{"id":31595,"date":"2023-06-09T17:01:44","date_gmt":"2023-06-09T09:01:44","guid":{"rendered":"https:\/\/umedic.com.my\/Stagging2025\/?p=31595"},"modified":"2023-07-28T17:15:21","modified_gmt":"2023-07-28T09:15:21","slug":"foray-into-lab-related-business-to-drive-umedic-growth-prospects","status":"publish","type":"post","link":"https:\/\/umedic.com.my\/Stagging2025\/foray-into-lab-related-business-to-drive-umedic-growth-prospects\/","title":{"rendered":"Foray into lab-related business to drive UMediC growth prospects"},"content":{"rendered":"
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PETALING JAYA: UMediC Group Bhd\u2019s foray into the lab-related business and sustained demand for medical devices and consumables are expected to drive its growth prospects in the upcoming quarters.<\/p>\n

Hong Leong Investment Bank (HLIB) Research said the integrated healthcare supply chain group\u2019s core net profit for the third quarter of financial year 2023 (3Q23) of RM1.7mil was below both its and consensus expectations, accounting for 58% and 63% full year forecasts respectively.<\/p>\n

\u201cThe disappointment was due to lower contributions from both its marketing and distribution, as well as manufacturing segments.<\/p>\n

The change in government (post the general election) had delayed some public sector orders in the first half of 2023 (1H23) and we had anticipated the orders to return in 2H23.<\/p>\n

\u201cUnfortunately, these expectations were not met as initially projected,\u201d said the research house in a report yesterday.<\/p>\n

HLIB Research said the weaker results were also due to customers\u2019 request to delay order delivery.<\/p>\n

UMediC\u2019s registered a drop of 23.4% quarter-on-quarter in its revenue for 3Q23. This was a result of weaker showings in the group\u2019s marketing and distribution (down by 24.6%) and manufacturing (down by 21.2%) segments during the quarter.<\/p>\n<\/div>\n

HLIB Research said seasonality was the attributable reason for the decline in UMediC\u2019s marketing and distribution revenue for the quarter, as stronger medical device sales is generally seen in 2Q.<\/p>\n

\u201cMeanwhile, manufacturing revenue was affected by maintenance and upgrading works, as well as customers delaying order delivery.<\/p>\n

\u201cIn line with the weaker turnover, core net profit registered a decline of 40.3% quarter-on-quarter,\u201d the research house said.<\/p>\n

UMediC\u2019s revenue grew 48.1% year-on-year underpinned by strong revenue growth in both its marketing and distribution (up by 52.3%) and manufacturing (up by 41.2%) segments.<\/p>\n

\u201cThe revenue growth was underpinned by stronger demand for medical devices and consumables, as well as increase in manufacturing capacity. That said, core net profit grew at a smaller magnitude of 12.4% as growing costs weighed down on profitability,\u201d HLIB Research said.<\/p>\n

HLIB Research noted UMediC\u2019s foray into the lab-related business having completed the acquisition of Patho Solution\u2019s (Patho) with a 70% stake, for a price of RM600,000. UMediC also subscribed an additional 700,000 shares for RM700,000 in Patho.<\/p>\n

\u201cPatho is presently involved in the distribution of lab equipment and consumables.<\/p>\n

\u201cWhile Patho is earnings accretive, we believe it would take time for operations to ramp up, hence we do not expect a significant earnings contribution just yet,\u201d the research house said.<\/p>\n

HLIB Research maintained a \u201cbuy\u201d call on UMediC with a target price of RM1.03.<\/p>\n<\/div>\n

https:\/\/www.thestar.com.my\/business<\/a><\/p>\n

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PETALING JAYA: UMediC Group Bhd\u2019s foray into the lab-related business and sustained demand for medical devices and consumables are expected to drive its growth prospects in the upcoming quarters. Hong Leong Investment Bank (HLIB) Research said the integrated healthcare supply chain group\u2019s core net profit for the third quarter of financial year 2023 (3Q23) of […]<\/p>\n","protected":false},"author":129,"featured_media":28859,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"

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UMediC Group Berhad (KLSE:UMC<\/a>) Second Quarter 2023 Results<\/h2>\r\n

Key Financial Results<\/h3>\r\n