Fundamentals Are Strong, page-849

I had a look at the annual report today and try to foresee what may be the range of the net profit for next year. Thought that I may be able to look for some value here..

If we believe a lot of the industry's talks about generic drug deflation being in the high single digit. Let's say 10% deflation. This will essentially shaved off $42M of gross profit(straight off the bottom line everything else being equal) for MYX assuming same revenue sales in generics division . The other 2 divisions, i.e. MCS and Specialty Brands have combined $90M Gross Profit for FY17. For MYX to maintain same net profit as per FY17, these 2 divisions need to increase by 50%. Not only that, this year's NPAT included $33M gross profit from once-off items. So, to maintain FY17 NPAT, the other divisions need to almost double their profit (i.e. increase by 42+33 = $75M) to make up for the generic drug price deflation impact.

Not a good position to be in indeed for MYX..