{"id":31816,"date":"2023-08-23T08:08:02","date_gmt":"2023-08-23T00:08:02","guid":{"rendered":"https:\/\/umedic.com.my\/Stagging2025\/?p=31816"},"modified":"2023-09-13T11:33:26","modified_gmt":"2023-09-13T03:33:26","slug":"hlib-research-upbeat-on-umedics-prospects","status":"publish","type":"post","link":"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/","title":{"rendered":"HLIB Research upbeat on UMediC\u2019s prospects"},"content":{"rendered":"<p>[et_pb_section admin_label=&#8221;section&#8221;]<br \/>\n\t\t\t[et_pb_row admin_label=&#8221;row&#8221;]<br \/>\n\t\t\t\t[et_pb_column type=&#8221;4_4&#8243;][et_pb_text admin_label=&#8221;Text&#8221;]<\/p>\n<p class=\"p1\"><strong><span class=\"s1\">by HLIB RESEARCH<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/strong><\/p>\n<p class=\"p2\"><span class=\"s1\"><b>WE RECENTLY&nbsp;<\/b>met with UMediC Group Bhd\u2019s (UMC) management and came away feeling upbeat on its prospects. As we enter into 2H23, we anticipate an increase in the opening of tenders for medical equipment procurement from the public sector in July and August, to ensure timely delivery by December 2023.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">Separately, UMC is also on track to launch two of its new products (prefilled nebuliser and sterile water for inhalation) by end-2023. We keep our forecasts unchanged, maintain \u2018Buy\u2019 with an unchanged TP of RM1.03; our TP is based on 26.5x P\/E multiple tagged to its CY24f EPS of 3.9 sen. With the recent share price retracement offering a significant upside potential of 48%, we advocate investors to take advantage of this weakness and accumulate.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">We met UMC\u2019s management and came away with the following key takeaways:<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\"><b>Anticipating more public sector orders.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/b><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">In 1HFY23, UMC faced a delay in public sector medical equipment orders due to the change in government. Typically, UMC will see stronger medical equipment sales to the public sector in 2H of the calendar year (equivalent to its 1HFY) as the Ministry of Health (MoH) utilises the budget allocated for the year to procure medical equipment. Also, as we enter into 2H23, we anticipate an increase in the opening of tenders for medical equipment procurement in July and August.<\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">This is to ensure timely delivery of the equipment by Dec-23 since the standard tender process takes approximately four months from initiation to completion.<\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">We are upbeat on the distribution segment\u2019s performance in 1HFY24f, driven by the anticipated influx of public sector orders.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-31817 aligncenter\" src=\"https:\/\/umedic.com.my\/Stagging2025\/wp-content\/uploads\/2023\/08\/UMC-Shares-768x437-1-300x171.jpg\" alt=\"\" width=\"465\" height=\"265\"><\/p>\n<p class=\"p2\"><span class=\"s1\"><b>New products to be launched.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/b><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">UMC has set its sights on commercialising two new products by the end 2023, which includes: (i) Prefilled nebuliser; and (ii) sterile water bag for inhalation. We note CE certification audit process for the prefilled nebulisers has been completed, and UMC targets to commercialise the product once certification is received. We expect the prefilled nebuliser to contribute more meaningfully starting from CY24f. Additionally, the sterile water<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">bag for inhalation is presently undergoing product testing and validation, with plans for commercialisation after the launch of prefilled nebuliser.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\"><b>Expansion on track.<\/b><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">In order to cope with the stronger demand for its in-house manufactured products, UMC is expanding its production floor space by constructing a new facility adjacent to its existing office and plant. Expansions are underway, with the construction of the plant targeted to be ready by September 2023. We expect the plant to be ready operationally by end-2023.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\"><b>Forecast. Remain unchanged.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/b><\/span><\/p>\n<p class=\"p2\"><span class=\"s1\">Maintain \u2018Buy\u2019, with unchanged TP of RM1.03. We maintain our \u2018Buy\u2019 rating on UMC, with an unchanged TP of RM1.03. TP is based on a P\/E multiple of 26.5x, against its CY24f EPS of 3.9 sen. Our outlook on UMC\u2019s prospects remains optimistic, driven by the growth potential of its manufacturing segment and its favourable position to capitalise on the government\u2019s commitment to increase public healthcare spending to 5% of GDP (from an estimated 2.9% in 2021). With the recent share price retracement offering a significant upside potential of 48%, we advocate investors to take advantage of this weakness and accumulate.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\n<p><a href=\"https:\/\/themalaysianreserve.com\/2023\/08\/23\/hlib-research-upbeat-on-umedics-prospects\/\">https:\/\/themalaysianreserve.com<\/a><\/p>\n<div class=\"newsTextDataWrapInner\">&nbsp;<\/div>\n<div class=\"newsTextDataWrapInner\">\n<div class=\"newsTextDataWrapInner\">\n<div class=\"newsTextDataWrapInner\">&nbsp;<\/div>\n<\/div>\n<p>&nbsp;<\/p>\n<\/div>\n<p>[\/et_pb_text][\/et_pb_column]<br \/>\n\t\t\t[\/et_pb_row]<br \/>\n\t\t[\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>by HLIB RESEARCH&nbsp; WE RECENTLY&nbsp;met with UMediC Group Bhd\u2019s (UMC) management and came away feeling upbeat on its prospects. As we enter into 2H23, we anticipate an increase in the opening of tenders for medical equipment procurement from the public sector in July and August, to ensure timely delivery by December 2023.&nbsp; Separately, UMC is [&hellip;]<\/p>\n","protected":false},"author":129,"featured_media":28391,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"<p class=\"p1\"><strong><span class=\"s1\">by HLIB RESEARCH<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/strong><\/p>\r\n<p class=\"p2\"><span class=\"s1\"><b>WE RECENTLY&nbsp;<\/b>met with UMediC Group Bhd\u2019s (UMC) management and came away feeling upbeat on its prospects. As we enter into 2H23, we anticipate an increase in the opening of tenders for medical equipment procurement from the public sector in July and August, to ensure timely delivery by December 2023.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">Separately, UMC is also on track to launch two of its new products (prefilled nebuliser and sterile water for inhalation) by end-2023. We keep our forecasts unchanged, maintain \u2018Buy\u2019 with an unchanged TP of RM1.03; our TP is based on 26.5x P\/E multiple tagged to its CY24f EPS of 3.9 sen. With the recent share price retracement offering a significant upside potential of 48%, we advocate investors to take advantage of this weakness and accumulate.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">We met UMC\u2019s management and came away with the following key takeaways:<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\"><b>Anticipating more public sector orders.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/b><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">In 1HFY23, UMC faced a delay in public sector medical equipment orders due to the change in government. Typically, UMC will see stronger medical equipment sales to the public sector in 2H of the calendar year (equivalent to its 1HFY) as the Ministry of Health (MoH) utilises the budget allocated for the year to procure medical equipment. Also, as we enter into 2H23, we anticipate an increase in the opening of tenders for medical equipment procurement in July and August.<\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">This is to ensure timely delivery of the equipment by Dec-23 since the standard tender process takes approximately four months from initiation to completion.<\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">We are upbeat on the distribution segment\u2019s performance in 1HFY24f, driven by the anticipated influx of public sector orders.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\r\n<img class=\" wp-image-31817 aligncenter\" src=\"https:\/\/umedic.com.my\/Stagging2025\/wp-content\/uploads\/2023\/08\/UMC-Shares-768x437-1-300x171.jpg\" alt=\"\" width=\"465\" height=\"265\">\r\n<p class=\"p2\"><span class=\"s1\"><b>New products to be launched.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/b><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">UMC has set its sights on commercialising two new products by the end 2023, which includes: (i) Prefilled nebuliser; and (ii) sterile water bag for inhalation. We note CE certification audit process for the prefilled nebulisers has been completed, and UMC targets to commercialise the product once certification is received. We expect the prefilled nebuliser to contribute more meaningfully starting from CY24f. Additionally, the sterile water<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">bag for inhalation is presently undergoing product testing and validation, with plans for commercialisation after the launch of prefilled nebuliser.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\"><b>Expansion on track.<\/b><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">In order to cope with the stronger demand for its in-house manufactured products, UMC is expanding its production floor space by constructing a new facility adjacent to its existing office and plant. Expansions are underway, with the construction of the plant targeted to be ready by September 2023. We expect the plant to be ready operationally by end-2023.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\"><b>Forecast. Remain unchanged.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/b><\/span><\/p>\r\n<p class=\"p2\"><span class=\"s1\">Maintain \u2018Buy\u2019, with unchanged TP of RM1.03. We maintain our \u2018Buy\u2019 rating on UMC, with an unchanged TP of RM1.03. TP is based on a P\/E multiple of 26.5x, against its CY24f EPS of 3.9 sen. Our outlook on UMC\u2019s prospects remains optimistic, driven by the growth potential of its manufacturing segment and its favourable position to capitalise on the government\u2019s commitment to increase public healthcare spending to 5% of GDP (from an estimated 2.9% in 2021). With the recent share price retracement offering a significant upside potential of 48%, we advocate investors to take advantage of this weakness and accumulate.<span class=\"Apple-converted-space\">&nbsp;<\/span><\/span><\/p>\r\n<a href=\"https:\/\/themalaysianreserve.com\/2023\/08\/23\/hlib-research-upbeat-on-umedics-prospects\/\">https:\/\/themalaysianreserve.com<\/a>\r\n<div class=\"newsTextDataWrapInner\">&nbsp;<\/div>\r\n<div class=\"newsTextDataWrapInner\">\r\n<div class=\"newsTextDataWrapInner\">\r\n<div class=\"newsTextDataWrapInner\">&nbsp;<\/div>\r\n<\/div>\r\n&nbsp;\r\n\r\n<\/div>","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[209,267,250,208,207,170,177,197],"class_list":["post-31816","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-financial","tag-medical","tag-moh","tag-simplywall","tag-themalaysianreserve","tag-umc","tag-umedic","tag-umedicgroupberhad"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>HLIB Research upbeat on UMediC\u2019s prospects - UMediC Group Berhad<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"HLIB Research upbeat on UMediC\u2019s prospects - UMediC Group Berhad\" \/>\n<meta property=\"og:description\" content=\"by HLIB RESEARCH&nbsp; WE RECENTLY&nbsp;met with UMediC Group Bhd\u2019s (UMC) management and came away feeling upbeat on its prospects. As we enter into 2H23, we anticipate an increase in the opening of tenders for medical equipment procurement from the public sector in July and August, to ensure timely delivery by December 2023.&nbsp; Separately, UMC is [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/\" \/>\n<meta property=\"og:site_name\" content=\"UMediC Group Berhad\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-23T00:08:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-09-13T03:33:26+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/umedic.com.my\/Stagging2025\/wp-content\/uploads\/2022\/08\/umc_1.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Regine\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Regine\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/hlib-research-upbeat-on-umedics-prospects\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/hlib-research-upbeat-on-umedics-prospects\\\/\"},\"author\":{\"name\":\"Regine\",\"@id\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/#\\\/schema\\\/person\\\/7cdaed83eabfb66d9f890cd1a894d9a3\"},\"headline\":\"HLIB Research upbeat on UMediC\u2019s prospects\",\"datePublished\":\"2023-08-23T00:08:02+00:00\",\"dateModified\":\"2023-09-13T03:33:26+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/hlib-research-upbeat-on-umedics-prospects\\\/\"},\"wordCount\":585,\"publisher\":{\"@id\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/hlib-research-upbeat-on-umedics-prospects\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/wp-content\\\/uploads\\\/2022\\\/08\\\/umc_1.jpeg\",\"keywords\":[\"financial\",\"medical\",\"MOH\",\"simplywall\",\"themalaysianreserve\",\"umc\",\"UMediC\",\"UMediCGroupBerhad\"],\"articleSection\":[\"News\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/hlib-research-upbeat-on-umedics-prospects\\\/\",\"url\":\"https:\\\/\\\/umedic.com.my\\\/Stagging2025\\\/hlib-research-upbeat-on-umedics-prospects\\\/\",\"name\":\"HLIB Research upbeat on UMediC\u2019s prospects - 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As we enter into 2H23, we anticipate an increase in the opening of tenders for medical equipment procurement from the public sector in July and August, to ensure timely delivery by December 2023.&nbsp; Separately, UMC is [&hellip;]","og_url":"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/","og_site_name":"UMediC Group Berhad","article_published_time":"2023-08-23T00:08:02+00:00","article_modified_time":"2023-09-13T03:33:26+00:00","og_image":[{"width":1280,"height":720,"url":"https:\/\/umedic.com.my\/Stagging2025\/wp-content\/uploads\/2022\/08\/umc_1.jpeg","type":"image\/jpeg"}],"author":"Regine","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Regine","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/#article","isPartOf":{"@id":"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/"},"author":{"name":"Regine","@id":"https:\/\/umedic.com.my\/Stagging2025\/#\/schema\/person\/7cdaed83eabfb66d9f890cd1a894d9a3"},"headline":"HLIB Research upbeat on UMediC\u2019s prospects","datePublished":"2023-08-23T00:08:02+00:00","dateModified":"2023-09-13T03:33:26+00:00","mainEntityOfPage":{"@id":"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/"},"wordCount":585,"publisher":{"@id":"https:\/\/umedic.com.my\/Stagging2025\/#organization"},"image":{"@id":"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/#primaryimage"},"thumbnailUrl":"https:\/\/umedic.com.my\/Stagging2025\/wp-content\/uploads\/2022\/08\/umc_1.jpeg","keywords":["financial","medical","MOH","simplywall","themalaysianreserve","umc","UMediC","UMediCGroupBerhad"],"articleSection":["News"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/","url":"https:\/\/umedic.com.my\/Stagging2025\/hlib-research-upbeat-on-umedics-prospects\/","name":"HLIB Research upbeat on UMediC\u2019s prospects - 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