The smallest pharmaceutical company on Bursa Malaysia

We do not lack of pharmaceutical company on Bursa Malaysia. Like CCM, CCM Duopharma Biotech Bhd , Pharmaniaga, Hovid, Apex Healthcare Berhad, etc. However, the smallest base on market capitalisation is Taiwanese controlled YSP Southeast Asia Holding Bhd.

Despite being a main board listed company. Market capitalization of YSP Southeast Asia Holding Bhd even smaller than Mesdaq listed Kotra.

YSP is 42%-owned by Taiwan-listed Yung Shin Pharmaceutical Industries Co Ltd, which has 42 years of experience in the pharmaceutical sector. The Malaysian unit, on the other hand, has about 20 years of history.

YSP is a generic pharmaceutical company, which means its products have patent expiry dates. It produces a wide range of quality products, including tablets, capsules, suppositories, liquid preparation, powders, gels and creams.

The company launches an average of 10 new products every year. It has about 200 products that are registered with the Drug Control Authority.

Last week . it president and group managing director Dr Frank S. Lee announced it plan plans to set up new facilities by year-end to produce sterile products such as eye-drops and injections.

YSP currently operates world-class manufacturing and warehousing facilities. The two new blocks will be at the existing plant in Bangi.

"In the past 20 years we have expanded our factory twice. We’re going to build two more blocks of buildings by end of this year as part of our expansion,” he told The Star recently.

Lee said YSP could only apply for product licence for the sterile range after the facilities were ready, hence it would be two years before it could launch sterile products.

“We’ve already spent two to three years, from idea inception to designing the layout for the new facilities, as there were many changes,” he added. He noted that the technicalities of sterile products were higher than capsules or syrups.

“This will be the first time we’re producing sterile products. Prior to this, we imported them from Taiwan. Now, from Malaysia, we can export them to the rest of South-East Asia,” he added.

Their margins will depend on the technology that will be transferred from YSP’s parent company in Taiwan.

“If our technology is good enough, the profit margins are better than tablets,” Lee said.

“We have to exercise more stringent quality control and validation because sterile products are considered high risk. Injection is different from tablets as it is injected directly into your blood immediately,” he added.

He said YSP was set up to cater to the South-East Asian markets due to the huge population of more than 500 million.

Over 80% of sales are derived from the Malaysian market and the rest from the rest of South-East Asia.

It sees huge potential in regional markets like Vietnam and Indonesia as these economies are growing rapidly with a huge population of some 85 million and 200 million respectively.

Additionally, import barriers in some South-East Asia countries are propelling YSP to consider building manufacturing facilities outside of Malaysia.

“The population in Vietnam, for example, is big enough to put a generic factory there. The government also provides attractive tax incentives for investors,” he said.

Meanwhile, Lee said the company had a “stable” policy when it came to rewarding shareholders.

“It is not in dividend alone, it could also be bonus issue. We are a stable and consistent listing company. We are small but we are solid,” he added.

The company has in the past shown steady earnings growth and sound financial fundamentals.

The balance sheet remains healthy as it has a net cash of RM6.3mil as at end-March.

Currently, CCM Buopharma Biotech Bhd and Kotra also produce sterile product in Malaysia.

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