Citi Pharma	11.8x	n/a	PK₨7.7b
SAPL sanofi-aventis Pakistan	17x	n/a	PK₨14.9b
AGP AGP	15.3x	n/a	PK₨23.5b
OTSU Otsuka Pakistan	5.4x	n/a	PK₨2.1b

Price-To-Earnings vs Peers: OTSU is good value based on its Price-To-Earnings Ratio (5.4x) compared to the peer average (13.1x).

Price to Earnings Ratio vs Industry

How does OTSU's PE Ratio compare vs other companies in the Asian Pharmaceuticals Industry?

Price-To-Earnings vs Industry: OTSU is good value based on its Price-To-Earnings Ratio (5.4x) compared to the PK Pharmaceuticals industry average (10.2x)

Price to Earnings Ratio vs Fair Ratio

What is OTSU's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

OTSU PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	5.4x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate OTSU's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of OTSU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: OTSU (PKR175.63) is trading below our estimate of fair value (PKR280.22)

Significantly Below Fair Value: OTSU is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Otsuka Pakistan forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

16.9%

Forecasted Pharmaceuticals & Biotech industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Otsuka Pakistan has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

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Examine whether Otsuka Pakistan is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.

Past Performance

How has Otsuka Pakistan performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

41.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: OTSU has high quality earnings.

Growing Profit Margin: OTSU's current net profit margins (13.7%) are higher than last year (9.8%).

Past Earnings Growth Analysis

Earnings Trend: OTSU's earnings have grown significantly by 41% per year over the past 5 years.

Accelerating Growth: OTSU's earnings growth over the past year (69.1%) exceeds its 5-year average (41% per year).

Earnings vs Industry: OTSU earnings growth over the past year (69.1%) exceeded the Pharmaceuticals industry 33.4%.

Return on Equity

High ROE: OTSU's Return on Equity (57.8%) is considered outstanding.

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Financial Health

How is Otsuka Pakistan's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: OTSU's short term assets (PKR1.3B) exceed its short term liabilities (PKR987.7M).

Long Term Liabilities: OTSU has no long term liabilities.

Debt to Equity History and Analysis

Debt Level: OTSU's net debt to equity ratio (62.1%) is considered high.

Reducing Debt: OTSU's debt to equity ratio has reduced from 1030.3% to 63.6% over the past 5 years.

Debt Coverage: OTSU's debt is well covered by operating cash flow (88.1%).

Interest Coverage: OTSU's interest payments on its debt are well covered by EBIT (96.9x coverage).

Balance Sheet

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Dividend

What is Otsuka Pakistan current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.85%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: OTSU's dividend (0.85%) isn’t notable compared to the bottom 25% of dividend payers in the PK market (3.71%).

High Dividend: OTSU's dividend (0.85%) is low compared to the top 25% of dividend payers in the PK market (10.29%).

Stability and Growth of Payments

Stable Dividend: OTSU is not paying a notable dividend for the PK market, therefore no need to check if payments are stable.

Growing Dividend: OTSU is not paying a notable dividend for the PK market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: OTSU is not paying a notable dividend for the PK market.

Cash Payout to Shareholders

Cash Flow Coverage: OTSU is not paying a notable dividend for the PK market.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure

CEO

Muhammad Sattar

1.5yrs

Tenure

Mr. Muhammad Hanif Sattar has been the Chief Executive Officer of Otsuka Pakistan Ltd. since February 27, 2021. Mr. Sattar served as Chief Financial Officer and Company Secretary at Otsuka Pakistan Ltd.un...

Leadership Team

Experienced Management: OTSU's management team is considered experienced (4 years average tenure).

Board Members

Experienced Board: OTSU's board of directors are considered experienced (3.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2022/03/31
Annual Earnings	2021/06/30