Company Background. UMediC Group (UMC) is principally involved in the marketing and distribution of various branded medical devices and consumables. The group also develops, manufactures and markets medical consumables such as HydroX series prefilled humidifiers and AirdroX series inhaler spacers. UMC’s products are distributed to more than 400 customers comprising public & private hospitals, healthcare service providers as well as non-medical business entities.

Prospects. (i) Development and commercialisation of new products under its own brand with in-house R&D team - i.e. sterile water for inhalation, prefilled nebulisers, digital oxygen flowmeters and humidifier humidity sensors. (ii) Building a new factory and setting up more marketing & distribution offices to strengthen domestic presence. (iii) Expanding product portfolio through the development of new brand distribution channels.

Financial Performance. In 2QFY23, UMC reported higher revenue of RM12.5mil (+10.6% QoQ) with a PAT of RM2.9mil (+45.4% QoQ). This was mainly due to stronger demand from both public and private hospitals as well as healthcare service providers within the marketing and distribution segment, especially on medical devices and consumables. In addition, there was also an increase in the sale of HydroX series prefilled humidifiers and AirdroX series inhaler spacers.

Technical Analysis. We believe buying interest on UMC is back following its breakout above the RM0.80 psychological mark a few sessions ago. In view of the uncovered upside gap formed on 3 Apr and together with its rising EMAs, the upward momentum is likely to pick up further. A bullish bias may emerge above the RM0.80 level, with a stop-loss set at RM0.70, below the 27 Mar low. Towards the upside, the near-term resistance level is seen at RM0.90, followed by RM1.00.

Source: AmInvest Research - 10 Apr 2023