Earnings Report /
Bangladesh

Square Pharmaceuticals: Earnings growth +14% yoy in FY22, c49% dividend payout

  • Earnings growth +14% yoy in FY22, -8% yoy in Q4 FY22. Actual EPS BDT 20.51 in FY22 fell short of estimate of BDT 21.1

  • Dividend payout has been raised to c49% in FY22 which came as a surprise

  • We reiterate BUY recommendation with TP of BDT 300.0 (ETR 47.8%)

IDLC Securities
24 October 2022
Published byIDLC Securities
  • Earnings growth +14% yoy in FY22, -8% yoy in Q4 FY22. EPS in Q4 FY22 stood at BDT 4.48 against BDT 4.87 in Q4 FY21, implying an 8% de-growth. In FY22, SQURPHARMA reported EPS BDT 20.51 against BDT 17.99 in FY21, implying a 14% growth.

  • Actual EPS of BDT 20.51 in FY22 fell short of our estimate of BDT 21.1. We believe this shortfall occurred may be the result of SQURPHARMA failing to implement the measures required to avail the benefit of having corporate tax lowered to 20.5% from 22.5% as proposed in the upcoming national budget.

  • Dividend payout has been raised to c49% in FY22 which came as a surprise. SQURPHARMA declared BDT 10.0 DPS, a 48.8% payout level in FY22 compared to BDT 6.0, a 33.4% payout level in FY21.

  • We reiterate BUY recommendation with TP of BDT 300.0 (ETR 47.8%). The TP implies 9.0x FY23 P/E, 1.9x FY 23 EV/Sales, 5.5x FY23 EV/EBITDA, and 6.2x FY 23 EV/EBIT.