Hyphen Pharma International - Phillip Securities 2022-06-06: Digital Healthcare Catalyst Emerges


Hyphen Pharma International - Digital Healthcare Catalyst Emerges

  • Raised $6mil for a 10% stake in Hyphens Pharma's digital assets – DocMed Technology.
  • DocMed Technology owns POM (B2B digital hypermart) and WellAway (Singapore’s first and only HSA registered e-pharmacy).
  • We raised FY22e earnings forecast for Hyphens Pharma by 40% to S$9.2mil to incorporate earnings from the acquisition of Novem. Our DCF target price is raised from S$0.345 to S$0.43 due to higher earnings. WACC is increased from 7.3% to 9% from raising our risk-free rate assumption. We upgrade our recommendation for Hyphens Pharma from ACCUMULATE to BUY.
  • Hyphens Pharma's underlying growth strategy is to be a leading portfolio of proprietary skin health products and brands across Asia. Digital healthcare is a new growth and stock catalyst. We have not incorporated the new valuation of DocMed into our target price.
  • We view the transaction as a funding event rather than crystallisation or monetization of Hyphens Pharma's digital assets. The proceeds have the potential to enhance the B2B platform with more doctors, pharmaceutical companies, transactions and new sources of revenue. Such milestones could drive further rounds of financing and higher valuations.


  • Metro Holdings (SGX:M01) will invest S$6mil through new preference shares for a 10% stake in Hyphens Pharma International (SGX:1J5)'s wholly owned subsidiary DocMed Technology (DocMed). DocMed owns Hyphens medical B2B hypermart (POM Medical Hypermart) and a licensed e-pharmacy (WellAway).
    1. POM is a B2B platform that serves doctor's drug and other medical supply needs. For instance, a clinic can order and receive all its drugs and supplies from POM. Revenue in FY21 was S$41mil including offline sales.
    2. WellAway serves the telemedicine industry as a licensed e-pharmacy. After tele consultation with patients, a doctor will be able to prescribe and arrange delivery of the drugs to their patients through WellAway. Doctors do not need to stock up with multiple and expensive drugs and can tap on WellAway’s extensive range. WellAway supports telemedicine fulfilment needs.


  • With the proceeds, DocMed will build up its manpower (technology, operations, marketing) and enhance its B2B platform to serve doctors. The platform can be enhanced with more pharmaceutical offerings, mobile features and a regional footprint across ASEAN. The expected timeline to enhance and expand the B2B platform is two years.
  • Key operational milestones of the platform will include a larger number of doctors joining and purchasing through the platform. Pharmaceutical companies are constantly looking to reach out and engage doctors. DocMed platforms will be an important platform to showcase their drugs to doctors. In turn, DocMed can generate new sources of revenue such as advertising and promotion from pharmaceutical companies.

We upgrade our recommendation to BUY with a higher target price of S$0.43 (previously S$0.345)

Paul Chew Phillip Securities Research | https://www.stocksbnb.com/ 2022-06-06
SGX Stock Analyst Report BUY UPGRADE ACCUMULATE 0.43 UP 0.345