Company result

CSL has had difficulties in sourcing plasma, which is the key raw material input they fractionate to produce life saving therapeutic goods.

This is a function of stay at home orders, which makes life difficult when you need people to come to clinics for plasmapheresis, and also a function of economics, in that generous fiscal support packages has reduced the proportion of doners that do so for financial reasons

Seasonality is also much more pronounced post the acquisition of the vaccines business Seqirus.


However, that aside, the overall CSL franchise is still going strong. As always, some nuance is required. For example the Haemophilia portfolio appears to be stagnating, at the top line, but this masks the shift from plasma derived to recombinants. Similarly growth in subcutaneous IVIG has been very strong, which can be masked at the overall Immunoglobulins product level (and in aggregate, is caught up in the plasma sourcing issue).

The result itself was a modest beat to expectations, and the guidance for FY22 is very low. It’s not clear to us that CSL has a “strong likelihood”, of beating those low growth forecasts, because the issue isn’t one of being coy about demand, it’s one of being clear about supply. However, what we think is clear, is that the long runway to growth remains intact, and that CSL continues to provide to core exposure to Quality, as a style premia / risk premia, in our direct equity portfolios.

Also, CSL’s offshore dollar earnings provide us with a good hedge against AUD weakness, which is currently a net portfolio benefit as COVID bites on the Australian economy.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

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