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How Fisher And Paykel Healthcare Is Emerging As A Key Resmed Competitor?

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Fisher and Paykel Healthcare (ASX: FPH) first entered the respiratory care market with the unique respiratory humidifier system, for use in critical care 48 years ago. Now they offer a broad range of products and systems for use in treating respiratory conditions and obstructive sleep apnea (OSA). Fisher has obtained over 200 US patents and over 900 patients across the rest of the world.

Fisher&Paykel Healthcare - Report
Fisher & Paykel SleepStyle Auto Product (Credit: NSW CPAP)

The company’s products

The products are divided into two main categories, hospital and home care. The company earns most of the revenue from the hospital products segment which is around 60% of total sales. The homecare unit contributes the other 39% of total revenue. OSA is a condition causing temporary closure of airways during sleep, thus impairing sleep quality. It’s estimated that over 50 million people are affected in developed countries. The homecare products include the mask, called Vitera, to aid for OSA. This solution has been launched in NZ, Australia, Europe, and Canada, and has been strongly received by patients in all key markets. Vitera will be launched in the US and other markets upon receipt of regulatory clearances. The release of Vitera into the US$3bn global addressable market will be a game-changer for Fisher and Paykel, boosting both revenue and growth. The potential of this product is one of several factors that makes Fisher and Paykel Healthcare shares worth considering.

FY2019 Financial Results

Fisher and Paykel Healthcare is an NZ$9.8bn company, that has increased operating revenue by an average of 9% over the last few years to NZ$1.07bn. In addition to its growing, high quality, revenue streams, the company’s net profit after tax has also increased by 10%. This brings the total net profit to NZ$209.2m.


This year’s success has made CEO Lewis Gradon optimistic about the outlook for FY20. This statement encapsulates his bullish outlook:

"Achieving $1 billion in revenue is a milestone for our company, however, we are not sitting still. We still continue to build on our strengths and continuously improve and expand our portfolio of valued solutions for healthcare providers and patients."

Fisher and Paykel Healthcare is expecting operating revenue and NPAT to be approximate NZ$1.15bn and NZ$250m respectively for FY20. Knowing that Vitera is yet to launch in the US and other markets, the market seems positive about management’s ability to deliver on guidance. Nevertheless, with a valuation that bakes in juicy growth numbers, an ability to execute successfully will be paramount to realising a bullish outlook over the next couple of years.




This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

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ASR has no position in any of the stocks mentioned.

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