The condom manufacturer’s prospects are expected to be buoyed by rising demand in the global market.
PETALING JAYA: Karex Bhd
’s earnings growth will likely continue to be robust, sustained by strong margins.
The condom manufacturer’s prospects are also expected to be buoyed by rising demand in the global market.
“Karex is poised to benefit significantly from the increase in global condom demand, projected by industry experts at a compounded annual growth rate of 8% to 9% over the coming decade,” said Kenanga Research.
“It is also poised to obtain the CE certification (compliance with European Union safety, health and environmental protection requirements) by June 2024 and US Food and Drug Administration approval in the first half of financial year ending June 30, 2025 (FY25) for its new synthetic condom products, which should start to contribute from 2H25,” it added.
Kenanga Research maintained its “outperform” call on Karex, with a higher target price of RM1.10, up 4% from the previous target of RM1.06.
This followed the brokerage raising its net profit forecasts for Karex by 5% for FY24 and 4% for FY25. The revision was based on a higher gross profit margin forecast of 33%, as compared with 30% previously, due to a favourable product mix.
Karex’s net profit almost tripled to RM18.6mil in the nine months to March 2024 (9M24) from RM6.5mil in 9M23. Its revenue, however, came in lower at RM383.9mil in 9M24, compared with RM397.2mil in 9M23.
