Now many CSL, investors have the first impression of expensive stock prices. Indeed, the company's current A $172.72 deal price can be said to be at the forefront of the ASX200 as a whole. It is now widely described as a "blood-making giant," and in fact it means slightly more broadly.
CSL Limited is a global biotech company that researches, develops, manufactures and markets products for the treatment and prevention of severe human diseases. Range of products include plasma derivatives, vaccines, serum, cell culture reagents for a variety of medical and genetic research and production applications.
The company's predecessor was the Federal Serum Laboratory, founded in 1916, when it was an Australian government agency specializing in vaccine manufacturing. Plasma separation, one of the company's main businesses, began in 1952, nearly 40 years after the establishment of the laboratory.
In 1994, the government laboratory was officially privatised as CSL and listed on the ASX listing at A $2.30 per share. In 2000, the company bought a Swiss plasma company, ZLB Bioplasma, based in Berne. The size of the company has doubled, and the share price has gone all the way up the road.
Many investors have some concerns about the amount of money they invest in, and fear that the stock price is too high and short of stamina. So does this also exist in CSL?
Concrete analysis
According to Morningstar (Morningstar) 's latest research paper, CSL's continued success in the oligopoly industry has supported its business growth and profitability, and the company has been expanding emerging market share in recent years. Analysts believe CSL still has long-term profitability prospects in its plasma separation business.
Analysts valued CSL's fair value (FV) at A $145 a share, and expect the company to grow 12 percent a year, operating profit margins 18 percent and after-tax net profit gain 19 percent as of June 2020. The main drivers are increased demand in emerging markets and continued success in product innovation.
And for the company's risks, analysts think the product's own unintended nature may be more likely to be the cause of the share price's decline than financial data. Because plasma products are used in severe patients, once harmful side effects or product quality problems arise, it will be a huge risk for the company.
In 1928, for example, a group of diphtheria antitoxins produced by the company involved 12 children, and later referred to as a "Bandundberg's tragedy", which could then be said to have destroyed the company's credibility. In addition, as a biotech company, CSL is also faced with the general industry risk of material patents or intellectual property disputes that may lead to significant business disruption.
Looking at financial data alone, CSL can be said to be impeccable, with low margins in emerging markets in the short term, but with modest leverage, it will see double-digit profit growth over the next few years. Taken together, Morningstar (Morningstar) thinks CSL is suitable for growth investors who understand the risks inherent in biotechnology.
