DBS Vickers has cut China Animal Healthcare’s (EP4.SG) target price to 33 cents from 40 cents, based on 12x FY10 P/E, after lowering earnings forecasts by 18% for FY10, and 7% for FY11 to factor in delay in production of vaccine for hand-foot-mouth disease.
The brokerage notes that the farm animal drugs maker expects to obtain production licence for vaccine by March, and accompanying product code for sales around mid-2010, meaning it won’t be able to take part in government’s February bidding exercise to award production licence and “will only be able to take part in the August 2010 bidding season.”
