Daily ShareChat: Fisher & Paykel Healthcare

The Fisher & Paykel Healthcare story is one of a short-term currency headwind and long-term strong sales growth, says First NZ Capital analyst Sarndra Urlich.

"We have assumed that Fisher & Paykel will deliver constant currency growth in the mid-teens for 2011. If the currency remains elevated, this will once again suppress the underlying story," Urlich says.

She has revised her long-term thinking about the company's obstructive sleep apnea (OSA) products and now believes it can keep up with competitor Resmed after 2011 with its ICON platform of continuous positive airway pressure (CPAP) devices to treat OSA.

Over the last couple of years, Fisher & Paykel had fallen behind with its flow generator sales, primarily due to holes in its product lines which have now been resolved, Urlich says.

"No one knows whether the ICON will be a 'killer app' or whether it is simply the next iteration of what will keep Fisher & Paykel up to speed with market growth rates (ie catch-up technology," she says.

The consistent narrative from key players is the US market is growing 15% a year by volume and 12% by revenue with global OSA revenues about US$2.2 billion (NZ$3.08 billion).

While Fisher & Paykel's growth matched the market during the years ended March 2008 and 2009, Urlich is expecting market share gains during 2010.

BROKER CALL: underperform.

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