Improved Near-Term Outlook for CSL, but Long-Term Industry Threats Not Priced In

CSL is one of three tier one plasma therapy companies who benefit from an oligopoly in this highly consolidated market. All the players are vertically integrated as plasma sourcing is the most significant constraint in production. The plasma sourcing market is currently in short supply, however CSL are well-positioned having invested significantly in plasma collection centres, expanding faster than peers to now and own over 30% of collection centres globally. Lead times run between two and five years to expand plasma collection and seven years to add fractionation capacity. The consolidated market, long lead times and high costs of entry dissuade new market entrants.