Omesti Bhd (Omesti) is primarily involved in providing network connectivity and bandwidth services, and project management services in relation to telecommunications via its 51.8% subsidiary Microlink Bhd. On 27 July 2021, the company acquired a 70% stake in Bemed Tempua Sdn. Bhd. (Bemed Tempua) for RM700,000 and is now a Covid-19 vaccine provider for the private sector. This new source of income will greatly enhance Omesti’s earnings for FY22 and beyond. BUY with a TP of RM0.71 based on sum of parts valuation, implying a forward PER of 16.5x for FY22.

Omesti jumped into the Covid-19 vaccine bandwagon and launched the Omesti Healthcare Vaccin8 Programme (“Healthcare Programme”) providing vaccination services to companies for their employees as part of the nationwide drive to achieve herd immunity status.

Authorised by the Jawatankuasa Khas Jaminan Akses Bekalan Vaksin COVID-19 (JKJAV) and the Ministry of Health Malaysia (MOH), the 1m doses of Sinovac vaccines acquired from Pharmaniaga enables Omesti to execute its Healthcare Programme. In addition, Omesti is also providing Oral Fluid Antigen Test Kit (approved by the MOH) to existing clients and via online marketing. Demand for its vaccines and test kits remains resilient as the company has already secured substantial orders from companies across different sectors.

Omesti’s balance sheet is healthy with net cash position of RM27.7m as at FY21.

Our BUY recommendation is premised on: (i) strong sales achieved since the launch of Healthcare Programme; (ii) orders secured from the private sectors providing recurring earnings; and (iii) healthy profit margins going forward.

Source: Rakuten Research - 19 Aug 2021