is the honeymoon over?, page-3

I have just finished listening to the webcast of the half year results. While I am aware that these always have a positive spin on them, here are some points.

1. eps is growing faster than NPAT due to share buybacks.

2. specialty products are now 15% of revenue, and is growing by 15% YOY. This is where the growth will come from and, in part, justifies the p/e.

2a. Market size of speciality products is $2B per annum and CSL has 33% market share. The market is growing and CSL has the opportunity to grow share in a growing market.

3. China is growing by 20% YOY. While only a small part of sales currently, CSL is selling product in there and understands the supply chain well enough to maintain supply to customers. Also CSL's competitors are hitting some regulatory hurdles that is slowing down competition in that market.

4. CSL is "sticking to it's knitting". It is concentrating on it's core skills and moving on opportunities that others can better commercialise. CSL362 license agreement with Janssen Biotech means that Janssen has the expertise to commercialise this product in the oncology space which CSL does not. Many companies go backwards when they move away from their core business model. CSL does not appear to be doing this.

5. CSL knows that growth comes from new products, hence their R & D spend.

I am happy to hold for the time being. I think it is a bit early to call the honeymoon over. Shares often take a breather for a while before starting on the next leg up.

HT1