Daily ShareChat: Fisher & Paykel Healthcare

By Jenny Ruth

Fisher & Paykel Healthcare's medium-term prospects are impressive with new products potentially tripling or quadrupling the company's addressable markets, says Guy Hallwright at Forsyth Barr.

However, the stronger New Zealand dollar has prompted him to shade back his 2010 forecast.

He now expects a $73 million net profit in 2010, down from $79.5 million, assuming the New Zealand dollar remains about 65 US cents compared with the company's guidance assumption of 60 cents. That compares with the $62.2 million the company reported for the year ended March.

While FPH's current humidified ventilation products are aimed at between four and five million intensive care patients a year, new machines could expand its market outside intensive care to between

20 million and 25 million people.

"New products are taking FPH's technology out of the intensive care unit and into hospital wards and homes via non-invasive ventilation, oxygen therapy and humidity therapy," he says.

"The company is confident that its expansion into hospital ward and home respiratory therapy will keep revenue growth in respiratory and acute in mid-teen percentages for the next five to 10 years."

With its obstructive sleep apnea products, FPH previously had only relatively basis machines aimed at only about 35% of the market but new products launched in 2008 now address the entire market, Hallwright says.

Recommendation: accumulate.

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