The stock target price for the integrated healthcare supply chain provider reflects a 24% premium to peer average of 21.4x, compensated by the stronger profit growth.

The stock ended 3.5 sen lower to 82 sen at yesterday’s trading close, giving it a market capitalisation of RM307 million. The stock hit its 52-week high of 89 sen on Dec 12, 2022.

After receiving positive response from potential Spanish and Italian distributors for its prefilled humidifiers, the report said that UMC has expedited its expansion plans and kick started the construction of its new factory in December 2022, ahead of its initial plan of the 1H23.

In an exchange filing on Monday, Umedic reported a net profit of RM4.91 million for the first half ended Jan 31, 2023, on a turnover of RM23.83 million.

“Results accounted for 42% of our full year forecasts, which we deem inline as we are expecting stronger performance 2HFY23.

“In 2QFY23, UMC was affected by a delay in public sector orders due to a change in government, resulting in flattish marketing and distribution revenue QoQ. With the new Budget 2023 now tabled, we are encouraged by the increased certainty and we stay optimistic that UMC could potentially receive more public sector orders in 2H23,” according to the HLIB Research report.

UMediC is principally involved in the marketing and distribution of branded medical and consumable devices, as well as the development, manufacturing and marketing of own brand medical consumables. Its major shareholders are UMediC Capital Sdn Bhd (32.8%) and Datuk Ng Chai Eng (25.9%).

Ng, the group’s co-founder, is its non-independent non-executive chairman. He is also executive director/group CEO of UWC Bhd, an integrated engineering supporting services provider which provides fabrication services involving various processes of working with metal. – TMR