UMedic Group Bhd (“UMC”), an established medical devices supplier is making its debut on Bursa Ace Market today. The Company has cumulated 20 years of experience in the medical device industry and has presence in over 30 countries currently. According to Protégé Associates Market Researcher, Malaysia’s medical device industry is forecasted to grow at a CAGR of 14% from 2020 to 2025 to RM19.5bn by 2025. Coupled with government’s push on medical tourism and new hospital projects in the pipeline, we forecast net profit to grow by 39% to RM10.85m for FY23. BUY with a TP of RM0.38 premised on 13x PER, 2-year average Bursa Healthcare Index P/E.

UMC offer various branded medical devices and consumables to 454 customers in both domestic and international markets in particular patient monitor, ultrasound machine, ventilator and defibrillator to name a few. The Company has maintained a solid relationship with reputable brand owners namely Philips, GE, Mindray, Merit, CareVision and E-Medtest. Amongst others, Philips has the longest business relationship of 13 years. UMC also develops, manufactures, and markets medical consumables which includes prefilled humidifiers and inhaler spacers. This segment made up 17.1% of total revenue as at FY21 and sold to 30 countries.

UMC achieved a revenue CAGR of 44.1% from FY19 to FY21. Moving forward, besides bringing in more comprehensive medical devices, it also targets to commercialise several new products in the next 2 years under its own brand such as sterile water for inhalation, prefilled nebulisers, digital oxygen flowmeters and humidifier humidity sensors.

Of the total RM31.1m IPO proceeds, UMC will utilise RM3.5m to construct a new factory building which is 3.6x larger than the current production floor space and is expected to be completed within 30 months post listing. The new factory building will have approximately 30k sq ft of production floor space which can house up to 2 production lines, and a 5k sq ft additional storage area for its new products development.

UMC had on 22nd July released its 9MFY22 result with net profit of RM5.86m on the back of RM43.33m revenue. Its 9MFY22’s revenue has surpassed FY21’s revenue by 27%. Currently, the group does not have any formal dividend policy. Post IPO, its gearing ratio reduces significantly from 0.94x as at 31 May 2022 to 0.22x

Source: Rakuten Research - 26 Jul 2022