{"id":33194,"date":"2024-04-18T15:00:29","date_gmt":"2024-04-18T07:00:29","guid":{"rendered":"https:\/\/umedic.com.my\/Stagging2025\/?p=33194"},"modified":"2024-04-19T08:46:20","modified_gmt":"2024-04-19T00:46:20","slug":"capacity-expansion-diversification-to-boost-umedic","status":"publish","type":"post","link":"https:\/\/umedic.com.my\/Stagging2025\/capacity-expansion-diversification-to-boost-umedic\/","title":{"rendered":"Capacity expansion, diversification to boost UMediC"},"content":{"rendered":"
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PETALING JAYA: Robust capacity expansion plans and medical equipment tenders are set to drive UMediC Group Bhd<\/a><\/a>\u2019s (UMC) earnings growth in the near term.<\/p>\n

Hong Leong Investment Bank Research (HLIB Research) said the medical device maker has relocated its warehouse to a newly built plant, making room for manufacturing-capacity expansion at its existing site, following the completion of the group\u2019s new facility.<\/p>\n

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The new facility is awaiting regulatory approvals.<\/p>\n

\u201cProduction capacity is expected to reach 420,000 bottles per month by April 2024 (from 300,000 units per month currently), which is then expected to increase to 600,000 bottles per month by December 2024,\u201d the research house said in a report yesterday.<\/p>\n

HLIB Research said the necessary equipment to produce up to 600,000 bottles has been successfully installed at UMC\u2019s production facility.<\/p>\n

Currently, UMC is conducting thorough test runs to ensure adherence to quality standards, before a gradual ramping up of production.<\/p>\n

\u201cConsidering the robust demand for its HydroX prefilled humidifier, we acknowledge the potential for further capacity expansion beyond the completion of the ongoing expansion,\u201d the research firm said.<\/p>\n

Apart from that, UMC\u2019s medical equipment tenders for new hospitals and expansion projects continued to remain strong, alongside the emergence of tenders for routine medical equipment replacement.<\/p>\n

HLIB Research noted that some of the tenders are taking on a leasing model as opposed to upfront lump-sum payments upon equipment delivery.<\/p>\n

A leasing model entails staggered payment for equipment, either with a monthly or quarterly payment.<\/p>\n

\u201cThis signals the government\u2019s initial venture into the leasing model and if successful, we anticipate a potential increase in similar tenders in the future.<\/p>\n

\u201cThis transition could prove advantageous for UMC, as it would necessitate the participation of suppliers with solid financial standing due to the lengthened payment period, potentially side-lining smaller competitors,\u201d the research house said.<\/p>\n

UMC has also recently diversified into healthcare services with the establishment of the UMC Care Centre.<\/p>\n

This is a brand new venture, complementing its core business of medical-equipment distribution.<\/p>\n

\u201cThe care centre will occupy a four-storey shoplot spanning 7,427 sq ft in Batu Kawan, Penang. It will offer a range of services including aged care, short-term care for post-surgery patients and long-term care for individuals with illnesses,\u201d HLIB Research said.<\/p>\n

The research house added that approval for the facility\u2019s floor plan has been obtained from local authorities and renovation work is currently in progress, with completion expected by the end of May. Operations are slated to commence in July 2024.<\/p>\n

UMC also recently secured approval to transfer to the Main Market of Bursa Malaysia. The exercise is expected to be completed by the first half of 2024.<\/p>\n

\u201cWhile this transition does not entail any fundamental changes within the company, we regard it as a positive development as it would make UMC more investable, improving participation from institutional investors,\u201d the research house said.<\/p>\n

HLIB Research maintained a \u201cbuy\u201d call on UMC with a target price of 91 sen. It also advocates investors eyeing long-term growth to accumulate the company\u2019s shares on price weakness.<\/p>\n

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\u2013 The Star  \u2013<\/p>\n<\/div>\n<\/div>\n

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www.thestar.com.my<\/a><\/div>\n<\/div>\n

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  PETALING JAYA: Robust capacity expansion plans and medical equipment tenders are set to drive UMediC Group Bhd\u2019s (UMC) earnings growth in the near term. Hong Leong Investment Bank Research (HLIB Research) said the medical device maker has relocated its warehouse to a newly built plant, making room for manufacturing-capacity expansion at its existing site, following […]<\/p>\n","protected":false},"author":129,"featured_media":31692,"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