1. Strong progress is being made in sterile capacity fulfilment. The company also bought a portfolio of products from Viatris for R5.3 billion which will boost revenue. Future fulfilment of the remaining sterile capacity along with the contracts from GAVI remains to be seen.
2. Key points in the investment thesis are:
   a) Manufacturing continues to lag in the portfolio, primarily due to the heparin unwind, which is expected to improve in the next two years. Although revenue in this segment is anticipated to decline, margins are forecast to increase.
   b) The company faces execution risks as it relies on future contracts to drive growth. Management’s outlook beyond 2025 is optimistic but achievable. Additional contracts will have to be negotiated, building on those already signed with Novo Nordisk, Eli Lilly, Viatris and Amgen ones that have been signed.
   c) Chinese volume-based procurement policy remains uncertain; however, management sees this mitigating post 2025.
   d) Debt has been managed well in the past few years and should continue to see declines after the Viatris and Sandoz acquisitions.
   e) The company is currently trading below its five-year average multiple, making it appear attractive. The double-digit organic growth expected in the commercial segment is more feasible,  following the Chinese VBP issue, provided it does not recur in the future.
 
We have an intrinsic value of R206 per share (upside of 15%) and recommend a buy position.