ISRAEL 
HIGH-TECH & INVESTMENT REPORT

from the January 2003 issue


AGIS: IHTIR #1 Choice for 2003

Agis Industries (1983) Ltd. is Israel's second largest pharmaceutical company. It is strategically positioning itself to move from being a local diversified pharmaceutical and consumer products enterprise into a specialized global pharmaceutical company.

The company has focused for several years on an effort to consolidate and expand its activities overseas, through the sale of pharmaceuticals in the US by an American subsidiary, and the sale of APIs to the global generic pharmaceuticals industry, mainly in the US. Agis (AGIS:TASE) since 1992, is a public company, listed on the Tel-Aviv Stock Exchange. The company, while well known to the Israeli public, is nearly unknown to international investors.

Company Description
The Agis Group's principal activities are manufacturing, marketing and importing of pharmaceuticals; developing and manufacturing of active pharmaceuticals ingredients (API); importing and marketing of medical equipment, paramedical products, and medical diagnostic products; manufacturing and marketing of drugs, cosmetics, toiletries and consumer goods; and manufacturing of bar soap, cleaning products, detergents, powdered laundry detergents, toiletries and baby products. It operates four manufacturing facilities in Israel and one in the USA. It sells its products mainly in Israel and the USA. Drug sales accounted for 66% of 2001 revenues; consumer products 28% and medical applications 6%.

Agis employs . 1,900 workers, of which . 600 are in the U.S.

Sales Analysis
During the year ended December of 2001, sales at Agis Industries (1983) Limited were US$251.8 million, This was the fifth consecutive year of sales increases at Agis since 1996, sales have increased by 71%.

Sales Breakdown in 2001 by Market Segment
Pharmaceuticals Sold in Israel 30%
Generic Pharmaceuticals in U.S.A 25%
Active Pharmaceutical Ingredients (API) 12%
Diagnostics and Medical Equipment 6%
Consumer Products 27%

Recent Share Price Development
The share price was up 37.9% to $10.22 over the past 13 weeks. . In the 12 months ending 9/30/02, earnings totaled $0.43 per share. The share have recently traded at a Price / Earnings ratio of 24. These 12 month earnings are substantially greater than the earnings per share achieved during the calendar year ending last December, when the company reported earnings of 0.17 per share. Earnings per share fell 61.4% in 2001 from 2000.

Key Ratios
The shares are currently trading at 1.12 times sales and at 1.41 times book value.

Summary
Agis' strategy is clearly aimed at increasing its overseas sales. It has shown its ability to sell the American market and here is where we anticipate major growth in 2003.

Its shares have recently been upgraded to the Tel-Aviv 100 providing greater investor visibility and liquidity. We believe that Agis shares provide an interesting vehicle for investors to participate, at a reasonable valuation, in Israel's growing generic industry. The shares are yielding 4.2% having recently distributed $0.43 a share dividend. All of these factors add to Agis' investment attractiveness.



Reprinted from the Israel High-Tech & Investment Report January 2003

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